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The Companies Act
of the Maldives 1996
Introduction and name
1. (a) This is the law governing the
formation, registration and management
of companies in the Republic of Maldives.
(b) This law shall be cited as the "The
Companies Act of the Republic of Maldives"
Formation of companies
2. Companies in the Maldives shall be
formed and managed in the manner prescribed
in this Act.
Formation of companies
3. (a) Any two or more persons may as
prescribed in this, Act having the liability
of its members limited form a private
company. A private company is a company
whose memorandum and articles of association
states that it is a private company, and
that shares may only be transferred in
accordance with its articles of association
and the number of member of the company
is limited to fifty and the sale of shares
to the public is prohibited by the articles
of association.
(b) Any ten or more persons, may in accordance
with this Act having the liability of
its members limited form a public company.
A public company is a company whose memorandum
and articles of association states that
it is a public company and can sell shares
to the public in accordance with this
Act.
Memorandum and articles
of association
4. Every company shall have a memorandum
and articles of association which shall
contain the names of the persons forming
the company and shall be signed by them
in the presence of two witnesses who shall
also sign the same.
Contents of memorandum
5. The memorandum of every company must
state:
(a) the name of the company.
(b) whether the company is a private company
or a public company.
(c) the registered office of the company.
(d) the objects of the company.
(e) the liability of the members.
(f) the authorised capital of the company
and the manner in which it is to be procured.
Contents of the articles
6.(a) The articles of association of
every company must prescribe, in accordance
with this Act regulations for the company.
(b) The articles of association of every
private company must state: (1) it cannot
sell shares to the public. (2) shares
of the company may only be transferred
to a party approved by the Board of Directors
in accordance with the articles. (3) the
number of shareholders of the company
is limited to fifty.
Registration
7. (a) The persons forming a company
shall submit to the registrar of companies
the memorandum and articles of association
together with the registration fee and
the annual fee specified in the schedule
of this act. The company shall be registered
if the contents of the memorandum and
articles of association do not contravene
the Islamic principles or this Act or
any other law.
(b) Every company registered under this
Act shall pay the annual fee specified
in the schedule of this Act. If a company
fails to pay the annual fee specified
in the schedule the registrar of companies
reserves the right to take the necessary
steps stipulated in this Act to dissolve
the company.
(c) A private company shall be registered
if the company's memorandum and articles
of association states that it is a private
company and if the authorised capital
of the company stipulated in the memorandum
and articles of the company is not less
than MRF 2,000/- and the articles of association
states that the company's shares may only
be transferred from a member to another
person in accordance with the articles
of association and the memorandum and
articles of association limits the membership
of the company to fifty and prohibits
the sale of shares to the public.
(d) A public company shall be registered
if the persons forming the company agree
to buy shares of at least MRF 1,000,000/-
in value and pay the said money to the
company and submit to the registrar of
companies evidence of the payment.
(e) If a company is registered having
paid the registration fee as prescribed
in subsection (a) of this section subsequently
increases the authorised capital then
the company shall pay the fee for the
increase in the proportion stipulated
in the schedule.
Certificate of incorporation
8. The registrar of companies shall upon
registration of the company in accordance
with Section 7 of this Act issue to the
company a certificate that the company
is incorporated.
9. The registrar of companies reserves
the right to call upon changes to memorandum
and articles of association of the company
delivered to him, to comply with the Act.
Company names
10. (a) The name given to a company shall
be a name acceptable to the registrar
of companies. If the registrar of companies
feels that the proposed name is unacceptable
he will not register it.
(b) The name of every company shall end
or bear as a part of the name the word
"Limited" or its abbreviation
"Ltd".
(c) The name of every private company
must end with the word "Private"
or its abbreviation "Pvt".
(d) The name of every public company
must end with the word "Public"
or its abbreviation "Plc".
(e) Every company shall have its name
displayed in Dhivehi outside its place
of business.
(f) The name of the company and its registration
number shall appear on all documents specified
by the regulations promulgated under this
Act.
Change of name
11. A company may by special resolution
change its name.
Calling for change of
name
12. Where a company has been registered
by a name which in the opinion of the
registrar of companies is unacceptable
the registrar of companies reserves the
right to direct the company to change
its name. If the registrar of companies
so directs the company must change its
name within 21 days from the date of direction.
Registration of a new
name
13. The registrar of companies shall,
upon being informed by a company that
it has changed its name in accordance
with either section 11 or 12 of this Act,
and if he finds the new name acceptable,
issue a certificate in the new name, and
the change of name has effect from the
altered certificate is issued.
Effect of change of
name
14. A change of name by a company under
section 11 or 12 of the Act does not effect
any rights or obligations of the company
or render defective any legal proceedings
by or against it.
Effect of registration
15. (a) The company upon registration
shall become a legal entity distinct from
its members by the name contained in the
memorandum of association capable of forthwith
exercising all the powers and functions
specified in its memorandum and articles
of association and of suing and being
sued and having a perpetual succession
and a common seal with the power to hold
movable property and immovable property
as is permitted by law.
(b) The memorandum and articles of association
of a company, when registered, bind the
company and its members to the same extent
as if they respectively had been signed
by each member, and contained covenants
on the part of each member to observe
all the provisions of the memorandum and
of the articles.
Register of members
16. (a) Every company shall keep a register
of its members and enter in it the following
particulars: the name and addresses of
the members the number of shares held
by each member, and the amount paid on
the shares of each member
(b) Every person whose name appear in
the registry stated in sub-section (a)
of this section shall be a member of the
company.
List of members
17. Every company shall deliver to the
registrar of companies a list of its members
within thirty days of its annual general
meeting.
Liability of the members
18. (a) A statement in the memorandum
of a company stating that the liability
of its members is limited shall mean that
the liability of its members is limited
for all purposes to the amount, if any,
unpaid on the shares respectively held
by them and shall when the memorandum
and articles of association are registered,
for all legal purposes have effect accordingly.
(b) In the event a limited liability
company is wound up every member of the
company shall be liable to contribute
to the assets of the company only to the
extent of the amount unpaid, if any, on
the nominal value of his shares.
Alterations of memorandum
and articles of association
19. Subject to the provisions of this
Act, and in accordance with the articles
of association, a company may with prior
approval of the registrar of companies
alter its memorandum and articles of association
by a special resolution at a general meeting.
Private company becoming
public
20. (a) A private company may be re-registered
as a public company if a special resolution
that it should be so re-registered is
passed, and an application for re-registration
is delivered to the registrar of companies
and the company is re-registered as a
public company in accordance with this
Act.
(b) The application for re-registration
of a private company to a public company
delivered to the registrar of companies
shall contain the following:
(1) the special resolution passed by
the private company to become public.
(2) the special resolution passed by the
company to make such alterations in the
memorandum and articles as are necessary
to bring them into conformity with the
requirement of this Act.
(3) the memorandum and articles of association
of the company after bringing them into
conformity with the memorandum and articles
of association of a public company as
prescribed in this Act.
(4) the prospectus. (c) If an application
to re-register a private company to a
public company is delivered to the registrar
of companies in accordance with subsection
(a) and (b) of this section the company
shall be re-registered and the certificate
of incorporation shall be issued if the
requirements specified in this Act for
the formation of a public company are
fulfilled.
Public company becoming private
21. (a) A public company may be re-registered
as a private company if a special resolution
that it should be so re-registered is
passed, and an application for re-registration
is delivered to the registrar of companies
and the company is re-registered as a
private company in accordance with this
Act.
(b) The application of re-registration
of a public company to a private company
delivered of registrar of companies shall
contain the following:
(1) the special resolution passed by
the public company to become private.
(2) the special resolution passed by the
company to make such alterations to the
memorandum and the articles as are necessary
to bring them in conformity with requirements
of this Act.
(3) the memorandum and articles of association
of the company after bringing them into
conformity with the memorandum and articles
of association of a private company as
prescribed in this Act.
(c) If an application to re-register a
private company as a public company is
delivered to registrar of companies in
accordance with sub-sections (a) and (b)
of this section, the company shall be
re-registered and the certificate shall
be issued if the requirements specified
in this Act for the formation and registration
of a private company are fulfilled.
Effect of change in company status
22. If a company changes its status from
a private to a public company or from
a public to a private company in accordance
with section 20 and 21 of this Act, it
shall in no way affect the rights, or
obligations of the company nor shall it
affect a proposed contract or subsisting
contracts or to any legal proceedings
by or against the company.
Sale of shares to the
public
23. (a) Companies other than those registered
under this Act as public companies shall
not sell shares to the public.
(b) Sale of shares to the public shall
mean that the company's share may be purchases
by any person of the public, and that
the shares of the company are freely transferable
from one person to another without the
approval of the company.
Prospectus
24. A public company can only sell shares
to the public after issuing a prospectus
in accordance with this Act and regulations
promulgated under this Act with prior
approval of the registrar of companies.
Permission to sell shares
to the public
25. Permission to sell shares to the
public will be given to a public company
to an amount equivalent to the amount
paid up by its members for the time being
for the shares of the company.
Form of the prospectus
26. The prospectus stated in section
24 of this Act shall be in the form stipulated
in section 27 of this Act and in accordance
with the regulations promulgated under
this Act.
Contents of the prospectus
27. The prospectus stated in section
24 of this Act shall contain the following:
(a) details of the assets, liabilities
and other obligations of the company.
(b) financial status of the company.
(c) information required by investors
to invest in the company and any other
information generally expected by investors
to be included in the prospectus.
(d) contain such information as may be
prescribed by regulations made under this
Act.
False information in prospectus
28. (a) Persons responsible for preparing
a prospectus in which false information
is intentionally included shall be guilty
of an offence and each such person shall
be liable to a fine not exceeding MRf
100,000/-
(b) The Board of Directors of the Company
at the time the prospectus is delivered
to the registrar of companies for approval
shall be deemed persons responsible for
preparing the prospectus.
Shares Allotment of
shares
29. If a company makes an allotment of
its shares it shall within thirty days
of such allotment deliver to the registrar
of companies a list of names and addresses
of the allotees, the number, the nature
and the value of the share allotted.
Value of shares
30. (a) The share capital of the company
shall be divided into shares of equal
value. The share capital of the company
shall be divided or when the company makes
an allotment of shares, it may create
shares of various classes with different
rights attached, as may be prescribed
by regulations made under this Act.
(b) If the share capital of a company
is divided or if a company allots shares
of different classes with variation of
rights attached to them the company shall
as may be prescribed by regulations made
under the Act make provisions in its article
of association for variation of the rights
attached for different classes of shares
and for revocation of such rights.
No share at a discount
31. No shares in a company shall be issued
at less than its nominal value.
Shares jointly owned
32. Two or more persons may jointly own
a share, provided only one of them shall
represent the share for the purpose of
the company.
Financial assistance
for the purchase of company shares
33. No company shall give financial assistance
for the purchase or subscription of its
shares.
Share certificate
34. (a) Every company shall issue to
its members a share certificate. The share
certificate is evidence of the shareholder's
title to the share specified in the certificate.
(b) Every share certificate shall specify
the class and the value of the share.
Considerations
35. A company may issue shares for considerations
other than money, even in such instance,
they shall not be issued at less than
their nominal value.
Transfer of shares
36. The shares of any member in a company
shall be movable properly and is transferable
in the case of private companies with
the approval of the Board of the Directors
in accordance with the articles of association.
Shares in a public company shall be transferred
in accordance with this Act or as may
be prescribed by the regulations made
under this Act.
Transfer of shares and
registration
37. If a share in a company is transferred
from one person to another, the share
transaction shall be registered in the
company. A transfer shall take place when
a proper instrument of transfer is delivered
to the company.
Transmission of shares
38. If a shareholder deceases, the company
may in accordance with the articles of
association register the shares held by
the deceased member in the name of the
person or persons whom the court declares
as being entitled to hold the shares.
Failure to answer a
call up for share payment
39. If a shareholder fails to pay for
the shares he has subsrcibed after a call
for payment has been made, the company
may in accordance with its articles of
association forfeit the shares.
Increase of capital
40. A company may at a general meeting
pass a resolution to increase its share
capital.
Reduction of share capital
41. (a) A company may with prior written
approval of the registrar of companies,
by a special resolution at a general meeting
reduce its shares capital if it is in
excess of the company's requirements provided
it does not affect the rights of another.
(b) The application delivered to the
registrar of companies as stated in sub-section
(a) shall specify the nature and the extent
of the share capital to be reduced.
(c) The registrar of the companies shall,
upon receiving the application as stated
in sub-section (a) and (b), make a public
announcement of the proposed reduction
of the company's share capital.
(d) Permission for the reduction of the
share capital shall be granted by the
registrar if no object is lodged with
the registrar by a member or any other
person within one month of the announcement
stated in sub-section (c).
(e) If a creditor or a member of the
company or any other party lodges an objection
with the registrar of companies giving
reasons for the objection, within one
month from the date of the announcement,
stated in section (c) and if the registrar
finds the objection acceptable then sub-section
(d) does not prevent the registrar from
granting the permission for the reduction
of the capital provided that payment has
been made to the claimant as instructed
by the registrar and evidence of payment
shown to the registrar or the company
deposits into an account designated and
for a specified time by the registrar
an amount of money equivalent to the amount
to be reduced from the capital.
Seal
42. (a) Every company shall have a registered
seal.
(b) Any contract which is required by
lay to be in writing, if made by a company,
shall be in writing under its seal.
Commencement of business
43. (a) A private company may, upon its
registration as stated in section 7 of
this Act, commence its business as prescribed
by the regulations made under this Act.
(b) A public company may commence business
only after getting registered as a public
company under this Act, and upon issuing
a prospectus as stated in section 24 of
this Act and the company allots shares
to the public to the minimum level stipulated
in the prospectus and receives payment
for the allotted shares and the Directors
of the company pays and submit to the
registrar evidence of the payment for
their shares and the registrar of companies
gives permission to commence the business.
Management of the Company
Board of directors
44. Every company shall be managed by
a Board of Directors.
45. (a) Every private company shall have
at least two directors and every public
company shall have at least five directors
in the Board.
(b) At least one member of the Board
of Directors shall be a resident of the
Republic of Maldives.
(c) A director of a company shall be
at least sixteen years of age.
(d) The directors of the company shall
be shareholders of the company. If the
shareholders are legal entities then the
directors shall be persons nominated by
the respective entity.
(e) The first directors of the company
shall be written down in the article of
association of the company.
Company secretary
46. (a) Every company shall have a company
secretary. It is the duty of the Board
of Directors to see that the person appointed
as the company secretary is competent
to discharge the functions of the secretary
of the company.
(b) Every company shall, when submitting
its application for registration, submit
to the registrar of companies the name
of person who shall be the company secretary
and an acceptance letter from the person.
(c) The duties of the company secretary
shall be those prescribed by the regulations
made under this Act.
Loans and guarantees
to directors
47. (a) Public companies shall not grant
a loan or issue a guarantee for a loan
to a member of its Board of Directors
nor to a company with their shares.
(b) Sub-section (a) does not apply to
companies carrying out banking functions
with the permission of Maldives Monetary
Authority.
Appointment and removal
of directors
48. Members to the Board of Directors
shall be elected, appointed and removed
in accordance with the articles of association
of the company.
Removal of directors
for their actions
49. A company may by special resolution
at a general meeting remove a director
if the director has acted or shows an
intent to act to the detriment of the
company.
Meetings of the board
50. The Board of Directors of the company
shall meet at least twice a year.
Chairman of the board
51. Chairman of the board shall chair
the meetings of the Board of Directors.
If for any reason the Chairman is unable
to attend the meeting then the directors
present shall elect one of their member
to be the chairman.
Quorum
52. A majority of the Board of Directors
shall constitute the quorum at a board
meeting. This section does not prevent
the company from increasing the quorum
by its articles of association and acting
upon it.
Minutes
53. Every company shall maintain the
minutes of the meeting of Board of Directors.
The minutes shall be signed by the Chairman
of the meeting and the company secretary.
Annual general meeting
54. Every company shall in each year
hold a general meeting as its annual general
meeting. Not more than fifteen months
shall elapse between the date of one annual
general meeting of a company and that
of the next.
55. The following shall be carried out
at the annual general meeting:
(a) Presentation and passing of the audited
balance sheet, profit and loss account
and the Directors report of the company.
(b) Election and appointment of directors,
if any.
(c) Declaration of dividends.
Extraordinary general
meeting
56. (a) A company may hold an extraordinary
general meeting if its directors feel
necessary to hold such a meeting.
(b) The Board of Directors shall hold
an extraordinary general meeting if shareholders
representing not less than 10% of the
capital of the company request for such
a meeting.
(c) Requisition made by the shareholders
for the meeting stated in sub-section
(b) shall be in writing and must state
the objects of the meeting.
Notice for annual general
meeting
57. (a) Every private company shall give
to the shareholders at least 14 days notice
of its general meeting. The notice shall
specify the objects, venue, date, agenda
and time of the meeting. The Directors
annual report, annual accounts and auditor's
report shall be sent to every member along
with the notice.
(b) Public companies shall give 14 days
notice of its annual general meeting by
a public announcement. The said announcement
shall state the venue, date and time of
the meeting. The Directors annual report,
annual accounts and auditors report shall
be published together with the announcement.
(c) Private companies shall give fourteen
days notice of any extraordinary general
meeting to its members the notice shall
state the objects, agenda, venue, date
and time of the meeting.
(d) Public companies shall give to its
members fourteen days notice of any extraordinary
general meeting by a public announcement.
The announcement shall state the venue,
date and time of the meeting. Quorum for
general meeting 58. A majority of the
members of the company shall constitute
a quorum for a general meeting. This section
does not prevent a company from increasing
the quorum required by its articles of
association.
Right to attend general
meetings
59. Every member or his proxy shall have
the right to attend every general meeting
of the company. The proxy shall be appointed
in writing. The proxy shall have the right
to express and vote at the meeting. Chairman
of the general meeting 60. The Chairman
of the Board of Directors shall chair
every general meeting. If the Chairman
is unable to attend the meeting then the
members present shall elect one of their
number to the chair.
Minutes
61. Every company shall maintain minutes
of its general meetings.
Voting
62. (a) Voting at all meetings of a company
shall be by a show of hands unless a poll
is demanded by members representing not
less than 10% of the shares of the company.
(b) on a vote taken by a show of hands
every member present shall have one vote.
(c) on a poll each shareholder shall
have one vote for each share he holds.
(d) a decision taken by a poll cannot
be changed.
(e) this section does not prevent, the
articles of association of the company
from stipulating in accordance with regulations
made under this Act, the manner in which
the holders of preference shares as stated
in section 30 of this Act votes in t he
General Meetings for the declaration of
dividends or for the winding up resolution.
Accounts and Audit Duty
to keep accounting records
63. (a) Every company shall keep clear
and sufficient accounting records of the
following:
(1) day to day sums of money received
and expanded by the company.
(2) a record of the assets, liabilities
and obligations of the company.
(b) If a company fails to comply with
any provisions of this section every director
who is charged by the company to fulfil
the requirements of this section shall
be guilty of an offence.
(c) The person guilty of an offence under
sub-section (b) shall be liable to a fine
of between MRf. 10,000.00 and MRf. 500,000.00
or to six months to two years house arrest
or imprisonment or to banishment.
Where and the period
for keeping records
64. (a) A company's accounting records
shall be kept at its registered office,
and shall at all times be available for
inspection by the members of the company.
(b) Every private company shall preserve
its accounting records for three years
from the date on which they are made,
and
(c) Every public company shall preserve
its accounting records for six years from
the date on which they are made.
Passing of accounts
65. Every company shall prepare the accounts
stated in section 66 of this Act and pass
the accounts by the Board of Directors
in accordance with the article of association.
The accounts shall be signed by the Board
of Directors.
Annual accounts and
annual report
66. (a) The Board of Directors shall,
in order to present to the annual general
meeting cause the preparation of accounts
showing the income and expenses, profit
and loss, the annual balance sheet and
an annual report and shall submit them
to the annual general meeting.
(b) The annual report prepared by the
Board of Directors stated in sub-section
(a) shall include the following:
(1) a review of the business and other
activities of the company during the past
year.
(2) the amount which the Board of Directors
recommend should be paid as dividend and
the amount they propose to set aside as
reserves.
(3) names of the directors of the company
and details of the members of the company
in the past year.
(4) information on the main activities
carried out by the company in the past
year.
(c) In the case of any failure to comply
with sub-section (a) and (b) of this section
as to the preparation of the Directors
annual report and the annual accounts
every director of the company who is charged
to cause the preparation of them and have
failed to take necessary steps for there
preparation is guilty of an offence and
is liable to a fine between MRf. 5,000/-
and MRf. 100,000/-
Contents of the accounts
67. Every company shall, in the accounts
stated in subsection (a) of section 66,
specify the share capital of the company;
the paid up capital, the assets, liabilities
and information generally expected to
be disclosed in relation to the assets
and liabilities of the company and the
manner in which all immovable properties
of the company are valued.
Laying of the accounts
and reports before the general meeting
68. (a) Every company shall lay before
the company in general meeting the annual
account, and the directions report stated
in section 66 after passing them by the
Board of Directors with the signatures
of two directors of the company.
(b) Every company shall when laying before
the company in general meeting the annual
account and director's report shall also
lay the auditor's report stated in section
71 of the Act.
Accounts and reports
to be delivered to the registrar
69. (a) The directors of the company
shall deliver to the registrar of companies
the annual accounts and the directors
report stated in section 66 of this Act
and the auditors report stated in section
71 of the Act within fifteen days of the
annual general meeting.
(b) In the case of failure to comply
with sub-section (a) of this section every
member of the Board of Directors of the
company for the past year who has been
charged to act in accordance with section
69 (a) and have failed to do so or take
positive actions in that regard shall
be guilty of an offence and liable to
a fine between MRf. 5,000/- to MRf. 100,000/-
Appointment of auditors
70. (a) Every company shall appoint an
auditor or auditors to audit the company.
Every public company and companies whose
share capital is more than MRf. 1,000,000.00
shall appoint chartered accountants or
certified Public Accountants approved
by the Auditor General to act as their
Auditors.
(b) Auditors of the company shall be
appointed and removed at the annual general
meeting of the company.
(c) The remuneration of the auditors
appointed under sub-section (a) of this
section shall be fixed by the company
in members annual general meeting.
Auditor's report
71. (a) The auditors of the company shall
prepare the auditors' report to be laid
before the annual general meeting of the
company along with the accounts prepared
in accordance with section 66 of this
Act.
(b) The auditor's report stated in sub-section
(a) shall include the following:
(1) whether or not the auditors received
the required information and details to
discharge their responsibilities.
(2) whether or not the accounts prepared
as stated in section 66 of this Act are
true and show an accurate status of the
company and whether or not the accounts
reflect the real financial status of the
company as seen from the books of the
company.
Power of the registrar of companies to
convene a general meeting of the company
72. (a) If for any reason a general meeting
of the company be duly convened or cannot
proceed in accordance with the company's
articles or as prescribed in this Act
then every member of the company reserves
the right to apply to the registrar of
companies requesting him to convene a
general meeting of the company and if
the company fails to convene a meeting
as instructed by the registrar, the registrar
reserves the right to convene a general
meeting of the company. The meeting convened
by the registrar shall be chaired by the
registrar of companies or any other person
appointed by the registrar.
(b) A meeting convened by the registrar
of companies as provided in sub-section
(a) of this section may proceed even if
one shareholder or a proxy attends it.
Members applying for
a court order
73. (a) A member of the company or members
of the company may apply for a court order
if a right of a member or members in adversely
affected or if there is a prejudice to
the harmony of the members or the affairs
of the company is managed in a manner
detrimental to right of a member or members
or part of the members.
(b) If in the opinion of the court a
right of the applicant under sub-section
(a) of this section is adversely affected
the court has the power to issue any of
the following order or orders:
(1) an order directing the affairs of
the company affecting the right complained.
(2) an order restraining or requiring
the rectification of the affairs of the
company affecting the right complained.
(3) an order requiring alteration of the
memorandum and articles of association
of the company.
Abuse of corporate entity
status
74. Notwithstanding the distinct legal
entity status acquired by a company as
stated in section 15 of this Act the court
deserves the right to issue and order
holding liable personally the directors
of the company who have used the corporate
entity status to commit the following
acts in the name of the company.
(a) Using the corporate entity status
to carry out an illegal activity.
(b) Using the corporate entity status
to commit fraud.
(c) Using the corporate entity status
to defraud or mislead the creditors or
past or present clients of the company.
(d) In addition to those specified in
sub-section (a), (b) and (c) by the operation
of the law.
Winding up of a company
75. A company registered under this Act
may only be dissolved in the following
two ways:
(a) the company decided to dissolve itself.
(b) by order of the court. Voluntary
dissolution 76. (a) A company may be wound
up as stated in section 75 (a) of this
Act if the board by resolution, confirmed
by special resolution in a general meeting,
decides to do so. (b) The general meeting
of the company passing the winding up
resolution shall appoint a person or persons
to undertake the winding up process as
well as fix their remuneration and make
available to the person pre persons the
balance sheet of the company, details
of the assets, liabilities, other obligations
of the company, the names and addresses
of the creditors and if a creditor's credit
is secured by a mortgage, details of any
such mortgage.
(c) The person or persons appointed to
wind up the company shall within seven
days of their appointment inform the registrar
of their appointment and give notice of
it by a public announcement and shall
commence the winding up process in accordance
with this Act and regulations made under
this Act.
(d) If the person or persons appointed
to wind up the process is unable to discharge
their duties due to permanent disability
or by death or resignation by the company
shall convene general meeting of the company
to appoint a replacement.
Cessation of business
on commencement of the winding up
77. The company shall from the passing
of the resolution to wind up the company
in accordance with subsection (a) of section
76 of this Act cease to carry on its business,
except so far as may be required for its
beneficial winding up.
General meeting to dissolve
the company
78. (a) A soon as the company affairs
are fully wound up in accordance with
this Act and regulations made under this
Act the person or persons appointed as
stated in sub-section (c) of section 76
shall convene a general meeting of the
company.
(b) Notice given to the members to attend
the general meeting stated in sub-section
(a) shall be by a public announcement.
(c) The person or persons appointed by
the company to wind it shall make up an
account of the winding up showing how
it has been conducted and the manner in
which the properties, liabilities and
other obligations of the company have
been disposed and shall present the account
to the general meeting stated in sub-section
(a) of this section.
Removal of the person
appointed to wind up the company
79. If a creditor or a member of the
company lodges a complaint with the registrar
of companies regarding the actions of
the person or persons appointed to liquidate
the company and if after a due investigation
the registrar forms the opinion that the
actions of the person or persons appointed
to wind up the company are unacceptable
the registrar of companies reserves the
right to remove the person or persons
appointed by the company and direct the
company to apply to the court for the
winding up.
Winding up by the court
80. (a) The court may order the winding
up of the company as stated in section
75
(b) under following circumstances:
(1) The company at a general meeting
resolves by special resolution to wind
it ip by the court.
(2) The company does not commence business
within a year from its incorporation.
(3) The company is unable to pay it debts.
(4) it is proved that the company has
repeatedly failed to perform an obligation
required by law.
(5) It is proved to the court that the
business carried out by a company is illegal.
(6) The directors of the company are conducting
the business of the company for their
personal benefit rather than for the benefit
of the company's members.
(7) The court is of the opinion that is
just and equitable that the company should
be wound up. (b) For the purpose of sub-section
(a) 3 above the court shall deem that
the company is unable to pay its debts
if a creditor to whom the company is indebted
in a sum exceeding MRf. 5,000.00 than
due has served on the company a written
demand requiring the company to pay the
sum so due and to the company has for
15 days thereafter neglected to pay the
sum or a court has issued a judgement
debt against the company and the company
has failed comply in whole or in part
to the judgement.
Persons who may petition
for a winding-up order
81. (a) A member of the company, or a
creditor of the company or the registrar
of companies may petition to the court
for the winding up of the company as stated
in section 80 of this Act.
(b) If a petition is made to the court
by a person stated in sub-section (a)
of this section the court shall examine
the petition and if in the opinion of
the court the company should be wound
up it shall appoint a person or persons
to wound up the company and shall order
the company to provide to the person or
persons so appointed with the balance
sheet, details of the assets, liabilities,
other obligations of the company, names
and addresses of the creditors of the
company and if a creditor's credit is
secured by a mortgage over the assets
of the company details of any such mortgage.
Notification of the
person appointed to the registrar of companies
82. The court shall notify the registrar
of companies details of the person or
persons appointed to wind up the company
within seven days of the appointment.
Notice of the winding
up of the company
83. Upon commencement of the winding
up process by the person or persons appointed
by the court as stated in section 81 (c)
of this Act notice of it shall be given
by a public announcement.
Result of the commencement
of the winding up process
84. Business of the company except those
required for the beneficial winding up
of the company shall be ceased from the
appointment of a person or persons by
the court as stated in section 81 (c)
of the Act for the winding up of the company.
Duties of the person
or persons appointed to wind up the company
85. The person or persons appointed to
wound up the company shall, upon their
appointment as stated in section 76 (b)
and 81 (b) of this Act carry out the following:
(a) prepare an account of the assets
and liabilities of the company and take
into their custody the assets of the company
and recover all debts due to the company.
(b) represent or appoint a legal counsel
to represent the company in legal proceeding
by or against the company.
(c) settlement all debts of the company
from the reserves of the company, revenue
being received by the company and from
the proceeds of the sale of assets of
the company.
(d) distribution of the assets and reserves
of the company among the members in proportion
to their respective share holdings after
the settlement of all debts of the company.
(e) to do all other acts this Act or
regulations made under this Act may prescribe.
Qualifications of the
person or persons appointed to wind up
the company
86. The person or persons appointed as
stated in sections 76 (b) and 81 (b) shall
have the following qualifications.
(a) shall be competent to carry out the
winding up process.
(b) shall not be indebted to the company
nor shall the company be indebted to them.
(c) shall not be an employee or employees
of the company.
(d) shall not be an employee of a member
if the company nor shall be a business
partner to a member of the company.
(e) shall not be an undischarged bankrupt.
Transfer of shares after
the commencement winding up process
87. Any transfer of shares, not being
a transfer made with the sanction of the
person or persons appointed to wind up
the company after the commencement of
the winding up, is void.
All moneys to be secured
in a bank account
88. Upon commencement of the winding
up process by the persons appointed to
carry out the winding up as stated in
section 76 (b) and 81 (b), the moneys
received by the company shall be deposited
in a bank account in the Republic of Maldives
designated for that purpose.
Maintenance of accounts
89. The person or persons appointed to
wind up the company shall maintain accounts
of all the income and expenditure of the
company in an acceptable manner.
Decision of the court
90. If the person or persons carrying
out the winding up is faces with a matter
they could not settle, the matter shall
be referred to the court for a decision.
Order of settling company's
debts
91. The assets of the company in a winding
up process under section 76 and 80 of
this Act shall be applied, after deducing
the expenses incurred for the winding
up and the remuneration of the person
or persons appointed to wind up the company,
in the following order.
(a) money due to the government or to
government bodies.
(b) wages due to employees of the company
except directors for three months form
the date the court issued the winding
up order or the company passed the special
resolution to wind up the company.
(c) the balance, if any, after settling
the payments stated in (a) and (b) if
not sufficient to discharge all debts
of the company shall be applied in satisfaction
of the company's liabilities pari passu.
The final account
92. (a) A soon as the company's affairs
are fully wound up, the person or persons
appointed to wind up the company under
section 76 of the Act shall make up an
account of the winding up to lay before
general meeting of the company stated
in section 78 and shall give details of
the winding up to the members of the company.
(b) As soon as the company's affairs
are fully wound up, the person or persons
appointed to wind up the company under
section 81 of this Act shall make up an
account of the winding and shall deliver
to the account to the court and shall
give details of the winding up to the
court.
End of winding up
93. (a) The registrar of companies shall
dissolve the company within 14 days of
the application to dissolve the company
submitted by the person or persons appointed
to wind up the company under section 76
of this Act who has completed the requirements
stated in section 92 (a) in accordance
with that provision.
(b) The registrar of companies shall
dissolve the company within 14 days from
the date the court directs the registrar
to dissolve the company, after receiving
an account of the winding up process from
the person or persons appointed under
section 81 of this Act who has completed
the winding up process as stated in section
92 (b) of this Act.
Companies registered
outside Republic of Maldives
94. (a) Companies registered outside
the Republic of Maldives shall before
commencing any business obtain the necessary
permits under the laws and regulations
of the Republic of Maldives and shall
submit to the registrar the following
documents to register the company in the
Ministry of Trade, Industries and Labour
as a foreign company doing business in
the Maldives.
(1) Copy of the permit issued to the
company to conduct business in the Republic
of Maldives.
(2) Copy of the memorandum and articles
of association of the company. If the
company is formed by a charted or a law
a copy of the documents.
(3) Names and addresses of the Board of
Directors.
(4) names and addresses of a person or
persons who shall represent the company
in the event of any legal proceedings
against the company.
(5) Registered address of the company.
(6) Address of the place of business in
the Maldives.
(b) If there is a change to any of the
information or documents submitted to
the registrar in accordance with sub-section
(a) of this section the change shall be
notified and the documents submitted to
the registrar within 15 days of the change.
(c) Every company conducting business
in the Maldives under sub-section (a)
of this section shall deliver to the registrar
a copy of its annual accounts, any such
accounts shall be the account prepared
to be submitted to the annual general
meeting of the company.
Government companies
95. Companies whose shares are held solely
by the government or a body of the government
shall be formed by a law or by a decree
of the President of the Republic.
96. The law or decree stated in section
95 of this Act shall contain the name
of the company, its objects, the authorised
capital and articles of association of
the company.
97. The liability of the shareholders
of the company formed as stated in section
95 of this Act is limited to the amount,
if any, unpaid on the shares held by the
Government as stipulated in the decree
or law forming the company or to any other
extent stipulated in the decree or law
forming the company.
Legal personality
98. A soon as the law stated in section
95 of this Act forming the company is
passed or the decree come into force the
company formed by any such law or decree
shall be a legal entity distinct from
its members by the name stated in the
law or decree capable of forthwith exercising
all the powers and functions specified
in the law or decree and being and being
sued and having perpetual succession and
a common seal with power to hold movable
and immovable property.
Transfer of shares of
a government company
99. A company formed as stated in section
95 of this Act may transfer or sell its
shares to a party other than the government
only after registering the company under
this Act and the assets, liabilities and
other obligations of the company is transferred
by a law or presidential decree to the
company registered under this Act.
Other matters Companies
existing at the time this Act came into
force
100. (a) Companies registered in the
Ministry of Trade, Industries and Labour
at the time this Act come into force will
be deemed to be registered under this
Act.
(b) If an amendment if any is required
to the memorandum or articles of association
of companies registered in the Ministry
of Trade, Industries and Labour prior
to the passing of this Act, such amendments
shall be made and registered with the
registrar of companies within six months
from the date this Act come into force.
Regulations
101. Ministry of Trade, Industries and
Labour shall make and implement regulations
under this Act.
Definitions
102. In this Act unless the context requires
otherwise.
"Special resolution" means
a resolution passed by at least three
fourth majority of those eligible to vote
in a company's general meeting.
"Nominal Value" means the value
of a share of the company when the authorised
share capital is divided by the number
of shares of the company and the value
of the share specified in the share certificate.
"Registrar of companies" means
the authority to which the functions of
the Registrar have been assigned by the
President.
"Person or Persons" shall include
juridical persons.
"Public announcement" shall
mean publishing in a daily newspaper in
the Maldives and broadcasting over the
radio and television as may be prescribed
by regulations under this Act.
103. This Act shall come into force on
1st July 1997.
104. Law No: 23/72 the Law Governing
the Formation of Public Companies and
Law No: 25/82 the Law Governing the Registration
of Companies and Agencies, shall be repealed
from the date this Act comes into force.
SCHEDULE
1. The company registration fee stated
in section 7 of this Act shall be paid
in the following manner:
(a) If the authorised capital of the
company is MRf. 10,000/- or less than
MRf. 10,000/- the fee shall be MRf. 1,000/-.
(b) If the authorised capital of the
company is more than MRf. 10,000/- then
in addition to the MRf. 1,000/- stated
in subsection (a) above a fee calculated
on the following basis on the authorised
capital of the company shall be paid.
1. For every MRf. 4,000/- or part thereof
of the authorised capital b
tween MRf. 10,000/- and MRf. 500,000/-
a fee of MRf. 10/- shall be paid.
2. For every MRf. 4,000/- or part thereof
of the authorised capital between MRf.
500,000/- and MRf. 4,000,000/- a fee of
MRf. 4/- shall be paid.
3. For every MRf. 4,000/- or part thereof
of the authorised capital between MRf.
4,000,000/- and MRf. 8,000,000/- a fee
of MRf. 2/- shall be paid.
4. For every MRf. 4,000/- or part thereof
of the authorised capital above MRf. 8,000,000/-
a fee of MRf. 1/- shall be paid.
2. The annual company fee state in section
7 of the Act shall be paid in the following
manner:
(a) Public companies shall pay MRf. 10,000/-
before the end of March every year.
(b) Private companies shall pay MRf.
2,000/- before the end of March every
year.
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