The Ministry of Economic Development and Trade announces the permission for individuals to register single shareholder companies under the enacted Company Act, effective January 7, 2024.
The Company Act, greenlit by Parliament on December 5, 2023, represents a significant departure from previous business registration norms, which mandated a minimum of two shareholders. Pending the President’s ratification and Gazette publication, the act encompasses registration procedures for various entities, including private, public, government, local authorities, and foreign investment companies.
A key highlight of the Company Act is the permission for a company to be formed with a single shareholder, and private companies can now accommodate up to 100 shareholders. The legislation introduces mandatory annual general meetings for companies with multiple shareholders.
For foreign companies, the act mandates compliance with the Foreign Investment Act, eliminating the prior requirement for a local agent. Embracing modern measures, the act includes provisions for electronic meetings, and every non-private company must appoint a secretary to ensure legal compliance.
The restructuring of the fee system is another notable aspect, with the annual fee being replaced by a one-time MVR 2,500 fee at the time of company registration.