An Unofficial Translation
of the Act
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
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