Good news for aspiring business owners! Starting January 7, 2024, individuals can now register single shareholder companies, thanks to the recently approved Company Act announced by the Ministry of Economic Development and Trade.
This new act, given the green light by Parliament on December 5, 2023, marks a significant shift from previous business registration rules that required a minimum of two shareholders. While awaiting the President’s approval and Gazette publication, the act covers registration procedures for various types of companies, including private, public, government, local authorities, and foreign investment companies.
One notable change with the Company Act is the allowance for a company to be established with just one shareholder. Additionally, private companies can now have up to 100 shareholders. The law also introduces mandatory annual general meetings for companies with multiple shareholders.
For foreign companies, compliance with the Foreign Investment Act is now a requirement, eliminating the previous need for a local agent. Keeping up with the times, the act includes provisions for electronic meetings, and every non-private company must appoint a secretary to ensure legal compliance.
Another significant change is the restructuring of the fee system. Instead of an annual fee, there is now a one-time MVR 2,500 fee at the time of company registration. These updates aim to simplify the process and encourage more individuals to venture into business without the constraints of multiple shareholders.
