Parliament Passes Amendments to Companies Act

The Parliament has approved amendments to the Companies Act, including changes aimed at simplifying the process for increasing the number of board directors in state-owned enterprises.

The government bill, sponsored by Feydhoo MP Ismail Nizar, passed with unanimous support, receiving 85 votes this morning. Under the current Companies Act, the minimum number of board members for state-owned enterprises is determined by law or presidential decree. The new amendment allows this minimum to also be established in the company’s regulations.

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The bill also introduces several changes to administrative time frames. Specifically, it requires that if the number of board directors in public or private companies falls below the minimum, new directors must be appointed within 10 days, reduced from the previous 30-day period.

Additionally, companies are now required to issue notices for Annual General Meetings (AGMs) within three days of receiving written requests, with the meeting to be held within 10 days. Previously, companies had 21 days to issue notices and up to three months to hold the meeting.

For Extraordinary General Meetings (EGMs), the notice period has been reduced to seven days from 14 days.