The Myanmar Companies Act
The Myanmar Companies Act (previously and sometimes refered to as The Burma Companies Act) is contained in Volume IX of the Myanmar Code. Enacted prior to Myanmar’s independence it reflects British common law principles in existence when Code was drafted.
The Myanmar Companies Act allows for companies to be established as either a “public company” or “private company” in three ways:-
(1) a company limited by shares;
(2) a company limited by guarantee; or
(3) an unlimited company.
As is the case in other common law jurisdictions, company limited by shares are most common. The Myanmar Companies Act also provides for the establishment of not for profit associations.
All Myanmar companies are required to register with the Companies Registration Office (CRO)
Myanmar Companies Act – Key provisions relating to directors
- “director” is defined as “any person occupying the position of a director by whatever name called.” (2 (5)
- directors are an officers of the company (2 (11)
- Directors can be removed at any time by extraordinary resolution (86G (1))
- The directors are responsible for providing a statutory report to company members (77 (2)
- Except with the consent of the directors, a director of the company, or the firm of which he is a partner or any partner of such firm, or the private company of which he is a member or director, shall not enter into any contracts for the sale, purchase, or supply of goods and materials with the company (86F)
- Each director is required to meet specified shareholding requirements. Pursuant to the provisions of the MCA a company’s articles of association must provide that each director hold at least one share in the company. The shareholding requirement must be met within two months after the director is appointed or such shorter time as may be fixed by the articles of association. (S85)
- A company cannot make any loan (or guarantee) to a director of the company or to a firm of which such director is a partner or to a private company of which such a director is a director. (S70)
Myanmar Companies Act -Key provisions relating to books of account
- Pursuant to the Myanmar Companies every company has to maintain proper books of account in Myanmar or English (1955 amendment act)
- The books of account may be kept at the registered office of the company or at such other place as the directors think fit and should be open for inspection by the directors during business hours. (S130)
Myanmar Companies Act – Winding Up/ De-registration
Section 162 of the Myanmar Companies Act sets out the grounds whereby the court can order the winding up of a company. More detailed information on winding up and deregistration in Myanmar is available here.
Revised Myanmar Companies Act
The Myanmar Companies Act is in need of revision to be brought up to a modern international standard and to suitable as a legal framework for economic development in Myanmar a revised MCA is set to be introduced by the end of 2014. The Asian Development Bank is assisting the government to draft the new law.
The law is expected to include provisions to encourage the development of local SME’s. The new law will be written in the Myanmar language rather than English and then translated (The 1914 Act was written in English and then translated into Myanmar).
The Burma Special Companies Act (1950) is also set to be revised and may be included in the appendix of the new Myanmar companies Act nstead of as a separate piece of legislation.
Charltons advises investors who wish to conduct operations in Myanmar using a company established under the Myanmar Companies Act as an alternative to esablishing under the 2012 Myanmar Foreign Investment Law which requires an application to the Myanmar Investment Commission for an MIC Permit.