Companies Act 2016 (“CA2016”) has come into forced on 31st January 2017.
Salient points on CA2016:
- Simplify procedures for incorporation.
- Single resident director and single shareholder for private company. Public company must have at least two resident directors.
- Company secretary may be appointed within 30 days of incorporation [except for Company Limited by Guarantee (“CLBG”)]
- For company incorporated before 31st January 2017, Memorandum of Association and Articles of Association (“M&A”) is deemed to be the constitution of the company. The company can decide to abolish the M&A or harmonised the M&A with CA2016.
- For company incorporated after 31st January 2017, the company may or may not adopt constitution after incorporation but constitution is compulsory for CLBG.
- Company will no longer be required to state its authorised share capital.
- Notice of registration is a conclusive evidence of incorporation.
- Common seal is optional.
- Share certificate is optional and no longer be evidence of title.
- Mitigation towards No Par Value Regime.
- Dividends can only be distributed out of profits when the solvency test is met.
- Removing the mandatory requirement for private companies to hold Annual General Meeting (“AGM”)
- Decoupling of Financial Statement and Annual Return submission.
- Annual return to be lodged within 30 days of anniversary of incorporation of the company.