By Maung Digar
WITH a view to facilitating the economic development of Myanmar economy in conjunction with the growth of the private sector expansion, the Myanmar Companies Law was enacted in line with the international norm and standard.
In the backdrop of perfect setting and situation embedded in the Myanmar Companies Law being combined with the stylish and smart new electronic registration system of MyCO (Myanmar Companies Online), which brings prompt and accuracy, has earned good reputation in easing business inside the country as well as abroad. The new system with electronic registration platform reduces red tape, saves time and cuts expenditures in a remarkable way.
Myanmar Companies Law
Company incorporation is carried out by Directorate of Investment and Company Administration (DICA) in accordance with the provisions of Myanmar Companies Law (2017) and investment proposal applications are subjected to Myanmar Investment Commission.
DICA has the responsibility of shouldering the task as registrar and also act as legal and juridical person. Moreover, the DICA has to oversee the irregularities of the companies and act as regulator.
The registrar will establish and maintain the electronic registry platform. Any registry transaction will be carried out using the electronic registry system.
Taking under its charge, the DICA is to entrust the MyCO for maintaining and up keeping of all the detailed information and statistics being provided by the companies.
Relevant information starting from the first registration of the company and all the subsequent updates of the company are to be informed to DICA.
An application for the re-registration of an existing company must include: (i) the full name, date of birth, gender, nationality and address of every director and secretary of the company, (ii) the address of the registered office and (iii) the address of the principal place of business of the company.
In the case of an existing company, the application must include the full name and address of every member of the company, and the number and class of shares issued to each member; whether the company has an ultimate holding company, and whether the company will, on re-registration, be it a foreign company or domestic company.
All the companies are required to use the forms being prescribed by MyCO in filling up the relevant data and information of the company. It means to enable necessary check in the digital registration system when needed. Prescribe fees is to be levied for such services on the nature of subject. In the case of delay for timely submission of data and information, then the company is liable for late fees.
Evidently, it is quite clear that the digital registration system had been crafted and created systematically with the relevant forms within the framework of the stipulations outlined in the Myanmar Companies law with the intent to function properly and effectively.
For many years, the reforms over the smooth registration have been long awaited in great expectation to be realized as the previous system was very much messy and bonded with red tapes for doing business.
Responsibility of the registrar
At this juncture, a question may arise on the responsibility of person over the authenticity and accuracy of the information and data of the company, and the legitimacy and legality of the figures being provided.
As some of the persons from the companies are not familiar with the scope and span of the digital registration platform of MyCO system, which is being formed with international norms, there exists incorrect interpretation and misunderstanding. Therefore, clarification of the responsibility of the registrar is needed to be unveiled.
Taking on the shoulder, the Director-General of DICA acts as the registrar holding the task for the legal registration of the companies and upkeep the data and information of the companies in the MyCO standardized digital computer system with safe and protected mode.
Working standard and procedure are in line with the international norm in accepting the data being provided by the company.
The relevant meeting min utes, the share holder certificates, the official documents, the evident papers, the necessary register books must be maintained in proper and legitimate manner in the hands of the company.
With regards to the legality of the information and data, the person that have signed and submitted the relevant entries must stand as witness over the facts mentioned.
In other words, it means that the company and the person who submitted the information and data to MyCO have to take the responsibility of its accuracy, legitimacy and comprehensiveness.
For example, if the submitted information is erratic such as that of missing name of a director; that of unclear and undecided responsibility of the secretary; that of uncertain shareholders list; that of bogus share amount; that of the willful breach of the company constitution might resulted with the dissatisfaction among the concerned persons. In such circumstances, legal prosecution could occur from the discontent person from the said company or other companies.
Responsibility in the context of law
The responsibilities of the directors include that of making decisions over the matters of the company and its implementation; that of the realization of annual general meeting of the shareholders; that of the organizing of normal general meeting; that of the submission of the accounts of the company to the DICA; that of communicating and interacting with other government departments as necessary; and that of up keeping the updated information of the members, the directors and the secretaries; the proper filing and up keeping of the meeting minutes and its decisions; the up keep of the company constitution; the up keep of the relevant mortgage of the company and its liabilities. All these related documents under referral are to be kept at the company’s domain.
Looking into the salient points of the Myanmar Companies Law, it clearly defines the responsibilities of the directors and at the same time it protects the benefits of the shareholders.
On the part of the shareholders, they are entitled and have the rights such as that of to check the relevant information of the persons working for the company; that of the rights to examine other registered books of the company; that of to inspect over the decisions of the shareholders and the meeting minutes; that of the rights to have the copy of the company constitution; that of receiving company financial statements; that of getting the profit thus gained from the company; that of the rights to ask the directors to call a general meeting by those who have ten percent shareholders. The entitlements and the rights of the shareholders are clearly defined in the law.
Need to abide the rules
According to the prescribed rules and regulations, the cases regarding the conflict of interests among the companies or among the shareholders, and the cases in the context of administrative nature, these matters are not under the purview and ambit of DICA. The relevant organizations or the legal courts have the authority to intervene and solve the matters.
Falsification of information being submitted to MyCO could be dealt by DICA in accordance with the Myanmar Companies Law, and make the ruling according to law.
Any wrongdoing on part of a company would entail a breach of rules and regulations, and it would be tantamount to a violation of the law. It also tarnishes the reputation of the company. It ruins the corporate morality and ethics. All these might lead to negative impact for the company and the shareholders. With a view to avoiding unnecessary consequences, it is advisable that the directors and the persons working for the company are required to abide by the stipulations as defines in the Myanmar Companies Law.
Translated by UMT (Ahlon)
