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1. How to use this manual
Begin with a practical question, move to the mapped provisions, and finish by checking the current official filing route.
Subject: Orientation and legal framework
Act references: Practice orientation
Key point: Practice notes explain a workflow; the expandable statutory blocks show the relevant provisions in English.
2. Sources and hierarchy of authority
A reliable opinion distinguishes enacted law, regulations, administrative procedure and the English translation.
Subject: Orientation and legal framework
Act references: s. 1; s. 247; s. 248; s. 249; s. 250; s. 251
Key point: The official Dhivehi Gazette text of Law No. 7/2023 is the primary enacted source.
3. Scope and objectives of the Act
The Act supplies the lifecycle framework for formation, registration, operation and dissolution while aiming at simpler rules and transparent registers.
Subject: Orientation and legal framework
Key point: The Act governs formation, registration, operation and dissolution of companies in the Maldives.
4. Registration and separate legal personality
Registration creates a separate legal entity with perpetual succession, ownership of its assets and capacity to sue and be sued.
Subject: Orientation and legal framework
Act references: s. 23; s. 24; s. 25
Key point: The certificate records the company's name, number, type and registration date.
5. Transitional position and current-law check
The former Act was repealed, existing companies continued, and transition periods did not preserve inconsistent constitutional provisions indefinitely.
Subject: Orientation and legal framework
Act references: s. 241; s. 242; s. 243; s. 244; s. 245; s. 246
Key point: Companies registered under the former law continued under the new Act.
6. Company types and classification map
The Act recognises four company types, while foreign investment operates as an additional classification cutting across private and public companies.
Subject: Choosing the company vehicle
Act references: s. 3; s. 4; s. 5; s. 6; s. 7; s. 8
Key point: The four company types are private, public, government and local authority companies.
7. Private company
A private company may have one to 50 members, one or more directors and no public offer of its shares.
Subject: Choosing the company vehicle
Act references: s. 4; s. 9; s. 10; s. 11
Key point: The share capital consists of one or more shares.
8. Public company
Public-company status is tied to authority or an intention to seek authority to offer securities to the public and carries additional governance requirements.
Subject: Choosing the company vehicle
Act references: s. 5; s. 12; s. 13; s. 14
Key point: The constitution must expressly state that the company is public.
9. Government company
A government company is wholly Government-owned and formed by Presidential decree or statute, with the Companies Act operating alongside its constituting instrument.
Subject: Choosing the company vehicle
Act references: s. 6; s. 15; s. 16; s. 17; s. 18
Key point: All shares forming the capital are registered in the name of the Government.
10. Local authority company
A local authority company is formed by one or more councils for economic activities within council jurisdiction and basic-needs responsibilities.
Subject: Choosing the company vehicle
Key point: Ownership and purpose derive from the council framework in section 7.
11. Foreign investment company
Any direct or specified indirect foreign participation can bring a private or public company within the foreign-investment classification.
Subject: Choosing the company vehicle
Act references: s. 8
Key point: The classification captures a company with any share registered to a foreign individual or entity.
12. Foreign company re-registration
A foreign legal entity may operate through re-registration, but must obtain the relevant authorisation, appoint a qualified Maldives-resident agent and maintain change reporting.
Subject: Choosing the company vehicle
Act references: s. 33; s. 34; s. 35; s. 36; s. 37
Key point: A foreign company must not conduct activity in Maldives without the required registration.
13. Pre-incorporation decision map
Good formation work begins before the application: activity, ownership, control, capital, constitutional protections and regulatory dependencies must be settled first.
Subject: Formation and registration
Key point: Registration requires a reserved name, company type, address, capital/share information, constitution and director particulars.
14. Company name selection and reservation
A company name must be available, accurate, non-misleading and compliant with the Act, Regulation and business-name rules.
Subject: Formation and registration
Act references: s. 66; s. 67; s. 68; s. 69; s. 70; s. 71; s. 72; s. 73; s. 74
Key point: The name must reflect the true nature of the company and must not be misleading or prohibited.
15. Registering a private company
A private-company filing should be the final expression of an agreed ownership and governance structure, not the starting point for those decisions.
Subject: Formation and registration
Act references: s. 20; s. 21; s. 23; s. 24; s. 25
Key point: The application identifies the reserved name, type, registered address, capital and agreed initial share distribution.
16. Registering a public company
Public-company formation requires the Companies Act registration workstream and a separate securities-law workstream for any public offer.
Subject: Formation and registration
Act references: s. 12; s. 13; s. 14; s. 20; s. 21; s. 23; s. 24; s. 25; s. 171; s. 172; s. 173
Key point: The constitution expressly identifies public-company status.
17. Registering Government and local authority companies
Formation must reconcile the Companies Act application with the instrument and approvals that create or authorise the public body company.
Subject: Formation and registration
Act references: s. 15; s. 16; s. 20; s. 22; s. 23; s. 24; s. 25
Key point: A Government company may be established by decree or statute and registered under the Act.
18. Re-registering a foreign entity
Re-registration preserves the foreign entity while placing its Maldives operation, agent and information within the local register.
Subject: Formation and registration
Act references: s. 33; s. 34; s. 35; s. 36
Key point: Foreign investment authorisation precedes re-registration.
19. Foreign-company agent: role and exposure
The agent is more than a postal contact: the Act assigns responsibility to the Registrar and personal liability in respect of enforcement against the foreign company.
Subject: Formation and registration
Key point: The agent must be an individual aged at least 18, ordinarily resident in Maldives and free of the specified disqualifications.
20. Certificate and day-one corporate housekeeping
The first post-registration work should convert a certificate into a functioning, evidenced corporate organisation.
Subject: Formation and registration
Act references: s. 23; s. 24; s. 25
Key point: The certificate is evidence of incorporation and its registration date.
Lifting the corporate veil
Separate personality may yield to personal liability where the statutory conditions in section 65 are established.
Explanation and core rules
Veil lifting is an exceptional statutory remedy, not a general response to an unpaid company debt. The precise conduct, responsible persons, causation and statutory conditions must be proved. The Court may order winding up or give directions for future conduct in addition to personal-liability consequences described by the section.
Step-by-step procedure
- Start with the separate-entity rule.
- Identify the exact section 65 pathway and factual actors.
- Trace benefit, control, asset movement and loss.
- Preserve accounting and decision records.
- Frame relief proportionately and address winding-up consequences.
Documents and evidence
- Corporate structure chart
- Bank and asset records
- Board/member records
- Related-party agreements
- Loss analysis
Points requiring care
Particular care is needed to avoid using 'alter ego' labels without pleading the statutory elements, as well as confusing director-duty liability with veil lifting.
Related Act provisions
Section 65 — Lifting the Corporate Veil
Overview of the provision
When personal liability may arise
This provision allows the Court, subject to subsection (b), to look beyond the company's separate legal identity where it is used for fraud or solely for the personal benefit of directors, members or officers. Those involved may then become personally responsible for acts carried out in the company's name. The stated conditions are cumulative: company and owners do not operate separately, fraudulent or wrongful conduct is concealed or liability avoided through the company, and that misuse directly causes loss for which corporate personality is being used to escape responsibility.
The conduct and possible orders
The Court may consider fraudulent conduct, misappropriation or unauthorised use of assets, deliberate direct or indirect misuse of corporate personality for someone's benefit to the company's detriment, and dividends declared while debts cannot be paid. On an application under this section, it may impose unlimited personal liability jointly or individually on the relevant directors, members and officers. After making that determination, it may order winding up or direct how the company's affairs should be conducted in future.
Provision references
(a) Subject to subsection (b), where a company registered under this Act engages in fraudulent activities, or where its directors, members or officers use the company solely for their personal benefit, the Court may lift the corporate veil. In such a case, notwithstanding the separate legal personality of the company, the directors, members or officers involved may be held personally liable for acts carried out in the name of the company.
(b) The Court may lift the corporate veil and hold directors, members or officers personally liable in respect of the affairs of the company where— (1) the company and its owners do not operate as separate entities; (2) the acts of the company are fraudulent or wrongful and the company is being used as a façade to conceal those acts or evade liability; and (3) the misuse of the company has directly caused loss to any person and the corporate personality of the company is being used to avoid legal responsibility for that loss.
(c) In determining whether to lift the corporate veil, the Court may regard the following as fraudulent or wrongful acts— (1) engaging in conduct that may be regarded as fraudulent; (2) misappropriating or making unauthorised use of the assets of the company; (3) deliberately misusing the legal personality of the company, directly or indirectly, for the benefit of the person concerned or another person, resulting in prejudice to the interests of the company; and (4) declaring dividends at a time when the company is unable to pay its debts.
(d) Upon an application made to the Court under this section, the Court may determine that the directors, members and officers concerned are personally liable, jointly or severally and without limitation, for the acts of the company.
(e) Where the Court determines personal liability under subsection (d), it may— (1) order the winding up of the company; or (2) give directions for the future conduct of the affairs of the company.
This page is a general research and practice aid. The translations used in this manual are unofficial. Verify the official Dhivehi legislation, amendments and current procedures before relying on any entry. Read our sources and verification guidance and contact a lawyer at Sulthan & Amhar for advice on your circumstances before relying on this material or taking action.