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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The former Act was repealed, existing companies continued, and transition periods did not preserve inconsistent constitutional provisions indefinitely.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.
Board powers, delegation and authority
The board manages the company within the Act and constitution; delegation does not automatically release directors from responsibility.
Explanation and core rules
Board powers are exercised within the Act and constitution. The board may delegate to a committee, director or employee unless the constitution prohibits it. Delegated acts are treated as acts of the directors and directors remain responsible under section 129. External authority to bind and internal approval should both be documented.
Step-by-step procedure
- Map matters reserved to members, board and management.
- Check statutory non-delegable requirements.
- Adopt a written authority matrix with financial limits.
- Record each transaction-specific approval.
- Monitor delegates and report back to the board.
Documents and evidence
- Reserved-matters schedule
- Delegation/authority matrix
- Committee terms
- Board resolution
- Power of attorney/signatory mandate
Points requiring care
Particular care is needed to avoid a broad job title being treated as unlimited signing authority, as well as delegation without information, supervision or reporting controls.
Related Act provisions
Section 57 — Power of Directors to Bind the Company
Overview of the provision
This provision protects a person dealing with the company in good faith by treating the directors' power to bind the company, or authorise someone else to bind it, as exercised consistently with the constitution. Such a person need not investigate whether the constitution permits the particular act, and good faith is presumed unless the contrary is proved. Members still have a right to seek a court order stopping an unauthorised directors' act, but not where the act is intended to fulfil a binding legal obligation created by an earlier company act. The provision therefore combines protection for good-faith dealings with a qualified internal remedy.
Provision references
(a) In favour of a person dealing with a company in good faith, the power of the directors to bind the company, or to authorise others to do so, shall be deemed to have been exercised in accordance with the company’s constitution.
(b) For the purposes of subsection (a), a person dealing with the company in good faith is not required to inquire whether a particular act of a director is permitted under the company’s constitution. A person shall be presumed to have acted in good faith unless the contrary is proved.
(c) Nothing in this section affects the right of a member of the company to apply to the Court for an order restraining or prohibiting an unauthorised act of the directors. However, no such application may be made in respect of an act intended to fulfil a legal obligation binding on the company as a result of a previous act of the company.
Section 128 — Management of the Company
Overview of the provision
This provision requires management to follow the Act, constitution and directors' decisions. Unless the Act or constitution provides otherwise, the directors exercise the company's powers within the scope and manner the constitution prescribes. The board's management authority therefore operates within the governing legal and constitutional framework.
Provision references
(a) Every company shall be managed in accordance with this Act, the Constitution of the company and the decisions of its directors.
(b) Except as otherwise provided by this Act or the Constitution of the company, all powers of the company shall be exercised by the directors within the scope and in the manner prescribed by the Constitution of the company.
Section 129 — Delegation of Directors’ Powers and Responsibilities
Overview of the provision
This provision allows the board, unless the constitution prohibits it, to delegate directors' powers, obligations and responsibilities to a directors' committee, an individual director or an employee, in the manner the board decides. Delegation does not transfer away the directors' responsibility: the delegate's acts count as the directors' acts, and the directors remain responsible for them. It is a way of allocating work, not a statutory release from accountability.
Provision references
(a) Unless prohibited by the Constitution of the company, the powers, obligations and responsibilities of the directors may be delegated, in such manner as the Board of Directors determines, to— (1) a committee of directors; (2) a particular director; or (3) an employee of the company.
(b) Notwithstanding any delegation under subsection (a), the acts of the person or committee to whom the powers, obligations or responsibilities are delegated shall be treated as acts of the directors, and the directors remain responsible for those acts.
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.