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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The former Act was repealed, existing companies continued, and transition periods did not preserve inconsistent constitutional provisions indefinitely.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.
Forfeiture of shares
Forfeiture is a formal Board remedy after non-payment and a compliant cure notice; it does not erase the former member's outstanding debt.
Explanation and core rules
The Board may forfeit only after failure to pay and a further compliant notice. The notice gives at least 14 days to pay and warns of forfeiture. Forfeited shares become unallotted shares in company capital. Former membership may end, but the unpaid debt remains recoverable. An aggrieved person may apply to Court to set aside an unlawful forfeiture. Read sections 161(e) and 168(a)(4) together: a forfeiture that changes the Register of Members also requires Registrar notification within 15 days of that register change. Record the forfeiture decision and register-change dates separately.
Step-by-step procedure
- Prove the underlying payment obligation and default.
- Pass authority to issue the statutory cure notice.
- Serve a notice allowing at least 14 days.
- After continued default, pass and reason the forfeiture decision.
- Update register/certificate records and preserve the debt claim.
- Notify the Registrar within 15 days of the resulting member-register change, submit the applicable particulars and retain the receipt.
Documents and evidence
- Allotment and call records
- Cure notice and service proof
- Board forfeiture resolution
- Register update
- Debt statement
- Registrar notification, supporting particulars and receipt
Points requiring care
Particular care is needed to avoid automatic forfeiture language replacing the required notice and Board decision; treating forfeiture as satisfaction of the unpaid debt; and updating internal records after forfeiture but omitting the separate section 168 notification.
Related Act provisions
Section 160 — Call on Shares
Overview of the provision
This provision allows the board to call for payment where a member has not paid an amount due on their shares. If the allotment terms already require payment on a fixed date, the amount falls due then without another call notice. The member must pay following the applicable requirements and constitution once notified or once that fixed date arrives. Joint holders are jointly and individually responsible for payment, so their shared ownership does not divide away the obligation to meet the amount due.
Provision references
(a) Where a member has not paid an amount due on shares held by that member, the Board of Directors may make a call requiring payment of that amount.
(b) Where shares are allotted subject to a condition requiring payment by a specified date, the amount shall become due on that date without the need for a further notice under subsection (a).
(c) Where a member receives a notice from the Board of Directors under subsection (a), or payment becomes due under subsection (b), the member shall pay the amount due in accordance with the applicable requirements and the Constitution of the company. Where shares are held jointly, the joint holders are jointly and severally liable for payment of the amount due.
Section 161 — Forfeiture of Shares
Overview of the provision
This provision allows the board to forfeit shares to the company if a member misses the payment period in a section 160 notice, but the board must first give the further notice required here. That notice must allow at least 14 days to pay the amount due. It must also warn that the shares may be forfeited if payment is not made in time. After forfeiture, the shares are treated as unallotted capital; if the former holder owns no other shares, their name is removed from the members' register. Losing membership does not cancel the outstanding debt, and the company may still sue to recover it. The forfeiture must be entered in the register, and an entry made consistently with the Act and constitution is evidence that the forfeiture occurred.
Provision references
(a) Where a member fails to pay an amount due on shares within the period specified in a notice given under section 160 of this Act, the Board of Directors may, after giving notice in accordance with this section, forfeit the shares to the company.
(b) A notice under subsection (a) shall— (1) require payment of the amount due within a period of not less than 14 days; and
(b) A notice under subsection (a) shall— (2) state that the shares are liable to forfeiture if payment is not made within the period specified in the notice.
(c) Where shares are forfeited under this section, those shares shall be treated as unallotted shares forming part of the capital of the company. Where the person whose shares are forfeited holds no other shares in the company, that person’s name shall be removed from the Register of Members.
(d) Cessation of membership under subsection (c) does not discharge the former member from the obligation to pay any amount outstanding to the company. The company retains the right to commence legal proceedings for recovery of the debt.
(e) A forfeiture under this section must be entered in the Register of Members maintained under section 81 of this Act. An entry made in accordance with this Act and the Constitution of the company is evidence of the forfeiture.
Section 168 — Notification of Share Changes to the Registrar
Overview of the provision
Notifying the Registrar
This provision requires the Registrar to be notified within 15 days of an allotment, transfer, transmission or other change to the members' register, with the relevant persons' particulars submitted for the official register. The submission must include the newly registered member's details and consent; a transfer also requires the transferor's details and transfer instrument. Other prescribed information must be provided too. When the requirements are satisfied, the Registrar must register the change and notify the company.
Corrections and late filing
The Registrar may require a submission believed to conflict with the Act, regulations or articles to be corrected and resubmitted within the reasonable regulatory period. Non-compliance with the section's requirements or periods by the company or a director is an offence under Chapter Fifteen. However, a late initial notification does not alone invalidate a register change otherwise made under the Act and articles. The company's underlying change and its later notification to the Registrar are therefore distinct steps.
Provision references
(a) The Registrar must be notified within 15 days of— (1) any allotment of shares under section 155 of this Act; (2) any transfer of shares under section 163 of this Act; (3) any transmission of shares under section 167 of this Act; or (4) any other change made to the Register of Members. The particulars of the persons concerned must also be submitted to the Registrar for registration in the register specified in section 231 of this Act.
(b) A submission under subsection (a) must be accompanied by— (1) particulars of the newly registered member and that member’s consent; (2) in the case of a transfer under section 163 of this Act, particulars of the transferor and the instrument of transfer; and (3) any other information prescribed by regulations made under this Act.
(c) Where a submission is made in accordance with subsections (a) and (b), and the requirements of this Act are fulfilled, the Registrar shall register the change in the register specified in section 231 of this Act and notify the company accordingly.
(d) Where the Registrar has reason to believe that a submission made under this section contains any matter that conflicts with this Act, regulations made under it or the Articles of Association of the company, the Registrar may direct the company to rectify the matter and resubmit it within such reasonable period as may be prescribed by regulations made under this Act.
(e) Where the company or any of its directors fails to comply with the requirements or periods specified in this section, an offence is committed and action shall be taken in accordance with Chapter Fifteen of this Act.
(f) A failure to comply within the period specified in subsection (a) does not, solely by reason of that failure, invalidate a change made to the Register of Members. Where the change has been made in accordance with this Act and the Articles of Association of the company, the change remains valid.
Section 169 — Court Application to Set Aside Decisions
Overview of the provision
This provision enables an aggrieved person to challenge a section 161 forfeiture or a board refusal to register a transfer under section 163(d). If the Court finds that the decision breached the Act, regulations or constitution, it may set the decision aside and order correction of the members' register. The remedy can therefore address both the decision itself and its recorded effect on membership.
Provision references
(a) Where shares held by a member are forfeited under section 161 of this Act, or the Board of Directors refuses to register a transfer under section 163(d), the person aggrieved may apply to the Court to set aside the decision of the company.
(b) Where the Court determines that the forfeiture of shares or refusal to register a transfer contravened this Act, regulations made under it or the Constitution of the company, the Court may set aside the decision and order rectification of the Register of Members.
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.