1. Myo Min Director Company Affairs Division
Myanmar Companies Law
Myo Min
Director
Company Affairs Division

2. Key changes in the new law
Single shareholder/single director companies
Company constitution
No more fixed value for shares or authorised capital
Foreigners allowed to own up to 35%
Myanmar resident director
Overseas corporations (as branch offices)
Small company exemptions
Easier decision making (written resolutions)
Solvency tests
Better corporate governance
Directors duties and liabilities
New DICA enforcement powers

3. DICA’s Role under the Companies Law
Register companies, overseas corporations and associations (Division 2)
Maintain public registry of information on companies in Myanmar (sections 419 to 421)
Monitor and inspect information filed with DICA (sections 426-7)
Investigate suspected breaches of Companies Law (sections 269 to 278, 426)
Issue penalty notices for offences under Companies Law and impose late filing fees (section 439)
Take legal action for breaches of Companies Law in Court proceedings (sections 436-8)

4. How companies are regulated
Internal Affairs of companies
(Governance & management)
Regulated by Companies Law and:
Company constitution
Shareholders Agreements (JV)
Securities Exchange Law and Rules
Court rules and procedures on winding-up
External Affairs of companies
(Conduct of business)
Regulated by laws concerning business activities:
e.g. Investment Law, Taxation Laws, Competition Law, Labour Laws
Laws regulating sectors:
e.g. Mining Law, Hotel and Tourism Law, Financial Institutions Law
Criminal (Penal) Code and Procedures

5. Legal characters of a company
Artificial legal person
Separate legal personality
Limited liability
Perpetual existence
Transferability of shares
Separate property
Delegated management
The modern world is built on two centuries of industrialisation. Much of that was built by equity finance which is built on limited liability.
(The Economist, 31 December 1999)

6. Private companies vs. Public companies
Characteristics
Private Companies
Public Companies
Minimum & Maximum shareholders
Minimum 1 and maximum 50
Minimum 1 and no maximum
Number of directors
1 minimum
3 minimum
Restriction on shares
Cannot invite public to purchase its shares or debentures
Can invite the public to purchase its shares or debentures
Issue of prospectus
Not required
Required to issue a prospectus or statement in lieu of prospectus
Transferability of shares
Right to transfer is restricted (in constitution)
Freely transferable
Myanmar Companies Law Training Module 1

7. Overseas corporations = branch offices
“Overseas corporation” – Any company or other corporation incorporated outside the Union (section 1(c)(21)
An overseas corporation must not “carry on business” in Myanmar unless registered with DICA (section 43)
“Carrying on business” test (section 43(b))
Must appoint an “authorised officer” (section 47(b)(iii))
Authorised officer is a person who resides in Myanmar for 183 days minimum
Residency requirement starts from date of registration
Myanmar Companies Law Training Module 1

8. “Foreign company” concept
“Foreign company” means a company incorporated in the Union in which an overseas corporation or other foreign person owns or controls, directly or indirectly, an ownership interest of more than 35% (s. 1(c)(14))
“ownership interest” (s. 1(c)(22)) means a legal, equitable or prescribed interest in a company including:
(A) a direct shareholding in the company;
(B) a direct or indirect shareholding in another company which itself holds a direct shareholding, or an indirect shareholding, in the first company; or
(C) through an agreement which provides a direct or indirect right to exercise control over the voting rights on any resolution of the company;
Myanmar Companies Law Training Module 1

9. Quiz: Which of these are foreign companies?
Company A
Company B
Foreigner
Myanmar citizen
Company C
Overseas corporation
35%
30%
65%
35%
50%
Company B is FC
Company C is FC
35%
50%
Myanmar Companies Law Training Module 1

10. “Foreign company” requirements
Only 3 sections in the MCL mention “foreign companies” (FC)
Section 6(b)(viii) Must state in company registration application whether a company is an FC
Section 86(b) Must state whether share transfer causes a company to become or cease to become an FC
Section 97(b)(vii) Must state in the annual return whether a company has become or cease to become an FC
All sections of the Companies Law apply equally to all companies (foreign or local)
Myanmar Companies Law Training Module 1

11. “Foreign company” concept
NOT a type of company
A classification of companies based on ownership. “Foreign company” can be private company, public company or a company limited by guarantee, unlimited company.
Myanmar Companies Law Training Module 1

12. “Small company” concept
“Small company” means a company (other than a public company or subsidiary of a public company) which satisfies the following conditions:
(A) it and its subsidiaries have no more than 30 employees; and
(B) it and its subsidiaries had annual revenue in the prior financial year of less than 50,000,000 Kyats in aggregate
Two sections of the MCL relate to “small company”
Section 146(e) – AGM exemption
Section 157(e) – Financial reporting and audit exemption
Safeguards to exemptions - DICA, members, company constitution
Myanmar Companies Law Training Module 1

13. Who makes decisions for a company?
Shareholders
Directors
Rules for decision making
Companies Law
Company constitution
Shareholders Agreement (or Joint Venture Agreement)
Myanmar Companies Law Training Module 1

14. Shareholders vs. Directors
Manage the business of the company
Do not need to be a shareholder
Must comply with directors duties in the law and company constitution
Can vote on director resolutions
Shareholders
Owners of the company
Do not need to be a director
Can vote for appointment or removal of directors
Can vote on shareholder resolutions [
Myanmar Companies Law Training Module 1

15. Decision Making Powers
Shareholders
Request shareholder meetings of the company
Vote on resolutions at shareholder meetings
Only shareholders can approve members’ resolutions such as:
Change constitution
Change name
Change company type
Appoint or remove directors
Directors
Sign contracts on behalf of the company
Make decisions such as hiring employees
Decide business plan and strategy
Approve BOD resolutions such as:
Approve share transfers
Issue or allot new shares
Hire employee
Pay dividends
Myanmar Companies Law Training Module 1

16. Decision making by companies (Meetings)
Shareholder Meetings
Annual General Meeting
Special General Meeting
Statutory Meeting
Director Meetings
Board Meetings
Committee Meetings
Creditor Meetings
Debenture holder meetings
Creditor and contributory meetings (for liquidation)
Myanmar Companies Law Training Module 1

17. Shareholder Meetings
Annual General Meeting (AGM) (sections 146,147,151,152)
To be held within18 months from incorporation and once every calendar year
Meeting is called by chairman or directors
Meeting notice must be sent to all members (21 days’ notice for private companies and 28 days’ notice for public companies)
One vote for every share held by a shareholder (one vote per shareholder on a show of hands)
Special General Meeting (SGM)
All other meetings of shareholders which is not the AGM or Statutory Meeting
Statutory Meeting (section 148)
Only public companies and companies limited by guarantee with shares
Within 6 months and not less than 28 days from commencement of business
Myanmar Companies Law Training Module 1

18. Shareholder resolutions
Ordinary resolution – Passed by a majority of votes (Section 1(c)(20))
Appoint a director and remove a director
Appoint an auditor
Approve financial reports
Approve benefits and pay for directors’
Shareholder resolutions must be passed by ordinary resolutions unless the law requires a special resolution (Section 155)
Special resolution – Passed by 75% or more of votes (Section 1(c)(40))
Change of company name, change of company type, change of constitution, approve capital reduction and share buy-back, issue preference shares, conversion of shares
Myanmar Companies Law Training Module 1

19. Director Meetings Director meetings (section 145)
Procedure for directors’ meetings usually set out in the company constitution, e.g. notice requirements, voting and quorum
Any director can call a meeting of directors
Can use any technology to hold meetings (Skype, telephone, etc)
Director resolutions
Passed by a majority of votes of directors with chairman having casting vote
Directors can pass board resolutions but shareholder resolutions (approval) is still required for certain matters (see previous slide)
Myanmar Companies Law Training Module 1

20. Written Resolutions
Single shareholder & director companies (section 156(a)&(b))
Company with 1 director does not need director meetings. Sole director can pass resolution by signing them.
Company with 1 shareholder does not need shareholder meetings. Sole shareholder can pass resolutions by signing them.
Written director resolutions (section 156(c))
Directors can pass a director resolution without a meeting if all directors sign a copy of the resolution. Resolution passed when all directors signed.
Written shareholder resolution (section 156(d))
Private companies can pass a shareholder resolution without a meeting if all members sign a copy of the resolution. Resolution passed when all members have signed.
Myanmar Companies Law Training Module 1

21. Directors and officers
Myanmar Companies Law Training Module 1

22. Who is an officer? “officer” of a company means a person who:
(A) makes decisions (or participates in decisions) that affect the whole, or a substantial part, of the business of the company; or
(B) has the capacity to significantly affect the company’s or body’s financial standing; (section 1(c)(17))
All of the directors duties and liabilities (section ) in the law are also imposed on officers
Officers (together with directors) are subject to all the penalty provisions in the law
Myanmar Companies Law Training Module 1

23. Company registers DICA Companies Register of members
Register of debenture holders
Register of other interests
Register of option holders
Register of members
Registry
Myanmar Companies Law Training Module 1

24. Register of members
A register of members must contain (section 90(c)-(d)):
the names, addresses and nationalities of the members;
the date a person was entered in the register as a member; and
the date a person ceased to be a member
the date every allotment of shares takes place;
the number of shares in each allotment;
the shares held by each member;
the class of shares;
the share numbers and share certificate numbers of the shares;
the amount paid on the shares;
whether or not the shares are fully paid; and
the amount unpaid on the shares (if any).
Myanmar Companies Law Training Module 1

25. Electronic registry
Myanmar Companies Law Training Module 1

26.  APPLICATIONS
Member limits?
Can be foreign?
Can be “small”?
Model constitution?
Form No.
1. Private Co limited by shares
Can have no more than 50 Y
Yes
Form A1
Public Co limited by shares No
Form A2
Company limited by guarantee— with share capital
Form A3
Company limited by guarantee— no share capital
Unlimited Company
Form A4
Special Company Act —private company limited by shares
Form A6
Special Company Act —public company limited by share
Form A7
Overseas Corporations
Form A8
Associations— Same as company limited by guarantee with no share capital
Form A5

27. RE-REGISTRATION Member limits? Can be foreign? Can be “small”?
Model constitution?
Form No.
1. Private Co limited by shares
Can have no more than 50 Y
Yes
Form B1
Public Co limited by shares No
Form B2
Company limited by guarantee— with share capital
Company limited by guarantee— no share capital
Unlimited Company
Special Company Act —private company limited by shares
Form B4
Special Company Act —public company limited by share
Form B5
Overseas Corporations
Form B6
Associations— Same as company limited by guarantee with no share capital
Form B3

28. Re-registration of companies
All existing companies, associations and branch offices will be required to re-register in the new registry Myanmar Companies Online (MyCO).
Re-registration is completely free.
Update all company details in the Re-registration Form (without separate filings or fees).
Re-register within six months by 31 January 2019
Simply complete a “Re-registration Form” online or deliver a hardcopy to a DICA office.

29. Prepare for the new Companies Law
Review new model company constitution – Decide whether to adopt it and whether to retain business objects of the company
Check company’s share capital – Confirm how many shares on issue, issue price for each share, paid up capital, unpaid capital, shareholders details
Prepare company registers – Update register of members, register of directors, register of mortgages and charges, register of options/ debentures/securities (if any) and decide where they will be kept
Review Directors Duties – New director duties and liabilities under the new law
Re-register your company – Complete re-registration online or at DICA

30. ? myomin.dec1976@gmail.com +95 9 259003179 +95 67 406124
Myanmar Companies Law Training Module 1