Enactment of the Companies Act 2001
Until 2001, companies in Mauritius were formed under the Companies Act 1984, which was modelled on the English Companies Act 1948. Companies may be limited by shares or by guarantee, or they may be unlimited. Companies are incorporated by swearing a deed of incorporation in front of a notary, after the Registrar of Companies has approved the company’s name. There has to be a local registered office where the company’s books and records are kept, but this can be maintained by a professional firm. There must be a minimum of two directors, and a secretary who must be a local resident. Audited annual financial statements and an annual return must be filed with the Registrar of Companies. Company formation takes between two and three weeks. Minimum authorized capital is MR25,000, and annual registration fees vary between MR4,000 and 8,000 depending on the amount of share capital.
The new Companies Act 2001 replaced most of the Companies Act of 1984, other than sections dealing with insolvency and public companies, which remained in force until new legislation was brought forward in separate bills in 2004.
The Government’s starting point for the new law was New Zealand company law, which is widely regarded among English-speaking jurists as representing the best available compromise between the various modern trends in corporate legislation, now that English law has been so influenced by EU law as to be no longer satisfactory as a model for common law jurisdictions.
The incorporation and management of Offshore Companies and International Companies, which were previously constituted under the separate International Business Companies Act 1994, have been brought under the Companies Act 2001, and the two types of company are now known as Global Business Company 1 (GBC1) and Global Business Company 2 (GBC2).
Some key features of the new legislation
The Act introduces a simple form of incorporation enabling a company to be incorporated on the filing of a single application together with the necessary consents from the proposed directors and secretary and a notice of reservation of the proposed company name. It will not be necessary to submit a constitution at the time of incorporation. If a company wants to depart from the standard requirements set out in the Act, then, either on incorporation or subsequently, it needs to file a separate constitution setting out the departures from the standard form. The new legislation also recognizes the reality of nominee shareholders by allowing companies to operate with just one shareholder.
The Act does away with the need for a separate objects’ clause, and provides that a company has the rights, powers and privileges of a natural person; this incidentally removes the remains of the one-time ultra vires doctrine. This would not preclude a company from stating specific objects in its constitution if it wished to limit the capacity of a company in this way.
The Act replaces the Memorandum and Articles of Association by a single constitution, which is no longer required to be notarized.
Private companies continue to be prohibited from offering shares or debentures to the public and are able to dispense with the holding of company meetings by passing resolutions by means of entry in the company minute book.
Exempt private companies will not be required to appoint a qualified auditor or a qualified secretary and will be entitled to file only a summary statement of accounts with the Registrar.
The proposed legislation retains the distinction between exempt and non-exempt private companies in the same form as in the existing legislation.
The Act introduces no par value shares and permits a company to issue shares which are not designated with any monetary value.
The Act incorporates the new procedure of self-purchase and holding of treasury shares introduced by the Finance Act 1999.
The new legislation makes provision for a company to provide in its constitution for the company to have power to indemnify or ensure its directors, secretary or employees in accordance with the limitations provided by the Act.
The Act contains a requirement that public companies and non-exempt private companies are required to prepare and present their accounts in accordance with international accounting standards and that exempt private companies are required to present their accounts in accordance with accounting practices and principles that are reasonable in the circumstances and having regard to any requirements set out in regulations made under the Act.
The old Companies Act required all companies to appoint an auditor but relieved exempt private companies from the requirement to appoint a qualified auditor. The new Act allows an exempt private company not to appoint an auditor (whether qualified or unqualified).
New provisions allow for the continuation in Mauritius of companies which are incorporated elsewhere and also provides for the incorporation of limited life companies.