Corporate Law at Bhutan
Here’s an overview of Corporate Law in Bhutan:
Corporate Law in Bhutan
1. Legal Framework
Corporate law in Bhutan is primarily governed by the Companies Act of Bhutan 2000, which provides the legal basis for incorporation, operation, and regulation of companies.
The Companies Act was enacted to modernize Bhutan’s business environment and promote private sector development.
2. Types of Companies
The Companies Act recognizes several types of companies:
Private Limited Company: Most common form; ownership restricted to a limited number of shareholders.
Public Limited Company: Can raise capital from the public and must comply with stricter disclosure and governance requirements.
Government Company: Companies owned or controlled by the government.
Non-profit Company: For organizations with non-commercial objectives.
3. Company Formation
Companies must be registered with the Registrar of Companies under the Ministry of Economic Affairs.
Incorporation requires submission of:
Memorandum of Association
Articles of Association
Details of directors and shareholders
Payment of prescribed fees
4. Corporate Governance
Companies are required to have:
A minimum number of directors (typically at least two)
Annual general meetings (AGMs)
Proper accounting and record-keeping
Appointment of auditors (for public companies and larger private companies)
5. Regulatory Oversight
The Registrar of Companies oversees registration, compliance, and enforcement.
The government promotes transparency, good corporate governance, and accountability through the Act.
6. Other Relevant Laws
In addition to the Companies Act, corporate activities may be influenced by:
The Foreign Investment Act (governing foreign ownership and investment)
Tax laws administered by the Bhutanese Department of Revenue and Customs
Other sector-specific regulations
7. Foreign Investment
Bhutan encourages foreign investment but imposes certain restrictions and approval requirements, especially in sensitive sectors.
Foreign investors may need to obtain permits from the Bhutanese Ministry of Economic Affairs.
Summary
Bhutan’s Companies Act 2000 provides a solid legal framework for corporate entities.
Private and public limited companies are the main business forms.
Corporate governance is regulated with focus on transparency and compliance.
Foreign investment is allowed but regulated through additional permits.
If you want, I can provide:
Details on the company registration process in Bhutan.
Information on foreign investment restrictions.
Overview of corporate governance obligations for public companies.
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