Type of Limited Company in cambodia
・ Private Limited Company: A private limited company is a form of limited company with characteristics as follows (Article 86):
– The company may have from 2 to 30 shareholders.
– When a private limited company is established by one person, it shall be called a “Single Member Limited Company.”
– The company may not offer its shares to the public.
– The company has one or more restrictions on the transfer of each class of its shares.
– The company shall be considered as a private limited company once registered in compliance with prescribed forms determined by a Prakas of the Ministry of Commerce.
・ Public Limited Company:
A public limited company is a form of a limited company that is authorized by this law (Law on Commercial Enterprise) to issue securities to the public (Article 87).
Creation of a Limited Company
One or more competent natural persons or legal persons may create a limited company by filing an Article of Incorporation with officials at the Ministry of Commerce (Article 91), and a “Certificate of Incorporation” shall be issued by the Ministry of Commerce after filing (Article 97). A company comes into existence and acquires a legal personality on the date when the company is registered (Article 98).
Shares
The company shall issue a minimum of 1,000 shares with a par value of not less than 4,000 Riels (approximately 1 US dollar) per share and has only one class of shares and the right of the holders of these shares is equal, unless otherwise provided in the Articles (Article 144). The shareholder’s liability to the company is limited to the price of the shareholder’s subscription (Article 147). When there is unanimous shareholder agreement, the existence of such agreement has to be written on the share certificate (Article 223).
Khmer Nationality
A company shall be deemed to be of Khmer nationality if the company has a place of business and a registered office in Cambodia and more than 51% of the voting shares of the company are held by a natural or legal person of Khmer nationality (Article 101).
Requirement for Records:
A company shall prepare and maintain, at its registered office, records containing (Article 109):
・ The articles and by-laws and all amendments thereto
・ Minutes of meeting and resolutions of shareholders
・ Copies of all notices required to be sent or filed in accordance with the law
・ Securities register
In addition to the above records, a company shall prepare and maintain adequate accounting records for a period of ten years after the end of the fiscal year to which the records relate (Article 113).
Directors
A private limited company shall have one or more directors, while a public limited company shall have at least three directors. Shareholders shall elect directors by ordinary resolution (Article 118) and the board of directors shall elect a chairman from among its members by a majority vote of the directors (Article 127). Each director shall be elected for a term of two years and may be re-elected (Article 121.) Any legally competent natural person over 18 years old may serve as a director (Article 120).
Board of Directors
The Board of Directors shall manage the business and affairs of a company. Subject to the articles, the directors may exercise the following powers (Article 119).
・ Appoint and remove all officers, determine the specific powers and set the salaries and other compensation for such officers
・ Issue notes, bonds and other evidence of debt of the company
・ Propose to shareholders amendment to, or removal of the articles of incorporation, or an agreement of merger or consolidation between the company and any other person
・ Propose to shareholders a dissolution or liquidation of the company, etc.
Merger
Two or more companies may merge into one company or may consolidate to form a new company. The legal personality of a constituent company (a dissolving company) ceases from the date the Ministry of Commerce issues a Certificate of Merger to the surviving company (a company that continues the business) (Article 241). The board of directors of each company that proposes to merge shall adopt a resolution approving an agreement for merger. Such resolution shall be approved by a majority of all directors (Article 242). Detailed procedures for effecting the merger are stipulated in Articles 243 to 250.
Dissolution and Liquidation
A company that has not issued any shares may be dissolved at any time by resolution of all the directors. A company that has no property and no liabilities may be dissolved by special resolution of the shareholders. The company shall send the articles of dissolution to the office in charge of company administration of the Ministry of Commerce and, upon receipt of such articles of dissolution, the Ministry of Commerce shall issue a certificate of dissolution (Article 251).
A director or a shareholder who is entitled to vote at an annual meeting of shareholders may propose the voluntary liquidation and dissolution of a company (Article 252). The procedures for the voluntary liquidation and dissolution are defined in the articles from 252 to 257. The dissolution and liquidation provisions shall not be applied to any company that has applied for bankruptcy to the court (Article 258).
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