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Over 800 Myanmar companies struck off register
The Myanmar government has signalled its intention to tighten up corporate discipline by removing more than 800 companies from the official register for failing to submit their annual returns on time.
The Directorate of Investment and Company Administration (DICA) said on May 9 it had removed 810 companies from the register for not filing their annual returns via Myanmar Companies Online (MyCo), the official electronic registry system established under the Companies Law, which entered into force in 2018.
“Striking off companies for prolonged failure to make company filings is actually a normal aspect of the activities of a company registrar. In fact, this striking off exercise is a positive development in Myanmar’s corporate regulatory landscape,” commented Mark Livingston, managing director of Livingstons Legal, a corporate law firm in Yangon.
“It confirms that DICA is continuing to progress towards a more compliance-focused approach and to thereby maintain the ‘hygiene’ of the Myanmar company register,” he said.
Graphic: The Myanmar Times
MyCo, DICA’s online searchable database, provides free and open access to corporate information not previously available.
Businesses used to set up multiple corporate entities for different types of activities. But now they are allowed to register as one company and this has led to many entities becoming defunct.
There were around 66,500 registered firms and over 11,000 suspended entities as of April, according to DICA figures. DICA can place a company in suspended status where it does not file its annual return, and then can strike it off if it fails to take action within six months.
This is the biggest striking off exercise since DICA removed more than 2500 firms from its list in 2016, before the electronic system was put in place. It is the first instance of DICA citing a failure to file annual returns as its reason.
“Company registries should be operated in a way that places an onus on directors and officers to proactively manage their company filings,” Mr Livingston said.
He advised directors of suspended firms to promptly file their returns as it was otherwise clear that DICA would assume they were no longer operating. “That’s the approach DICA should be taking under the Companies Law and is, in our view, the correct way to be managing the company registry.”
Source: https://www.mmtimes.com/news/over-800-myanmar-companies-struck-register.html