A limited liability company may be created by filing a Memorandum and Articles of Incorporation (“M&A”) with the Director of Companies of the Ministry of Commerce. The Ministry of Commerce (the “MoC”) is very traditional. Every change from the standard format of M&A (provided by the MoC) will be carefully scrutinized. Even changes of the headings of the articles in the M&A may be ground for rejection.
Any substantive changes must fit within the approved format and sequences that is familiar to the MoC.
The official and controlling version of the M&A is the Khmer language version, although as a matter of custom the MoC permits the English language version to be filled at the same time as the Khmer version.
Required Information
Article 93 of the LOCE states the required contents to be stated in the M&A:
(a) The name of the company;
(b) The company’s registered office in the Kingdom of Cambodia.
(c) The objectives of the company and any restrictions on the business that the company may carry on. Company objectives may include one or more types of businesses not contrary to any provision of law.
(d) The authorized capital to be stated in national currency.
(e) The classes and any maximum number of shares and the par value per shares that the company is authorized to issue.
(f) If the company is authorized to issue more than one class of shares, the articles of incorporation shall state the maximum number of shares and the par value per share and shall describe the rights, privileges, restrictions and conditions attached to each class.
(g) If a class of shares may be issued in series, the articles shall authorize the directors to fix the number of shares in each series, to determine the designation of each series, and to determine the rights, privileges, restrictions and conditions attached to each series.
(h) If the issue, transfer or ownership of shares of the company is to be restricted, a statement to that effect and a statement as to the nature of such restrictions.
(i) The name and complete address of each shareholder.
(j) The number of directors, or the maximum and minimum number of directors of the company.
Article 94 of the LOCE states the articles may also include any necessary provision.
The M&A may be executed either through a private agreement or through a notary. The articles shall be signed or initialed by all the shareholders (LOCE Article 95).
Amendment of the M&A
The M&A may be amended by a Special Resolution of the shareholders. A limited liability company may amend its M&A at any time (LOCE Article 235) by a Special Resolution.
Written notice of a general meeting of the shareholders to amend the articles must be given at least twenty (20) days before the meeting to the shareholders entitled to vote on the amendment. A copy of the text of the proposed amendment shall be enclosed with the notice of the meeting (LOCE Articles 236 & 237).
Amendments to the M&A may change the company’s name, objectives, or details shares or shareholding, dividends payable, company’s duration, registered office, etc.
All documents relating to the amendment of the M&A shall be filed with the Director of Companies no later than 15 days after the special resolution was approved. The Director of Companies shall issue a certificate of amendment that fixes the dated thereof (LOCE Article 239 & 240).
The LOCE Article 238 states in particular the nature of M&A amendments as follows:
(a) Change the company’s name;(b) Increase, decrease or change the purposes, objectives, or undertakings of the company;(c) Redistribute the number of shares in class with the changing of absolute and relative characteristics of any class of shares;(d) Change the dividend payable on any class of shares;(e) Increase its capital by creation new class of shares with its absolute and relative characteristics is superior or inferior the existing class of shares;(f) Decrease its stated capital by reduce the par value of any class or series of shares or the authorized shares. The stated capital may not be reduced to less than one half (1/2) of its capital provided for in the articles. No reduction of capital shall occur until ninety days after the amendment has been filed with the Ministry of Commerce. If during that time there has been any objection by any creditor, whose debt is not disputed by the company, the creditor shall be paid in full before the reduction can take effect;(g) Change the duration of the existence of the company;(h) Change the Registered Office;(i) Change the quorum; and(j) Add any provision, which is authorized by this law to be included in the articles.
Amendment by Special Resolution
Article 236 of the LOCE states a company’s M&A shall be amended by special resolution and the holders of each class of shares, or series of shares, are entitled to vote separately as a class or series, when the proposal to amend the articles is for the purpose of:
(1) adding, changing or removing rights, privileges, restrictions attaching to their class or series of shares;(2) increasing or decreasing the maximum number of shares of their class or series of shares;(3) increasing the maximum number of authorized shares of a class or series that have rights or privileges equal or superior to their shares;(4) creating a new class of shares equal or superior to the shares of their class or series;(5) making any class of shares having rights or privileges less than or equal or superior to their shares;(6) reduce the stated capital account of their class or series of shares.
Even if the M&A state a certain class or series of shares are not entitled to vote, the class or series of shares is always entitled to vote separately as a class or series, on any amendment to the articles that would change directly or indirectly, or adversely affect any rights, privileges, restrictions and conditions attaching to their class or series of shares.
The voting power authorized under this Article may not be abolished, decreased or limited by the articles of incorporation or in any other fashion.
Amendment Procedures
Prakas No. 120 MOC/SM 2006 issued on June 20, 2006, states that after commercial registration for operating its business, a company may amend its M&A at any time. Amendments to the M&A can be made with respect to the above clauses and pursuant to the Law and the Statutes of a Company, shares can be transferred.
Furthermore, all amendments and share transfers as specified above must occur in accordance with Article 18 of the Law on Commercial Regulations and the Commercial Register. With respect to the transfer or sale of shares, a shareholder who is a transferor or seller of his/her shares must come to affix his/her signature and thumbprint directly in the presence of commercial register official to assure and be responsible for such documents of transfer or sale of shares that they are sufficient and correct without having any fraud.
A limited liability company may be created by filing a Memorandum and Articles of Incorporation (“M&A”) with the Director of Companies of the Ministry of Commerce. The Ministry of Commerce (the “MoC”) is very traditional. Every change from the standard format of M&A (provided by the MoC) will be carefully scrutinized. Even changes of the headings of the articles in the M&A may be ground for rejection.
Any substantive changes must fit within the approved format and sequences that is familiar to the MoC.
The official and controlling version of the M&A is the Khmer language version, although as a matter of custom the MoC permits the English language version to be filled at the same time as the Khmer version.
Required Information
Article 93 of the LOCE states the required contents to be stated in the M&A:
(a) The name of the company;
The M&A may be executed either through a private agreement or through a notary. The articles shall be signed or initialed by all the shareholders (LOCE Article 95).
Amendment of the M&A
The M&A may be amended by a Special Resolution of the shareholders. A limited liability company may amend its M&A at any time (LOCE Article 235) by a Special Resolution.
All documents relating to the amendment of the M&A shall be filed with the Director of Companies no later than 15 days after the special resolution was approved. The Director of Companies shall issue a certificate of amendment that fixes the dated thereof (LOCE Article 239 & 240).
The LOCE Article 238 states in particular the nature of M&A amendments as follows:
(a) Change the company’s name;(b) Increase, decrease or change the purposes, objectives, or undertakings of the company;(c) Redistribute the number of shares in class with the changing of absolute and relative characteristics of any class of shares;(d) Change the dividend payable on any class of shares;(e) Increase its capital by creation new class of shares with its absolute and relative characteristics is superior or inferior the existing class of shares;(f) Decrease its stated capital by reduce the par value of any class or series of shares or the authorized shares. The stated capital may not be reduced to less than one half (1/2) of its capital provided for in the articles. No reduction of capital shall occur until ninety days after the amendment has been filed with the Ministry of Commerce. If during that time there has been any objection by any creditor, whose debt is not disputed by the company, the creditor shall be paid in full before the reduction can take effect;(g) Change the duration of the existence of the company;(h) Change the Registered Office;(i) Change the quorum; and(j) Add any provision, which is authorized by this law to be included in the articles.
Amendment by Special Resolution
Article 236 of the LOCE states a company’s M&A shall be amended by special resolution and the holders of each class of shares, or series of shares, are entitled to vote separately as a class or series, when the proposal to amend the articles is for the purpose of:
(1) adding, changing or removing rights, privileges, restrictions attaching to their class or series of shares;(2) increasing or decreasing the maximum number of shares of their class or series of shares;(3) increasing the maximum number of authorized shares of a class or series that have rights or privileges equal or superior to their shares;(4) creating a new class of shares equal or superior to the shares of their class or series;(5) making any class of shares having rights or privileges less than or equal or superior to their shares;(6) reduce the stated capital account of their class or series of shares.
Even if the M&A state a certain class or series of shares are not entitled to vote, the class or series of shares is always entitled to vote separately as a class or series, on any amendment to the articles that would change directly or indirectly, or adversely affect any rights, privileges, restrictions and conditions attaching to their class or series of shares.
The voting power authorized under this Article may not be abolished, decreased or limited by the articles of incorporation or in any other fashion.
Amendment Procedures
Prakas No. 120 MOC/SM 2006 issued on June 20, 2006, states that after commercial registration for operating its business, a company may amend its M&A at any time. Amendments to the M&A can be made with respect to the above clauses and pursuant to the Law and the Statutes of a Company, shares can be transferred.