Mauritius types of company

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 authorised capital is MR 25,000, and annual registration fees vary between MR 4,000 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 are as follows:

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 Actl, 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 recognises 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 notarised.

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 insure 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.

Mauritius Private Company Limited by Shares

A private company is one which says it is private in its constitution and which restricts the transfer of its shares, which cannot be offered to the public; there is a minimum of 1 and a maximum of 25 members.

A private company can be exempt or non-exempt: exempt companies are those which have issued share capital and reserves below MR 1m and turnover below MR 2m. 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 Companies Act. (Exempt status is not available to offshore companies other than through the GBC2 - old International Company - form).

Mauritius Company Limited by Guarantee

The Company Limited by Guarantee (the hybrid Company Limited by Guarantee and Having Shares is no longer permitted), may be used only for a non-profit organisation. The liability of the members is limited to the amount they have undertaken to contribute to the company; there must be a minimum of MR 5,000 of guarantees.

Mauritius Public Company Limited by Shares

A public company is defined as one which is not a private company and which has at the end of its name the words 'Public Limited Company' or 'P.L.C.'. A public company must have a minimum of two members.

Offshore Legal and Tax Regimes for further details of the taxation regime for offshore companies. They pay an annual registration fee of $1,700 ($2,067 in the first year). Annual accounts must be filed, but the GBC1 company is exempted from the need to file an annual return.

GBC1 companies are suited to public financial operations such as fund management; for holding private assets, a GBC2 (International) Company or an Offshore Trust (see below) is more suitable.

Mauritius GBC2 (International Company)

The Global Business Company Category 2 (GBC2) replaced the old International Company under the Companies Act 2001. The International Company (IC) is the Mauritian equivalent of the International Business Company found in many offshore jurisdictions. It was established by the International Companies Act 1994, but is now constituted under the Companies Act 2001. The GBC2 is ideal for international trading, invoicing, licensing, international consultancy business and is often used to hold investments or other assets.

An GBC2 can take any of the forms permitted under the Companies Act 1984 (now the Companies Act 2001). Unlike the Offshore Company, the IC used to be able to issue bearer shares, but this is no longer permitted - however, in other respects the share structure can be flexible:

There is no minimum capital requirement although at least one share must be issued and paid up;

Registered shares and a variety of shares such as preferred, redeemable, and fractional are allowed;

Shares may be issued with or without par value;

Redeemable preference shares may be issued;

Only one shareholder and one director are required.

However, a GBC2 is treated as non-resident, cannot get the benefit of Mauritius' double tax treaties, and cannot operate in the Free Port. Mauritian citizens are not permitted to own shares in a GBC2. There are a number of other restrictions on GBC2s; they may not:

Raise capital by public subscription;

Carry on banking or insurance business;

Own real property in Mauritius;

Own or manage a collective investment fund;

Provide nominee services, or provide trustee services to more than three trusts.

GBC2 companies are not required to file annual accounts, and confidentiality may be preserved through the use of nominee directors and shareholders.

See Offshore Legal and Tax Regimes for further details of the taxation regime for international companies. They pay annual licensing and registration fees totalling $200.

Mauritius Limited Life Company

The Limited Life Company (LLC) was introduced by the Offshore Business Activities (Companies) Regulations 1995. This form is not available to onshore companies, but only to GBC 1 and 2 Companies.

The LLC allows the dissolution of the company on the occurrence of specified events, and has the nature of a partnership under US tax law. It is often used for private fund management or investment purposes.

The Companies Act 2001 provides for LLCs, unlike the 1984 Act.

A Global Business Company may apply to the Registrar of Companies either at the time of incorporation, continuation or after to be designated as an LLC.

Mauritius General Partnership

The general partnership in Mauritius is governed by the Code de Commerce and is known as the Societe en Nom Collectif. Partners may be individuals or companies. In a general partnership, a partner's liability is unlimited. Under the Code de Commerce Amendment Act 1985, general partnerships can acquire offshore status.

The Finance Act 1996 further improved the situation of offshore partnerships, allowing them the benefit of Mauritius' double tax treaties.

Mauritius Limited Partnership

The limited partnership in Mauritius is governed by the Code de Commerce and is known as the Societe en Commandite Simple. Partners may be individuals or companies. A limited partnership consists of one or more general partners with unlimited liability, and one or more limited partners, who are liable only to the extent of their capital contributions. Under the Code de Commerce Amendment Act 1985, limited partnerships can acquire offshore status.

The Finance Act 1996 further improved the situation of offshore partnerships, allowing them the benefit of Mauritius' double tax treaties.

Mauritius Sole Prorietorship

The status of sole trader is widely used in Mauritius, and is governed by the Code de Commerce. The business name of a sole trader, who has unlimited responsibility for his liabilities, must be registered with the Registrar of Companies, if it is other than the name of the sole trader. An annual return must be submitted to the Commissioner of Income Tax.

Mauritius Trusts

Mauritius Offshore Trusts are set up under the Trusts Act 2001 (they used to fall under the Offshore Trusts Act 1992); the regime for trusts is based on English common law. Offshore trusts are subject to the following conditions: The settlor must not at any time be a resident of Mauritius, although an offshore company can be a settlor;

At least one trustee must be resident in Mauritius; offshore companies (which are deemed to be resident) can be trustees if authorised by MOBAA; Trust property must not include real property situated in Mauritius. Trusts pay a one-time registration fee of $250; there are no disclosure or annual reporting requirements.

The Trusts Act 2001 incorporates a thorough modernisation of Mauritian trust law which is fully described in Offshore Law.