Marshall Islands Introduces New Business Regulations

The Marshall Islands has introduced several amendments to its business laws to enhance transparency and compliance, improve corporate governance, and provide more flexibility for companies operating in the region.

New Information Requirements for Bearer Shares

One of the key changes is the requirement for bearer shares to maintain an up-to-date record of all holders and beneficial owners. This includes:

• Names
• Addresses
• Nationalities
• Dates of birth
• Records of transfers, including:
  • Date of transfer
  • Details of new holders and beneficial owners

Penalty for Non-Compliance

Companies that fail to comply with these requirements face penalties, including:

• Fines not exceeding $50,000
• Revocation or cancellation of their formation documents

The deadline for compliance is November 9, 2018, for corporations incorporated prior to November 14, 2017.

Electronic Transmission and Signatures

The amendments also allow for the use of electronically transmitted signatures on instruments authorized by Marshall Islands law, including:

• Shareholder ballot submissions
• Notice of meetings
• Consent to action without a meeting

Additional Changes

Other changes include:

• Formula-based share issuance: allows companies to determine the amount of consideration for shares using a predetermined formula.
• Partly paid shares: are now allowed, subject to call for the remainder of the consideration due.
• Corporations can renounce business opportunities in their articles of incorporation or by action of their board of directors.
• Public companies are exempt from dissenters’ rights in the sale of all or substantially all assets.

Key Takeaways

Companies operating in the Marshall Islands should take note of these changes and ensure compliance with the new requirements. Failure to do so may result in significant penalties and ramifications.