Investment Ministry issues amendments to Companies Act regs
LEGISLATION WATCH- The Investment Ministry issued amendments to the executive regulations of the Companies Act on Friday, minister Sahar Nasr said in a statement. As we noted last month, the amendments are the most sweeping changes to the regs of the Companies Act in 35 years, with 51 articles being amended. Amendments to the law itself, signed into law by President Abdel Fattah El Sisi last month, allow the formation of single-shareholder limited liability companies and give measures of protection to companies against whistleblowers. Key features of the regs changes include:
- Banning companies from holding onto treasury stocks for over a year. After the year is out, companies must either divest the shares or distribute them to employees as part of a profit-sharing mechanism;
- Limiting share buybacks to 10% of the company’s shares;
- Allowing a weighted voting system when shareholders vote on board members;
- Shareholders can now vote in board elections electronically;
- Facilitating spinning off corporations, by allowing the company greater flexibility in dividing assets and shares;
- Barring sole-proprietorship companies from establishing subsidiaries that are also sole proprietorships.