Hon’ble Minister for Economic Affairs launched Single Window Company Registry System on May 14, 2020.
The Ministry of Economic Affairs with support from World Bank introduced an electronic Online Registry system for Companies since April, 2019. This Registry system is now upgraded and integrated with various electronic systems of the related government agencies who are involved in starting business procedure in Bhutan. The system features three modules namely registry module, change module and compliance module to facilitate both electronic incorporation of Companies and online filing of statutory documents post registration. The upgraded system has the benefit of cutting down turnaround time and costs while incorporating a Company, seeking approvals for change in company’s records, information and availing statutory services. It also enables the Regulatory Authority to monitor Companies on-site with electronic handle to input compliance record for each Company on a real -time basis.
The reform actions can be explained under two Doing business indicators, as follows:
A. Legal and electronic registry reforms under ‘Starting a Business’ procedure:
1) Single Window Registry System (SWRS) has been successfully tested and is now fully operational by merging four different application forms namely; name reservation, company incorporation, security clearance and online fee payment into single registry system.
2) The requirement to make a company seal has been eliminated as prescribed under sections 226 & 227 of Companies Act, 2016. All the government agencies, financial Institutions, INGOs and CSOs in Bhutan, are hereby advised to allow LLCs to sign any documents using joint signatory of its board directors and/or management.
3) The opening of a Bank account by an LLC shall, henceforth be an ex-post procedure for starting a business. It shall be pursued subsequent to the issuance of a certificate of incorporation by Registrar of Companies under Companies Act.
B. Legal reforms for “Protecting of Minority Investors”:
1) Minority shareholder protection against defaulting directors are provided for under sections 167 through section 174 of Companies Act and claims for damages due to unfair prejudice by the majority shareholders are provided for under sections 128 to 130 of Companies Act, 2016. The derivative suit is as defined in section 416 (15).
2) Primary responsibility to regulate and remedy the minority interest protection is established with Regulatory Authority under section 131 of Companies Act. There will be a dispute settlement body to hear and dispose minority interest protection cases in the first instance.
This initiative is part of the Royal Government’s steadfast commitment to improve the ease of doing business procedures in the country and the unstinted support of the donor agencies in the form of technical advice and financing support for software development.