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July 13, 2020

Shareholders of a Public Company

Myanmar has now opened up its economy, inviting foreign investors to invest in Myanmar. It has also promised earnestly not to nationalize such foreign capitals. In order to utilize the country’s natural resources to bring about the mutual benefits for the host country and the investor countries as well, so our country have to give an attractive incentive to the potential investors, thus we can soon witness more direct foreign investments have been increased day by day in such a momentum so that newly set up industries in various special economic zones to go along with our improved commerce and banking systems, modern communications and internet technologies and infrastructure facilities, so much so even the sky-line of Yangon City now has been sprung up with many more different high-rise and modern buildings.
Myanmar has awaken from nearly forty-five years of self-made isolation policy to become a democratically free thinking and unrestrained government so that all citizens can now express their long hidden true desire and idea on all matters. With the great influx of foreign investors and repatriate businessmen to Myanmar, all eagerly trying to set up companies, many are public companies totaling about 150 in number now, doing all kinds of trading and commerce and industries activities for the development and transformation into a modern nation of our lagging behind country Myanmar which following the tails of her neighboring countries.
At first the Myanmar commercial atmosphere of transitional period was in a scramble state. With only the [Burma Companies Act—1914] to prop up and to help the Myanmar Companies Registration Office under the then Ministry of Trade which required that all companies in existence must conduct business in accordance with the though not much helpful, obsolete Burma Companies Act — 1914. The following selected Sections shall give as reference to companies on their parts to carry responsibilities  for the shareholders, debenture stockholders.
Section-25 of Burma Companies Act-1914, stated
(1) Every company shall send to every member at his request and within fourteen days thereof, on payment of one rupee or such less sum as the company may prescribe, a copy of the Memorandum and of the Articles (if any).
(2) If the company makes default in complying with the requirements of this Section, it shall be liable for each offence to a fine not exceeding ten rupees.
Section—108 of Burma Companies Act — 1914, stated
{1} Every country shall within three months after allotment of any of its shares , debentures or debenture stock, and within three months after  the registration of the transfer of any such shares, Debentures or debenture stock, complete and have ready for delivery the certificates of all shares, the debentures and the certificates of all debenture stock allotted or transferred, unless the certificates of  issue of the shares, debentures or debenture stock otherwise provide.
{2} if default is made in complying with requirements of this Section, the company and every officer of the company who is knowingly a party to the default, shall be liable  to fine not exceeding fifty rupees for every  day during which the default continues.
Any person, company as other institution can own at least one share of a public company. Shareholders are the company’s owners. They have a potential to profit if the company does well, but they have to face consequence when comes with the potential of a loss if the company does poorly. A shareholder may also be referred to as a stockholder. It is important to know that your right as a shareholder in a public company, you have certain rights pertaining to the equity investment.
A public company is owned by a large number of people, each of them owns anywhere from one share to thousands of shares in the company. The profits of the company are divided among the shareholders and paid to them as dividends. These dividends are the primary motivation for most shareholders in investing their money in the public company.
As we have studied Section- 25 of Burma Companies Act-1941, thereby stipulated, a shareholder by payment of a sum of money, he is entitled to receive a copy of Memorandum and Articles of Association of the company. In which the company has based on the Burma Companies Act-1914, describing a set of regulations for governing the working procedures of the company. From time to time, due to the present situation of the company, if needed to change any of the regulations in the Memorandum and Article of Association of the company. It can be done, basing on the concerning Sections of Burma Companies Act – 1914, a resolution which must be approved by the General Meeting of the company, in the meantime, it is required to file the  resolution of the meeting with the Directorate of Investment and Company Administration (DICA). Until and unless a confirmation order is being received from (DICA) then the company would be able to put the new regulations in place of the old ones and there after the newly changed regulations would be set in force in accordance with the law completely at last.
As stated from above, all shareholders are far more interested in the activities of the public company which they have put in their money and especially those pensioners with their long time saved up money, surely want to take part in running the show of managing the operation of public company, in order to be able to vote on company matters, to vote for the appointment of directors, to inspect the company’s books of accounts, to sue for misconducts of directors. But they cannot themselves usurp the powers which by the article vested in the directors, anymore then the directors can usurp the power vested in the articles for the general Body of shareholders. So, to be fair to all shareholders of the public company and the directors, transparency is matter most to be embraced Board in the heart of shareholders and the Board of Directors of the public company. It is the duty of the Board (Section-25 of Burma Companies Act) to send every shareholder a copy of the Memorandum and the Articles of Association, so that all shareholders know completely the rights and limitations for shareholders in regard to the company. (Also eagerly looking forward to the early publication of the new Myanmar Companies Act).


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