Cambodia

4 Chapter Corporate Law

    • Organ of corporation

      A corporation which was established in Cambodia should establish structures according to “Law on Commercial Enterprise” and “Law Bearing  Commercial Regulations and the Commercial Register”.  The scope of application  of “Law on Commercial Enterprise” is partnership, limited liability company and foreign corporation.

      Structure design for a limited liability company is composed of stockholder, auditor, and director.

       

    • Stockholder [general meeting of stockholders]

      The number of stockholders shouldbe more than one (1) but less than thirty (30) for private limited company. If the company has only one stockholder it is called single member limited company. There is no regulation for public limited company.

       

      There are 3 types of general meeting of stockholders, foundation meeting held within 1 year from date of establishment, regular general meeting held once a year, and extraordinary or special general meeting.

       

      Director will convene for regular general meeting and extraordinary general meeting in principle. It is possible for stockholders to convene if majority of them who have voting rights request to convene. Within 21 days, when the directors received the request from stockholders, general meeting should be held.

      Convocation notice should be issued 20days before the meeting and it will be sent to all stockholders, directors and auditors. On the convocation notice, the date, agenda, and venue of the meeting should be stated.

      Quorum required is usually attendance of shareholders who have majority of voting stock.

      Resolutions for general stockholder meetings are ordinary resolution and special resolution. Ordinary resolution is approved when  majority of stockholders with voting right shares voted for approval while special resolution is approved when two-thirds or more of stockholders with voting right shares voted for approval.

      Stockholder can set up an agent instead of him/herself.A written power of attorney  with stockholder’s signature and date is needed. Expiration date of power of attorney is one year upon signing up of the stockholder..

      Company should keep their business records. It includes minutes of general meeting, record of director or account record.

       

    • Director

      The number of director is more than one for private limited company and more than three for public limited company. There is no regulation regarding the required nationality and residence of the director, as long as he/she is 18 years old or over and has  has the legal capacity, he/she can be director. There are no other requirements unless otherwise stated in the articles of incorporation. The term of office is 2 years and re-appointment is possible.

      Stockholders who have voting right should choose the director at general meeting of stockholders.

      In case otherwise stated in the articles of incorporation, director can decide for his compensation and receive approval from stockholders.

      Directors meeting has to be held at least once in three months. With attendees of more than one-third of all the directors, directors meeting  will be held. Directors meeting has to be held in Cambodia in principle. The resolution to be passed is voted by majority of favor of the directors.
       

    • Auditor

      Limited liability company should establish an auditor in principle, but private limited company doesn’t have  establish one.

      Appointment of auditor is done by ordinal resolution in general meeting of stockholders. Auditor’s office term is one year, but it will be continued until  next auditor will be appointed. By ordinal resolution in the general meeting of stockholders, auditor will be dismissed. At that time, new auditor will be appointed.

      Auditor’s compensation is decided by ordinal resolution.

      Auditor should conduct investigation for audit report to be submitted to the directors.

    • Stocks

       Limited liability company can issue common stock and class shares by stipulation in the articles of incorporation. When you issue class shares you need to stipulate the rights, limit, and the condition in the articles of incorporation.

      Stock

      Contents

      Common stock

      ・vote at general meeting of stockholders

      ・right to receive dividends

      ・right to receive residual assets during company dissolution

      Class shares

      Convertible stock

      Preferred stock

      Redemption stock

      Transfer restricted stock

      Stocks can be issued by the decision of the directors. Unless there is no stipulation in the articles of incorporation, you should issue at least 1,000 stocks and its nominal value should be 4,000 Riel or more per stock.

      All stocks have rights of having share certificate. Company name, name of issuer, stock number, or type of stock should be on the share certificate.

      Corporation should manage the stockholders by type. On the stockholders’ registry the followings should be listed: name and address, number of stocks each stockholder has, and the date of acquisition.

      By getting approval of a special resolution, company can increase and reduce the capital.

      According to the articles of incorporation, you can acquire treasury stock. However, there are limitations in acquiring  stock. They are listed in the following cases:

      In case the company obligation cannot be paid after the payment of consideration for treasury stock acquisition and, in case the net realizable value of the asset does not exceed the liability amount.

      Company can distribute dividends from surplus. The decision making and amount of dividend is decided at the directors’ meeting. However it will have efficacy when  approved at general meeting of stockholders. When sufficient assets cannot be secured, company cannot declare dividend.