Collective companies and limited partnerships will cease to exist in Timor-Leste (East Timor) as of 14 September 2018 and will be required to decide whether to be transformed into a limited liability company or a joint stock company under Law No. 10/2017 of 17 May, which approved the new Companies Law.
The Regional Coordination of Legis-PALOP+TL said that this legal obligation will not entail any cost to the companies, as registration for this transformation will be free of charge. The alternative for the companies that do not meet this obligation will be their dissolution, according to the new Law.
All registered collective companies and registered partnerships that have not met the processing obligation shall be officially declared dissolved by the Registrar as of 14 December 2018 and shall incur costs.
Under penalty of having their rights as a shareholder suspended, with their profits retained, Law No. 10/2017 also requires holders of bearer shares, or their successors, to deliver them to the issuer from 14 September of this year, requesting that these securities representing bearer shares be converted into registered securities.
After a year later, i.e. from 14 September 2019, the securities representing unconverted bearer shares are deemed to have been destroyed and the retained earnings will be converted into a free reserve.
Law No. 10/2017, which repealed the former Companies Law, approved by Law no. 4/2004, of 21 April, also determined a set of prohibitions and obligations in force as of September 14, 2017, notably a ban on issuing bearer shares or converting securities representing registered shares into bearer securities. (macauhub)