Maldives' New Association Regulation In Brief
On August 27, 2024, the Maldives introduced a new Association Regulation. This regulation outline the procedures for forming, operating, and dissolving civil organizations in the Maldives, as governed by the Association Act (3/2022).
Key highlights of the new regulation are:
Formation, Rights, and Legal Status
Permitted Activities: The regulation clearly defines the activities that organizations can undertake, ranging from business activities to promoting ideologies (excluding political movements), advocating for legal changes, and engaging in rural development.
Legal Status: Organizations are recognized as private entities, with asset ownership residing with the organization itself. However, executive committee members can be held personally liable for rule violations.
Organizational Types and Characteristics
Characteristics: An organization must involve multiple parties, operate without profit motives, function independently, and focus on empowering society through its services.
Types: The regulation recognizes various organizational forms, including clubs, associations, foundations, federations, charities, and skilled worker associations.
Role of the Registrar
Duties: The Registrar plays a pivotal role in facilitating the formation and management of organizations. Their duties include enforcing laws, addressing complaints, assessing organizational efforts, and ensuring compliance with annual reporting and auditing requirements.
Advisory Committee: An 11-member committee advises the Registrar, representing diverse organizational types.
Registration and Naming
Registration Process: The registration process involves submitting necessary documents to the Registrar, who must decide on the registration within 30 days.
Foreign Organizations: Foreign organizations must register as a Maldives Branch after obtaining necessary permissions.
Naming: Organizations must adhere to naming requirements, ensuring uniqueness and relevance to their purpose. Renaming processes are also outlined.
Management and Operations
Basic Rules: Organizations must have well-defined basic rules, outlining aspects such as membership fees, fundraising procedures, and other operational details.
Membership and Executive Committee: The regulation specifies membership criteria, executive committee composition and eligibility, and procedures for elections and general meetings.
Annual Reports and Accounts: Organizations must submit annual reports, including financial statements, to the Registrar.
Financial Affairs and Mergers
Financial Management: The regulation covers budgeting, bank accounts, business operations, loans, and auditing requirements.
Mergers: Organizations can merge by following the prescribed procedures, resulting in the creation of a new entity.
Dissolution
Voluntary Dissolution: Organizations can voluntarily dissolve through a members' resolution.
Dissolution by Legal Grounds: A court can dissolve an organization if it operates illegally, violates objectives, or faces executive committee dysfunction.
Organizations must adhere to these regulations to ensure legal compliance and avoid penalties.
This is a brief overview of the new Association Regulation. If you have any questions or require assistance with these new regulations, don't hesitate to contact our law firm. For in-depth legal advice tailored to your organization's specific needs, please reach out to our experienced team.
