Conventus Law / Hogan Lovells: Mongolia – Revised Company Law

On 6 October 2011, the Parliament of Mongolia, the State Great Khural, adopted significant revisions to the Company Law of Mongolia (the “Revised Company Law” or “RCL”). The RCL came into effect on 21 November 2011, when the former Company Law ceased to be effective. The key features of the Revised Company Law are: – broadening of the personal liability of governing persons; – introduction of administrative sanctions for non-compliance; – stricter corporate governance rules; – changes in “major” and “conflict of interest” transactions provisions; – abolition of minimum capital requirements for companies; – introduction of closed joint venture companies. The enactment of the RCL is a step towards the government’s aim of bringing Mongolian corporate governance standards closer to those found in more developed jurisdictions. Nevertheless, the law remains under-developed by comparison. The lack of precision in the drafting will cause some uncertainly until market norms emerge, and it introduces some unexpected pitfalls that have the potential to deter rather than encourage trade and investment. To read the full article, click hereMongolia – Revised Company Law

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