The most recent amendment of the Macau Commercial Code, implemented by Law 16/2009, introduced the possibility of wider use of electronic means in both the management of a company and its working processes. Nine years after the entry into force of the code,(1) the government decided to review and improve it in regard to new business needs arising from the economic development of the Macau Special Administrative Region (MSAR).
The revision aimed to:
- promote flexibility in running a company;
- increase company autonomy;
- promote the use of modern information technology;
- improve the rules of control over companies; and
- remove provisions requiring the double storage of documents.
This update analyses the amendments related to the use of information technology, which have improved communications between the company and its shareholders, increased their participation in the day-to-day business and allowed for the storage of company information in electronic format.
In order to implement and encourage the use of information technology in corporate law, the legislature had to modify and add several provisions to the code. The main changes were as follows.
Acceptance of electronic documents and signatures
Influenced by Law 5/2005, which approved the legal regime for electronic documents and signatures, new Article 4-A of the code provides that an electronic document or an electronic signature has the same legal value as any legal act or signature in written form. As long as electronic documents or signatures fulfil the requirements of the applicable regulations, they will be accepted without restriction.
Document storage process
In the previous version of Article 47 of the code, commercial entrepreneurs were allowed to make microfilms only of the documents that registered their commercial bookkeeping; such microfilms were considered to replace the original documents for all purposes (legal or otherwise). Under Law 16/2009, commercial entrepreneurs could also convert those documents into electronic format, which was accepted as the original for all legal purposes and effects. With this in mind, Paragraphs 3 and 4 were added to Article 49 of the code.
Article 49(3) determines that documents can be kept in electronic format provided that:
- this method of storage respects the principles of organised accounting;
- the information stored is accessible during the compulsory conservation period; and
- the information is always accessible to be read or reproduced, using means made available by the entrepreneur.
Article 49(4) determines that the procedures mentioned in the article will be regulated by complementary law.
A commercial entrepreneur must keep books, correspondence, documentation and all other items which register the exercise of its enterprise in order. In addition, since these changes, commercial entrepreneurs must keep their records for 10 years after the last entry made in the books.
Communications between company and shareholders
Article 210 of the code, which deals with a company's communications with its shareholders, has been modified and extended. Previously, it provided that the communication of all company acts of which shareholders should be personally informed must be done through registered letters sent to each shareholder's mailing address. After the amendments, and unless the articles of association state otherwise, as long as the shareholders have consented in advance, communications that previously had to be made by registered mail can be replaced by an electronic document sent to the shareholders' electronic addresses as available in the company records. Furthermore, the company is now responsible for the security of such communications.
Therefore, communication between a company and its shareholders may now be carried out through either conventional mail or email. Communications from shareholders to the company that were previously sent by post can now also be sent in an electronic document to the company's email address.
General meetings
Before the amendments came into force, the notice of a general meeting had to contain, in addition to any specific formal content mentioned in Article 222(1) of the code, reference to any documents that were available for consultation by shareholders at the company's registered office. Now, Article 222(2) gives the company another option: shareholders may access such documentation on the company's website, provided that the relevant articles of association provide for such option.
On the other hand, the new Article 222(3) introduced an important change relating to the place where the shareholders' and other social bodies' meetings shall take place. In the previous version of this paragraph, the rule was that meetings should take place solely in the registered office of the company or, if the chairing committee of the general meeting deemed convenient, in any other place within the MSAR, provided that the latter was properly identified in the meeting notice. The amendments have now added further options for company meetings. Article 222(3)(b) allows for general meetings to take place outside the MSAR if stipulated by unanimous agreement of the shareholders, while Article 222(3)(c) allows meetings take place virtually using information technology. This rule also applies to the administration (ie, the directors) and the supervision board.
This amendment represents a major step in the governance of Macau companies. However, should a corporation wish to hold a meeting virtually, two legal requirements must be fulfilled:
- The articles of association must allow the use of information technology; and
- The authenticity of the declarations and the accuracy and security of the communications must be assured.
Records and accounts
With this legislative review, record and accounting books may be available on the Internet, provided that the articles of association of the company expressly permit it.
The changes introduced by Law 16/2009 have replaced the previous strict rules and opened up new possibilities in response to the economic development of the MSAR over the past decade, especially since the opening of the gaming industry to foreign investments (now celebrating its tenth anniversary). They represent a positive step forward in the modernisation of MSAR corporate law, bringing further credibility to the commercial system.
For further information on this topic please contact Pedro Cortés or Daniel da Silva e Melo at Rato Ling Vong Lei & Cortés Advogados by telephone (+853 2856 2322), fax (+853 2858 0991) or email ([email protected] or [email protected]).
Endnotes
(1) Approved by Decree-Law 44/99/M, as amended by Law 6/2000.