Can shareholder be director of a company in Cambodia?

Under the Law on Commercial Enterprises which was promulgated in 2005, there is no provision restricting shareholder from being director or member of the board of directors of a company. Accordingly, one person can be a shareholder and a director of the same company at the same time.

Regarding qualification of director, Article 120 of the Law on Commercial Enterprises reads:

Any legally competent natural person over eighteen (18) years old may serve as a director or officer of a company. A director is not required to be a shareholder or to meet any other qualification unless the articles or bylaws impose specific qualifications on them.

According to above provision, a director is a natural person who is a shareholder of the company or other person who is not a shareholder of the company.

For readers who are not familiar with company structure, below is a brief the roles of shareholders and directors in a company:

Shareholder is a natural person or legal person who forms a company. Shareholders own shares of the company, which determine rights and obligations of the holders. Shareholders invest funds into the company, and in return they get dividend.

Director is a natural person who is appointed by the shareholder. Board of directors manage the business and affairs of the company, including but not limited to appointment and dismissal of all managers of the company, decision on the rights and powers of the managers, decision on borrowing money, issuance of share and securities and declare of dividend. Director receives remunerations and benefits as decided by the shareholder.

Please note that this article is not legal opinion or advice.

Categories Commercial Laws

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