A couple of weeks ago an expat friend who went through the process of forming a Mongolian business venture around the end of 2011 contacted us. He had heard that Mongolia’s State Registration Office (“SRO”), where all foreign and domestic companies must go to officially register their companies, was working on a new format for company charters. He was worried that his would need to be replaced.
I was able to confirm with one of my contacts at the Foreign Investment and Foreign Trade Agency (FIFTA), who are responsible for supporting and overseeing the activities of foreign businesses in Mongolia, that the SRO is indeed working on a model format for a charter, but that existing charters that conform to Mongolia’s October 6, 2011 Revised Company Law would not require an update.
Here is the problem. According to my FIFTA contact, some charters filed after the effective date of the new Company Law were based on the old model charter, and therefore may not comply with the new language of the Company Law. In other words, company charters that the SRO allowed to be filed in 2011 may very well be deemed unacceptable in 2012.
This means that now is a particularly good time to review your Mongolian company’s charter to make sure it fully complies with the requirements of the new Company Law, as revised. When you do this, you might as well also consider how your business might evolve in the future and make any necessary changes to your charter to reflect that.