GAFI Allows Companies to Submit Com

On 12 February 2019, the General Authority for Investment and Free Zones (“GAFI”) issued a decision allowing companies to submit (and maintain) their commercial records, including board and general assembly minutes, to GAFI for ratification in electronic form. The decision goes a further step and requires other relevant authorities to accept records submitted by a company in electronic form. GAFI also issued a decision on 17 February 2019 mandating electronic or bank payment for all of the services it provides through the Investor Services Centre.

Background

Both the Commercial Code[1] – which regulates commercial activity as well as certain types of companies and partnerships – and the Companies Law – regulating joint stock, limited liability, one-person companies, and partnerships limited by shares – require merchants and companies to hold different commercial records such as accounting books, and board and general assembly minutes. Historically these records were maintained in physical books that said laws require be submitted to the relevant regulatory body for review and ratification. In addition, the Investment Law and its Executive Regulations have mandated that GAFI provides its post establishment services – including record ratification – in electronic format once such becomes possible, and to maintain electronic databases that are tied to similar networks at the relevant public authorities that provide services for different types of companies. GAFI’s recent decision No. 96 of 2019 (the “Decision”)[2] cites the Commercial Code, the Companies Law, and the Investment Law. It furthermore refers to a Prime Ministerial Decree, albeit the latter is not available in the number that was cited.[3]

GAFI’s Decision

The Decision allows companies to replace physical commercial records that the company is required to maintain with electronic ones, and states that the relevant public bodies must then accept these electronic records in lieu of the paper ones. Companies that elect to use electronic records must obtain GAFI’s prior approval of the electronic systems used for record maintaining through applying to GAFI’s Investor Services Centre, and they must use electronic signature according to the Electronic Signature Law.[4] Furthermore, the Decision states that GAFI is to undertake the provision of the service of creating the aforementioned electronic commercial books and records, determine the format of said records, the data that they must contain, and the manner and timelines for entering the data electronically. Said records will also be tied to GAFI’s electronic database, and the databases of other relevant authorities. On a somewhat related note, GAFI issued decision No. 123 of 2019[5] mandating that all payments made through its Investor Services Centre be made electronically or through GAFI’s bank accounts. This is to apply starting 20 February 2019.   [1] Commercial Law No. 17/1999, Official Gazette, Issue No. 19 (bis), 17 May 1999. [2] GAFI Decision No. 96/2019 on the requirement of holding commercial records by companies in accordance with Law No. 159/1981 and Law No. 72/2017 and consistent with the services provided by GAFI and the commitment to provide post establishment services in electronic format. [3] GAFI’s Decision cites Prime Ministerial Decree No. 1453/2018. [4] Law No. 15/2004 regulating electronic signature and establishing the Information Technology Industry Development Agency, Official Gazette, Issue No. 17 (cont.) (d), 22 April 2004. [5] GAFI Decision No. 123/2019 on the suspension of cash transactions at the main Investor Services Centre as of 20 February 2018.