Law governing corporations in Palau was recently upgraded with the signing of a bill into law, RPPL 10-11, Corporations Registry.
This law repeals current corporations law and “replaces the law with modernized version necessary to ensure good governance and lawful business practices” according to President Whipps Jr.’s transmittal letter accompanying the signed law.
The law was signed on September 29th but will take effect a year from its effective date to allow for the transition period.
“It is good to see it finally passed. It has come before us before when we were in the Senate before and we’ve discussed it but now it finally became law. We know it is a complex law, it is for an average person to understand. That is why we depend on experts and lawyers to assist put it together and understand it. If
it has limitations, we can always improve but the most important is that it’s moving forward, we are making progress,” expressed Whipps at this week’s press conference.
The law regulates corporations in Palau, both domestic and international as well as for-profit and not-for-profit corporations.
The proposal to improve corporations’ law has been proposed many times during different administrations but this time it finally passed OEK. It was also introduced during the last administration but didn’t pass OEK before the term ended.
With assistance from Asian Development Bank, Financial Investigations Unit, Attorney General’s Office, and legal counsels of both houses of OEK, they were able to adapt and modify American Bar ssociation’s Model Corporations Law to fit the “needs, capacity and governance of Palau.”