Foreign Investment Compliance in Malaysia
In Malaysia, some sectors require a minimum level of local ownership. Recently, a foreign investor raised this concern with me, highlighting the importance of addressing ownership rules properly from the outset. Investors sometimes consider arrangements such as trust deeds, call options, or nominee structures for shares in companies to get …
Mistakes Founders Make that Show up in Due Diligence
When I conduct legal due diligence on a target company in M&A deals, certain issues keep appearing. They slow down the process, sometimes affect valuation, and always create unnecessary friction. 1. Contracts I often see contracts signed by founders in their personal capacity, or by other companies they own, when …
Preference Shares: A Path Through Malaysia’s Equity Restrictions
Regulatory equity restrictions don’t always mean “no entry” for investors in Malaysia. If you’re restricted from holding ordinary shares in certain sectors due to regulatory policy, preference shares may offer a practical alternative. You may want to consider preference shares if: 1. The sector has no restrictions on preference shares. This …
Does family-owned company require formal shareholders’ approval for issuance of shares?
“This is my family-owned company. Do we still need formal shareholders’ approval to issue shares?” Yes. Under section 75 of the Companies Act 2016, directors cannot exercise their power to allot shares without prior shareholders’ approval. This is a legal requirement even if all the shareholders are family members. Skipping …
Pay for proper legal advice when it comes to shareholders agreement
Most people I know are reluctant to pay for proper legal advice when it comes to shareholders’ agreements. Many assume shareholders’ agreements are just templates. However, in practice, especially in M&A or fundraising, these agreements must align with the Companies Act 2016 and other relevant regulatory requirements. Otherwise, what is …
Do I write my own LinkedIn posts?
People sometimes ask if I write my own LinkedIn posts. Yes, every post. Most of what I share comes from questions I encounter in my work, points of law that I’m curious about or articles I’ve read recently. Writing helps me clarify my thinking, reveal what I thought I knew …
Should departing directors and employees keep their shares?
In closely held companies, especially startups, founder-led businesses, and family-owned businesses, control over the shareholder base is critical. One common concern is that individuals who are no longer actively involved, such as former directors or employees, may continue to influence major decisions through their shareholding. This is where compulsory transfer …
How to avoid a deadlock when two shareholders cannot agree on the future of the company?
There are two shareholders. One shareholder wants to undertake an initial public offering (IPO) and listing of the company, while the other doesn’t. Without the right legal structure, this kind of disagreement can slow down the company or create a fallout between shareholders. The following are two practical legal tools …
Are you passionate about what you do?
“Are you passionate about what you do?” I was asked. Honestly? It’s one of those questions I have always struggled to answer. A million thoughts ran through my mind. Who can be passionate about what they do 24/7? Define “passionate”. Is it the kind that lights you up every morning? …
Plan the exit before investing as a shareholder
When investing in a company, whether as a founder, co-founder, or strategic investor, most people focus on the business plan, the valuation and the growth potential. One question that is often overlooked: How can a shareholder exit this company, and under what terms? Share transfers and shareholder exits often happen …