On 1 April 2024, the reporting framework for beneficial ownership of companies came into force in Malaysia through the following:

• amendment to the Companies Act 2016 (CA 2016)
• (1) Guidelines for the Reporting Framework for Beneficial Ownership of Companies (BO Guidelines); and (2) case studies issued by the Companies Commission of Malaysia (CCM).

What does this mean for M&A transactions in Malaysia?

1. Due Diligence

The BO Guidelines provide that beneficial ownership is not publicly available. Companies must grant access to this information to, among others, persons authorised by the beneficial owner, with access limited to information related to that specific beneficial owner.

In the context of due diligence, authorisation from the beneficial owner is required for disclosure of beneficial ownership information relating to that beneficial owner. The due diligence requisition list should include requests for beneficial ownership documents including:

-register of beneficial owners,

-notices sent under s. 60C of the CA 2016 by the target companies to require the persons specified in s. 60C to disclose beneficial ownership information

-filings with the CCM.

2. Completion Steps

Upon completion of M&A transactions involving the transfer of shares, the target companies should:

• take reasonable measures specified in paragraph 21 of the BO Guidelines to identify beneficial owners, including sending notices to the relevant persons pursuant to s.60C
• update the register of beneficial owners within 14 days from the date on which information is received (s. 60C(4))
• lodge a notice on any change to the particulars in the register of beneficial owners with the CCM within 14 days from the date of the change is recorded in the register of beneficial owners of the companies (s. 60B(4))

#malaysiancorporatelawyer

The information in this post is intended only to provide general information and does not constitute any legal opinion or professional advice.

This post was first posted on LinkedIn on 30 May 2024.