Can You Rely Entirely on CCM Search?
“CCM search has the information.” This was the suggestion given to me as a quick way to complete the corporate information aspect of legal due diligence. There are situations where a search from the Companies Commission of Malaysia (CCM) may be sufficient: where the client understands the limitations of a …
Have Shares Actually Been Transferred?
This question comes up often in share transfers. The register of members, not the share certificate, is proof of legal ownership of shares. In fact, issuance of share certificate is not mandatory unless the company’s constitution provides for it or a shareholder requests it. In a recent share transfer I …
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 …
Legal Requirements for Allotment of Shares in Malaysia
M&A transactions often involve allotment of shares in a company. Understanding the legal requirements for allotment of shares is essential to ensure compliance and avoid potential disputes over the validity of allotment of shares. The following are the key steps for allotment of shares under the Companies Act 2016 (CA) …
What powers does a shareholder have after acquiring a minority stake in a company?
This question often arises when a purchaser considers acquiring a minority stake in a private company. Under the Companies Act 2016, shareholders with a minority stake in a private company have the following rights and powers: Minority stake Rights and powers At least 5% of the total voting rights …
What should your company consider before implementing a share award scheme?
1. Eligibility of employees Is the scheme limited to employees of the holding company or includes its subsidiaries? What are the eligibility requirements of employees who will be considered for the scheme? (e.g. at least 18 years old, confirmed full time employee, minimum length of service and performance metrics). 2. …
Frequently referred to provisions in Companies Act for corporate transactions
When I tell people that I’m a lawyer, they often respond with, “Oh, you must have a good memory. That’s so much to memorise.” I believe it’s more important to understand and apply the law rather than memorise it. After all, you can always refer to online resources or statute …
Beneficial ownership reporting framework: What does this mean for M&A transactions in Malaysia?
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 …
How difficult is it to draft and review resolutions?
Not that difficult if you are preparing from a template and blissfully unaware of what you don’t know. Not that difficult if you know which provisions in the Companies Act 2016 of Malaysia apply. Drafting and reviewing resolutions is an integral part of corporate transactions. It’s crucial to have a …
Do regulators really impose penalty for “administrative breach” of the Companies Act in Malaysia?
When non-compliance with laws is discovered during legal due diligence, clients often ask about potential penalties. Some common instances of non-compliance encountered in legal due diligence include administrative aspects of running a company, such as failure to: lodge statutory forms with the Companies Commission of Malaysia within the prescribed period …