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 …
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 …
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 …
Structuring shareholding in companies
Structuring shareholding affects shareholders’ control, rights and exit. The type of shares issued determines: · Who makes decisions · Who gets paid (and when) · Who gets what rights Below is a concise overview of two type of shares and how they serve different purposes: Ordinary Shares The most commonly issued type of …
Getting into the details to make a deal work
A big part of my role as a corporate lawyer has been listening to clients explain the commercial terms they want in their deals. The next step is asking the right questions that make those terms work in the real world. Sometimes the parties have a general idea of the …
Founder Exit: Legal Checklist to Avoid Delays
Before buyers commit, their lawyers will conduct legal due diligence that may uncover gaps or non-compliance which delay the founder’s exit or reduce the price. This list helps founders/ sellers resolve common legal issues before they’re flagged in legal due diligence. Share Capital & Shareholders Have all past share allotments …
Founders selling for the first time need more than high-level legal advice
Some founders selling their businesses for the first time are not sure where legal advice is needed or how deep that advice should go. In past deals where I acted for buyers, I have seen: – A founder who asked their lawyer for a “high-level review” of sale and purchase …
Investing in Malaysia: What Foreign Investors Need to Know
For businesses entering the Malaysian market for the first time, navigating the appropriate corporate structure, equity and local ownership conditions, and directorship requirements can feel like a maze. Many of these requirements aren’t fully set out in legislation. Instead, they’re found in sectoral guidelines, policy documents, licensing pre-conditions, or included …
M&A isn’t always glamorous
M&A work isn’t always high-stakes negotiations. I remember working on an acquisition of an F&B group during the pandemic. It was after hours, and we needed to fill in a detailed schedule of the representations and warranties given by the sellers on the target companies’ registered trademarks. Each one had …