Don’t Skip Details in Completion Accounts
Not long ago, I was asked to review a share sale and purchase agreement that used a completion accounts mechanism to determine the final purchase price. What struck me was how many key details about preparing the completion accounts were missing. Those missing details could literally cost millions. It reminded …
A Joint Venture Starts with the Right Questions
People often think the real work begins with the first draft. But for me, it begins with asking questions to uncover what the client truly wants. Occasionally, there are questions that make the client pause and think, “That’s a good point. I haven’t thought of that.” I was recently asked …
What is the most freuquently asked question in cross-border M&A transactions?
As Malaysian counsel, the question I get asked most often is about the transfer of shares. Some real-life examples I encountered recently: Are there registration requirements that must be fulfilled before the transfer is effective? What documents are required to register the change of shareholder in Malaysia? It comes in …
What Founders and Sellers Often Overlook Before an Exit
Most founders or sellers are caught off guard when lawyers ask simple but important questions during legal due diligence: Has the resolution been properly passed / shareholders’ and board approval obtained for a past transaction undertaken by the target company? Was the agreement entered by the target company stamped on …
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 …
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 …