Compliance and Legal Due Diligence: An Exercise of Frustration?

Due Diligence

Lawyer: Please provide register of members, register of directors, all returns of allotment, all stamped transfer forms…

Representative of Target Company: Please refer to company search from the Companies Commission of Malaysia.

Lawyer: CCM search is not sufficient. Please provide register of members, register of directors, all returns of allotment, all stamped transfer forms…

Why is CCM search not sufficient?

  1. The Companies Act 2016 of Malaysia provides that the register of members is prima facie evidence of the information stated therein, and hence prima facie evidence of shareholders and their shareholding in a company.
  1. The Companies Act 2016 mandates that companies maintain accurate records such as the register of members and register of directors. These documents are necessary to verify compliance with legal requirements.
  1. There are procedures that need to be complied with under the Companies Act 2016 of Malaysia in relation to allotment and transfer of shares. One of the reasons for requesting for statutory records instead of relying on CCM search is to determine whether these procedural legal requirements have been complied with.

Having experienced legal counsel to clearly outline the requirements will expedite the due diligence process and ensure all parties understand what is required and why it is essential.

This post was first posted on LinkedIn on 26 March 2025.

Linkedin Post
Partial Share Sales in Malaysia: What Sellers Need to Know About Guarantees

In partial disposals, it’s common for sellers and buyers to agree that any existing guarantees given by the sellers to secure banking facilities of the target companies will be adjusted to reflect the post-completion shareholding. For public listed companies (PLCs) in Malaysia, this can affect the deal timeline if not …

Linkedin Post
M&A Break Fees: Practical Constraints in Malaysia

In M&A transactions, break fees refer to a pre-agreed sum payable if a party withdraws from a proposed transaction without any breach by the counterparty. In principle, break fees are intended to deter frivolous exits and to compensate the other party for transaction-related costs, including due diligence and advisory expenses. …

Linkedin Post
M&A Disclosure Letter: DIY or Get a Lawyer?

In M&A transactions, a disclosure letter sets out the exceptions and qualifications to the representations and warranties (R&Ws) given by a seller in a share sale and purchase agreement (SPA). Getting it wrong can turn an unintentional misstatement into a breach of contract, with serious legal and financial consequences. Should …