One of the biggest sources of delay in Malaysian M&A due diligence is surprisingly simple:

Sellers often provide a company search from the Companies Commission of Malaysia (CCM) when what lawyers really need are the statutory share documents.

A lawyer conducting proper due diligence will typically request documents such as:

•  Shareholders’ resolution approving the allotment of shares
• Directors’ resolution for allotment of shares
• Return of allotment of shares
• Stamped share transfer forms
• Register of members
• Register of transfers

These statutory documents are required to verify:

1. ownership of the shares
2. whether the shares were properly allotted and transferred under the Companies Act 2016 of Malaysia.

This is why a CCM search falls short:

• Under the Companies Act 2016, the entry of a person’s name in the register of members as shareholder is prima facie evidence that legal title to the share is vested in that person.
• The Companies Act prohibits directors from allotting shares without prior shareholders’ approval. Any issue of shares made in contravention of this requirement shall be void and consideration given for the shares shall be recoverable accordingly.
•  The recent Federal Court decision in 𝘞𝘛𝘒 𝘙𝘦𝘢𝘭𝘵𝘺 𝘚𝘥𝘯 𝘉𝘩𝘥 𝘷 𝘒𝘢𝘵𝘩𝘳𝘺𝘯 𝘔𝘢 𝘞𝘢𝘪 𝘍𝘰𝘯𝘨 & 𝘈𝘯𝘰𝘳 & 𝘖𝘵𝘩𝘦𝘳 𝘈𝘱𝘱𝘦𝘢𝘭𝘴 confirms that a court order is required for validation of shares that were not properly allotted, rather than relying on informal shareholder assent.

However, many sellers provide only a CCM search believing that if their names appear on the CCM search, it is sufficient.

This often leads to unnecessary rounds of back-and-forth, a problem that is amplified in deals where the due diligence team interacts with sellers only through intermediaries. Deals slow down. Timelines lengthen. Everyone gets frustrated.

The Takeaway

If sellers want due diligence and the deal to move quickly, the solution is simple:

Provide the share ownership documents upfront, not just the CCM search.

I share insights like this to help clients and counsels navigate Malaysian M&A with clarity.

If you’re dealing with cross-border transactions or preparing for a sale or acquisition, always happy to connect.

#MalaysianCorporateLawyer

This post was first posted on LinkedIn on 16 November 2025.