Transfer of shares of a Malaysian company

Company Law

How do investors who want to invest in a company in Malaysia check whether the legal requirements relating to transfer of shares in the company have been complied with?

The things you need to check include:

1. Whether there are any provisions in the constitution of the company or shareholders’ agreement which require directors’ or shareholders’ approval for the transfer of shares. If yes, check whether the necessary resolution has been passed.

The company may not necessarily have a constitution and the shareholders may not have entered into any shareholders’ agreement.

2. Whether the Registrar has been notified of the changes in the particulars of the register of members of the company within 14 days of the changes (section 51 of the Companies Act 2016).

3. Whether shareholder has lodged duly executed and stamped instrument of transfer with the company (section 105 of the Companies Act 2016).

4. Whether the company has entered the name of the transferee in the register of members as a shareholder within 30 days from receipt of instrument of transfer (section 106 of the Companies Act 2016).

5. Whether share certificate has been issued.

It is not mandatory for the company to issue a share certificate unless the company has received an application by a shareholder for the certificate or the constitution of the company provides for issuance of share certificate (section 97 of the Companies Act 2016).

6. Whether any consent of or notification to authorities or third parties is required pursuant to the terms of agreements entered by the company or conditions of licences granted to the company.


This post was originally posted on Linkedin on 9 February 2022. Follow me on Linkedin.

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