One of the first things buyers’ lawyers look at during legal due diligence is whether the business owners or sellers own the shares they say they do.

Some sellers provide a Companies Commission of Malaysia (CCM) search to show their ownership. However, from a legal perspective, this is not sufficient.

We usually request the full set of company secretarial records, including:

• Register of members

• Register of transfer

• Return for allotment of shares

• Stamped share transfer forms

• Notification of change in the register of members

• Directors’ and shareholders’ resolutions

If these documents are incomplete or not in order, legal due diligence is prolonged.
There’s a lot of back and forth, and timelines start to slip.

Under section 101 of the Companies Act 2016, in the absence of contrary evidence, the entry of a person’s name in the register of members is prima facie evidence that legal title to the share is vested in that person.

It’s a small issue, but in my experience, it often causes unnecessary delays.
One that’s entirely avoidable with the right understanding and preparation.

If you’re thinking ahead to a future sale, this is one of the details worth getting right early in the process.

#malaysiancorporatelawyer

#mergersandacquisitions

#founders

This post was first posted on LinkedIn on 19 April 2025.