New Companies Act milestone for Malaysia

What is the primary aim of the new Companies Bill 2015 that will replace the existing Companies Act 1965?

To simplify doing business in the Asia Pacific region through certain deregulatory measures among ASEAN, strengthen corporate governance and facilitate management and restructuring of share capital as well as improving insolvency requirements

To improve doing business in Malaysia coupled with certain additional regulatory measures, strengthen corporate governance and facilitate management and restructuring of share capital as well as deregulating insolvency requirements

To simplify doing business in Malaysia coupled with certain deregulatory measures, strengthen public confidence and facilitate management and restructuring of debt capital as well as improving insolvency requirements

To simplify doing business in Malaysia coupled with certain deregulatory measures, strengthen corporate governance and facilitate management and restructuring of share capital as well as improving insolvency requirements

Company directors/management draws up a debt restructuring plan which is assessed by an independent insolvency practitioner. The restructuring scheme must be then be approved by a simple majority of shareholders and no less than 75 percent in value of creditors. The abovementioned corporate rescue scheme for financially distressed companies under the new Bill is known as -

Scheme of Arrangement (SoA)

Corporate Voluntary Arrangement (CVA)

Corporate Rescue Scheme (CRC)

Judicial Management (JM)

Once the Bill becomes effective, shares issued will have no par value and share premium will form part of the share capital. To ensure a proper transition to the new requirement, the Bill has set out/up -

A 12-month transition period with provisions for companies to deal with the existing share premium account and any other obligations/arrangements based on par value of their shares, assisted by a special bureau

A special bureau to assist companies to deal with the existing share premium account and any other obligations/arrangements based on par value of their shares during the transition period

A 24-month transition period with provisions for companies to deal with the existing share premium account and any other obligations/arrangements based on par value of their shares

A 24-month transition period with provisions for companies to deal with the any new share premium account and other obligations/arrangements based on fair value of their shares

Under the new Bill, company directors are likely to face increased sanctions compared to the existing Companies Act 1965. The sanction will entail -

Heavier fines and longer terms of imprisonment. Where the breach constitutes to a serious offence, it can result in a 2-year imprisonment and a RM1 million fine, or both, if there is a criminal conviction

Heavier fines and longer terms of imprisonment. Where the breach constitutes to a serious offence, it can result in a 2-year imprisonment and a RM3 million fine, or both, if there is a civil conviction

Heavier fines and longer terms of imprisonment. Where the breach constitutes to a serious offence, it can result in a 5-year imprisonment and a RM3 million fine, or both, if there is a criminal conviction

Heavier fines; where the breach constitutes to a serious offence, it can result in a RM3 million fine, if there is a criminal conviction

There is added responsibility placed on directors of companies under the new Bill as they will be required to sign a solvency statement to the effect of a statutory declaration that the company is solvent when it undertakes the following -

Declaring dividends to shareholders, capital reduction (where there is no court order), financial assistance, redemption of preference shares and share buybacks

Declaring dividends to shareholders, capital contribution, financial assistance, redemption of preference shares and share buybacks

Declaring dividends to shareholders, capital reduction (where there is no court order), financial assistance, redemption of preference shares and share sale or rights issue to investors

Declaring dividends to shareholders, capital contribution, financial assistance, redemption of preference shares and share sale or rights issue to investors

For dividends that were not properly paid, or was not received in good faith by shareholders and they are aware that the company did not satisfy the solvency assessment, the new Companies Bill 2015 empowers the company to -

Clawback the dividends from shareholders

Clawback the dividends from directors

Lodge a report and claim to the Companies Commission of Malaysia

Take legal action against the directors of the company and proceed with criminal charges in Court

The mandatory audit regime is retained but the Companies Commission of Malaysia (CCM) is now empowered to exempt certain categories of companies. What is the exemption criteria set out under the new Bill?

Trading companies with revenue not exceeding RM10 million and less than 50 employees

The exemption criteria, requirements and thresholds (if any) has yet to be set or determined at this juncture

Revenue not exceeding RM5 million and less than 25 employees

Revenue not exceeding RM10 million and less than 50 employees

When is the effective date of the new Companies Bill 2015 in Malaysia?

1 January 2017

There is no tentative effective date set for the new Bill at the moment

31 December 2016

One year from the passing of the Bill in the Dewan Rakyat (House of Representatives)

In terms of ease of doing business, under the new Bill a company can -

Be incorporated with just one individual as a single shareholder and a single director

Be incorporated with just one individual as a single shareholder and but with at least two resident directors

Be incorporated with just two individuals as shareholders and a single director

Be incorporated with just one individual as a single shareholder and a single director with no lodgement or filing made to the regulators

Which of the following is NOT a requirement of the new Companies Bill 2015 with regard to doing business in Malaysia?

The Bill removes the need for an Annual General Meeting (AGM) for private companies

Shareholders that make up 10% of the paid-up share capital may request for a general meeting if an AGM has not been held in the past 12 months

The need to have a Memorandum and Articles of Association (M&A) has been removed but companies that want to have certain provisions for its business can customise and encapsulate them in a Constitution

The Bill abolishes the unanimity rule for written resolutions for private companies and as such, a written resolution can be passed by a major shareholder. However, a shareholder having 5% or more of voting rights may require the company to circulate a resolution and a statement on the matter before passing the written resolution

New Companies Act milestone for Malaysia

What is the primary aim of the new Companies Bill 2015 that will replace the existing Companies Act 1965?

Once the Bill becomes effective, shares issued will have no par value and share premium will form part of the share capital. To ensure a proper transition to the new requirement, the Bill has set out/up -

Under the new Bill, company directors are likely to face increased sanctions compared to the existing Companies Act 1965. The sanction will entail -

There is added responsibility placed on directors of companies under the new Bill as they will be required to sign a solvency statement to the effect of a statutory declaration that the company is solvent when it undertakes the following -

For dividends that were not properly paid, or was not received in good faith by shareholders and they are aware that the company did not satisfy the solvency assessment, the new Companies Bill 2015 empowers the company to -

The mandatory audit regime is retained but the Companies Commission of Malaysia (CCM) is now empowered to exempt certain categories of companies. What is the exemption criteria set out under the new Bill?

When is the effective date of the new Companies Bill 2015 in Malaysia?

In terms of ease of doing business, under the new Bill a company can -

Which of the following is NOT a requirement of the new Companies Bill 2015 with regard to doing business in Malaysia?

You scored

0

out of

0

Test passed. Enter your details to download your certificate. Your certificate will also be sent to you by email.

Our sites

Useful links

Using this site

Contact us

Planned system updates

New Companies Act milestone for Malaysia

What is the primary aim of the new Companies Bill 2015 that will replace the existing Companies Act 1965?

Once the Bill becomes effective, shares issued will have no par value and share premium will form part of the share capital. To ensure a proper transition to the new requirement, the Bill has set out/up -

Under the new Bill, company directors are likely to face increased sanctions compared to the existing Companies Act 1965. The sanction will entail -

There is added responsibility placed on directors of companies under the new Bill as they will be required to sign a solvency statement to the effect of a statutory declaration that the company is solvent when it undertakes the following -

For dividends that were not properly paid, or was not received in good faith by shareholders and they are aware that the company did not satisfy the solvency assessment, the new Companies Bill 2015 empowers the company to -

The mandatory audit regime is retained but the Companies Commission of Malaysia (CCM) is now empowered to exempt certain categories of companies. What is the exemption criteria set out under the new Bill?

When is the effective date of the new Companies Bill 2015 in Malaysia?

In terms of ease of doing business, under the new Bill a company can -

Which of the following is NOT a requirement of the new Companies Bill 2015 with regard to doing business in Malaysia?

You scored

0

out of

0

Test passed. Enter your details to download your certificate. Your certificate will also be sent to you by email.

Related topics

Our sites

Useful links

Using this site

Contact us

Planned system updates