COMPANY LAW

DPA 30083 COMPANY LAW
INTRODUCTION TO COMPANY LAW

DEFINITION OF COMPANY

Section 2 of CA 2016:

“company means a company incorporated under this
Act or under any corresponding previous written law.”

A legal entity, allowed by the legislation, which permits a
group of people, as shareholders, to apply to
government for an independent organization to be
created, which then can focus on pursuing set
objectives, and empowered with legal rights to own
property, hire employees or loan and borrow money.

Oxford Dictionary:
A Commercial Business

MAIN LEGISLATION GOVERNING

COMPANIES ACT 2016 COMPANIES REGULATIONS 2017

Came into force on 31st Came into operation on 31st
January 2017, replacing the January 2017.
Companies Act 1965 (Act 125).
Has 12 items and 1 schedules.
Has 620 sections and 13
schedules. Deals with online matters and
procedures such as
Cross judicial benchmarking registrations, e-filing systems,
analysis from UK, Australia, fees and annulments.
New Zealand, Hong Kong and
Singapore. Complementary to Companies
Act 2016.
Brought a much-needed
overhaul and modernisation to
the company law regime in
Malaysia.

This is in line with the vision of the
Companies Commission of Malaysia to
keep up with international standards of
good corporate governance.

TYPES OF BUSINESS ENTITY

SOLE PROPRIETORSHIP

SOLE PROPRIETORSHIP

PARTNERSHIP

PARTNERSHIP

LIMITED LIABILITY PARTNERSHIP (LLP) 4. Capable of sue and being
sued, acquiring, holding,
1. Hybrid between partnership 2. Regulated under Limited 3. It is a body corporate and a owning, developing and
and private limited company. Liability Partnership Act 2012 in separate legal entity from its disposing property.
Malaysia. partners and has perpetual
5. LLP does not have successors. 8. LLP is similar to a
6. Differences between LLP conventional partnership but
requirements. to audit and company are in terms of 7. Differences between LLP and
other business entities includes : with the advantages of
accounts annually. issuance of shares, AGM, capital contribution, ownership of private limited company.
submission of financial
business, legal status, parties
statements to SSM, audited liable for debts, personal liabilities
accounts and etc.
and taxation.

COMPANY

• As contrast to Sole Proprietorship and Partnership, a company is an incorporated association.

• Upon incorporation, a company is a body corporate recognised by the law to have a separate legal entity
from its members and officers.

• This fundamental element of company law was established in the case of Solomon v Solomon Co Ltd (1897)
which formed the foundation of company law in Malaysia.

• Section 20 CA 2016 provides that :
” (1) a company incorporated under this Act is a body corporate and shall have:

a) a legal personality separate that of its members, and
b) continue its existence until it is removed from the register;
c) to do any act which it may do or enter into transaction.

(2) A company shall have full rights, powers and privileges for the purpose
mentioned in subsection (1).

*This principle is called Separate Legal Entity.

TYPES OF COMPANY

PUBLIC COMPANY Section 390 CA 2016 : “Only a
public company is mandated to
Section 2 CA 2016 : “Any hold its annual AGM.”
company which is not a private
company is a public company” Most public companies are
limited by shares.
Section 11 (2) CA 2016 : “ A
company limited by guarantee Public Companies requires at
shall be a public company.” least 2 resident directors.

Section 11 (3) CA 2016 :”An There are 2 types of public
unlimited company shall be company : listed and unlisted
either a private or public public company.
company.”

Section 25 (1) CA 2016 : :Its
name should be end with the
word ‘Berhad” or its
abbreviation “BHD”.

PRIVATE COMPANY

PRIVATE COMPANY

PRIVATE COMPANY

COMPANY LIMITED BY SHARES

PRIVATE LIMITED COMPANY (SDN. BHD.) 4. The minimum number of directors
required is 1, who is ordinarily
1. This is a company limited by 2. The shares of such companies 3. The minimum number of residing in Malaysia with a principal
shares of its shareholders. are privately issued to individuals shareholder is 1 while the place of residence in Malaysia.
and/or corporate bodies. The maximum number is 50.
shareholding is closed to public. 8. Allows an entrepreneur to
keep assets and finances
5.There is no need to publicly 6. May convert to public 7.It is a separate legal entity from
company, and vice versa, by its owners, which means this separately from the business.
report the fin. ancials of the passing a special resolution The shareholders are only
company is considered as a legal
company, nor there is a need and lodging a notice of ‘person’ that can buy or sell responsible up to the amount
to hold Annual General conversion with the CCM. property, present into legal that they have invested and
Meeting (AGM).
contracts, sue and get sued in the no more.
courts of law.

PUBLIC LIMITED COMPANY

ADVANTAGES

DISADVANTAGES

COMPANY LIMITED BY GUARANTEE (CLBG)

COMPANY LIMITED BY GUARANTEE (CLBG)

Section 45 (1) of CA 2016 : company’s object may be any of the
following:
a) providing recreation or amusement;
b) promoting commerce and industry;
c) promoting art,
d) promoting science,
e) promoting religion,
f) promoting charity,
g) promoting pension or superannution schemes; or
h) promoting any other object useful to the community

Section 45 (2) CA 2016:
Profits/ income must be applied to achieving or promoting its objects;
Prohibit to pay dividends to its members;
Prohibit distributing its assets to its members on a winding up.
Section 45 (4) and (5) CA 2016:
Shall not hold land unless obtained a licence from the minister who
thinks fit.
Section 45 (2)(c) : on a winding up, assets are to be transferred to

another company with similar objects or charitable purpose.

UNLIMITED COMPANY

UNLIMITED COMPANY

FOREIGN COMPANY

Section 2 CA 2016 defines a foreign company as:

company, corporation, society, association or
other body incorporated in Malaysia

An unincorporated society association, or other body
which under the law of its place or origin may sue or be
sued, or hold property in the name of the secretary.

Or other officer of the body or association duly appointed
for that purpose and which does not have its head office
or principal place of business in Malaysia.

Every foreign company desiring to carry
on business in Malaysia shall registrar
itself as a foreign company under the CA
2016 with the CCM (SSM or Registrar).
A foreign company registered under CA
2016 is commonly referred to as a
‘branch office’.

FOREIGN COMPANY

THANK YOU

ANY QUESTION?