At the MIA International Accountants Conference 2016 today, I spoke on panel session on the Companies Act 2016.
The speaker from the Companies Commission of Malaysia (CCM) announced that the new Act will be brought into force in the first quarter of 2017, except for the provisions on the two new corporate rescue mechanisms of corporate voluntary arrangement (CVA) and judicial management (JM). Time is needed for the subsidiary legislation for CVA and JM to be drafted and approved by the Rules Committee under the Courts of Judicature Act 1964. The target would be for CVA and JM to be brought into force before the end of 2017.
Therefore, the areas we will have to already start preparing for include:
- Review the existing Memorandum and Articles of Association and to decide on whether to adopt a Constitution. The provisions in these documents should be reviewed to ensure compliance with the new Act.
- Be prepared for the move to the no-par value regime. How do you utilise the amounts in your share premium account? With the shift to no-par value, your share premium will be merged and consolidated into a single contributed capital.
- Make use of the incorporation-related changes, and with the incorporation of the single-director single-shareholder company.
- New obligations on directors, in particular, the need to meet the solvency test and to prepare a Solvency Statement.
- Do away with the holding of AGMs for private companies. But to be prepared for the change in timing for the filing of annual returns and financial statements.
To read more about my other thoughts on the new Companies Act 2016, see my earlier articles below: