After my earlier introduction and summary of the new Companies Bill, I will be writing a series of articles on the new Companies Bill. I aim to release an article every few weeks or so, touching on the different areas of the new law. For ease of reference, I will continue to refer to it as the Companies Bill and insert the clause references in brackets.
I kick off this series by focusing on 3 things existing companies should already look out for under the Companies Bill. While the Companies Bill may only come into force in the next 6-12 months or so, I highlight 3 areas companies should start preparing for right now.
In summary, these 3 areas are:
Your existing Memorandum and Articles of Association: Do you need to fine-tune the provisions?
The new law will shift to a no-par value regime: Impact on your existing share premium account.
Putting in place checklists and guidelines for the new internal processes.
The new Companies Act will undoubtedly transform Malaysia’s corporate landscape. Underpinning the changes are the aims of spurring entrepreneurship, making the corporate vehicle more attractive for businesses, deregulating certain aspects of the corporate process, and to introduce the concept of corporate rescue for ailing companies.
It is anticipated that the new Companies Act itself will not be brought into force until a year’s time or so. This is because the new regulations, rules and guidelines will still need to be drawn up.
I set out below 7 of the more significant areas we will see in the new Companies Act. Continue reading →
I was interviewed by The Edge Financial Daily and I shared my views on some of the challenges that directors will face under the upcoming Companies Bill.
“It’s not an easy balancing act to be done. But if you are speaking from the perspective of minority shareholders or even shareholders, I would say they will be welcoming these changes because there is more information, and the directors have to allow a platform for the shareholders to discuss, query, ask questions, even if it’s not contained specifically in any audited accounts.
“Free flow of information is quite welcomed,” Lee told The Edge Financial Daily after presenting his paper “New Companies Bill: Upcoming Changes and Impact on Directors and Shareholders” at the Malaysia Legal and Corporate Conference on Oct 7.
Although Lee welcomed the greater flow of information and interaction between the board and the shareholders, he warned of the possibility of shareholders abusing the new privileges to the detriment of the company and its operations.”
My views in The Edge were also briefly discussed on the BFM Morning Run on 19 October 2015.
It appears from the Parliament website that the Companies Bill 2015 was tabled for its First Reading on 19 October 2015 and for the Second Reading on 20 October 2015. So we are now in the process of ushering in the new laws.