company law

Case Update: Two-Year Time Limit to Obtain Court Order to Reverse Dissolution of Company

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The High Court decision in Ketua Pengarah Hasil Dalam Negeri v Suruhanjaya Syarikat Malaysia and another (Grounds of Judgment dated 12 February 2019) held that there is a strict two-year time limit from the date of dissolution to obtain the Court Order to reverse the dissolution of a company. It is not enough to file the court application within that two-year period from dissolution.

This is in the context of interpreting section 535(1) of the Companies Act 2016 (CA 2016) (which is identical to the previous section 307(1) of the Companies Act 1965). This section states that “where a company has been dissolved, the Court may, at any time within two years after the date of the dissolution … make an order … declaring the dissolution to have been void.” Continue reading →

Restraining Order under a Scheme of Arrangement Must Satisfy Pre-Conditions from the Start

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An applicant must meet the statutory pre-conditions for the grant of a moratorium (otherwise known as a restraining order) under Malaysia’s scheme of arrangement even at the initial application stage. This was decided in a recent High Court decision dated 22 April 2019. The Court set aside the initial grant of the restraining order as the applicant companies had not satisfied the pre-conditions at the time of the application.

To my knowledge, this is also the first decision on this issue under the new section 368(2) of the Companies Act 2016 (CA 2016). There have been conflicting High Court decisions on this issue when interpreting the predecessor section 176(10A) of the Companies Act 1965 (CA 1965). The full grounds of judgment have not been issued yet.

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Case Update: Court of Appeal Rules on Removal and Remuneration of Liquidator

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The Court of Appeal issued its Grounds of Judgment dated 11 December 2018 in the case of Ong Kwong Yew and others v Ong Ching Chee and others. It is a cautionary tale for liquidators on the grounds for their removal as liquidator and their conduct in terms of seeking fees for work done.

The conduct of the liquidator was serious enough for the Court of Appeal to remark that the liquidator ought to be sanctioned by the Malaysian Institute of Accountants or the Director-General of Insolvency.

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Case Update: Passing of a Members’ Written Resolution under the Companies Act 2016 with “More than Half of Such Members”

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The High Court in the case of  Mohamed Zain Yon Bin Mohamed Fuad v Jason Jonathan Lo & Ors issued its Grounds of Judgment dated 6 March 2019. The case clarifies the interpretation of the new members’ written resolution provision of the Companies Act 2016 (CA 2016). More than half the number of shareholding of the members is required to pass the members’ written resolution. It is not more than half the number of the shareholders. Further, the case also emphasised how the CA 2016 applies even to companies which still retain the Table A Articles of Association under the Companies Act 1965 (CA 1965).

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Practising Certificate for Company Secretaries and the Duties of Company Secretaries

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Section 241 of the Companies Act 2016 (CA 2016) has come into force today on 15 March 2019 (see P.U.(B) 138/2019). This is the last provision of the CA 2016 to be brought into force. Under this section, all qualified persons who wish to act as a company secretary must register with the Registrar of Companies.

With the coming into force of section 241, the Companies (Practising Certificate for Secretaries) Regulations 2019 and Guidelines Relating to Practising Certificate for Secretaries Under Section 241 of the Companies Act 2016 have also come into force on 15 March 2019. There is also a FAQ section on the Companies Commission of Malaysia website. Continue reading →