Beneficial Ownership of Companies: Out of the Shadows

Recent headlines have carried the news that the Malaysian Anti-Corruption Commission wants to have its own provision on beneficial ownership in the MACC Act 2009 to identify real owners of businesses or properties to further eradicate corruption. This is also against a backdrop of the Panama Papers, and the Paradise Papers.

There is already an existing provision in the Companies Act 2016 (CA 2016) that deals with beneficial ownership. But perhaps, it does not go far enough.

It is important to identify the beneficial owner of a legal entity such as a company, a trust or a partnership. This will ensure tax transparency, and help to fight against tax evasion and financial crimes such as money laundering or terrorism financing. The true controllers of companies will be brought out of the shadows.

I set out some global trends, and I explain the existing Malaysian provision under the Companies Act 2016 (CA 2016) and the possible direction going forward.

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Practising Certificate for Company Secretaries and the Duties of Company Secretaries

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

Practising Certificates for Company Secretaries: Proposed Regulations

The Companies Commission of Malaysia, or Suruhanjaya Syarikat Malaysia (SSM), will be bringing into force the last remaining provision of the Companies Act 2016 (CA 2016). This is section 241 of the CA 2016 on the requirement for all company secretaries to register with SSM. SSM will issue practising certificates to all company secretaries.

In line with the coming into force of section 241 of the CA 2016, SSM has published  its Consultative Document on the Proposed Companies (Practising Certificate) Regulations 2019. SSM has invited comments on the Consultative Document by 30 October 2018.

I set out a bit of history leading up to this important provision for registration of all company secretaries, and my observations on the Consultative Document. Continue reading

Choosing the right business vehicle for your startup or small business in Malaysia

This post is a part of a series based on my Law for Startups workshop at MaGIC in September 2015. It’s a basic introduction to legalities for startup founders. You can access the slides here.

Read the earlier posts for context:

  1. Law for startups in Malaysia — building on the best foundations.
  2. The legal landscape in Malaysia for startups — a hybrid of traditional corporate practices and Silicon Valley models.

One of the earliest decisions that a startup or small business founder will have to make is choosing the right business vehicle through which the business/idea will be carried out.

Business vehicle options

The most common business vehicle options in Malaysia are —

  1. sole proprietorships / partnerships;
  2. private limited liability companies (Companies / Sdn Bhd); and
  3. most recently, the limited liability partnership (LLP).
Unfortunately, Elon hasn't made this vehicle available in Malaysia yet.
Unfortunately, Elon hasn’t made this vehicle available in Malaysia yet.

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