I had written earlier about the global trends for the need for transparency in beneficial ownership details and also the existing Malaysian position in the Companies Act 2016.
Once these proposed guidelines on beneficial ownership are brought into force, they will bring much certainty in terms of the disclosure obligations on the part of companies, limited liability partnerships and businesses in general. This is a good step in strengthening the need for disclosure on beneficial ownership.
In the first part of this post, I highlight some of the salient changes being proposed for companies specifically. In the second part, I then set out 8 of my observations on the proposed guidelines in relation to companies. Continue reading →
The Companies Commission of Malaysia (SSM, being the Malay abbreviation) maintains a useful FAQ page on the Companies Act 2016 (CA 2016) and other transitional issues. This page is updated from time to time. The FAQ is stated as being for general reference. The document does not have legal force. The issues and answers may ultimately have to be tested in the courts.
I touch on two recent updates as at 7 August 2019 dealing with voting on preference shares and meetings of a single-member public company.
The High Court in its grounds of judgment dated 5 August 2019 in the case of United Renewable Energy Co Ltd v TS Solartech Sdn Bhd. This is the first Malaysian decision to recognise the doctrine of universal succession. The Court gave effect to the transmission of shares by operation of law where there has been a foreign merger. This is a matter where I successfully acted for the applicant company.
The High Court granted a declaration that the foreign merger of the Taiwanese companies in question had carried into effect a transmission of shares held in a Malaysian company by operation of law. Further, the High Court allowed a rectification of the register of members of the Malaysian company to reflect the name of the successor entity.
The amendment Bill will make amendments to the Companies Act 2016 (CA 2016). I have since updated this article to take into account the Parliamentary debate of the amendment Bill.
I highlight seven of the more significant amendments. There will be welcome clarification of the effect of section 66 on the execution of what sort of documents, as well as the redemption of preference shares out of capital. But I can see issues relating to the appointment of receivers or receivers and managers after liquidation. There is a severe dilution of the ability to apply for judicial management.
#1: Section 66 to Only to Apply to Specific Types of Documents
On 20 June 2019, I will be speaking at the Companies Commission of Malaysia Training Academy (COMTRAC) session on Cessation of Companies and Limited Liability Partnerships. This one-day seminar is held in Kota Kinabalu, Sabah. You can still sign up for the seminar, and with the registration fee at RM500 or discounted to RM400 for licensed secretarties, and for members of MAICSA, MIA, the Malaysian Bar, MACS, MICPA, Sabah Law Association and the Advocates Association of Sarawak.
My co-speaker is Puan Norhaslinda Salleh. She is the Head of Insolvency in the Registration Services Division, Companies Commission of Malaysia. Continue reading →