DIRECTOR POWER OF COURT TO DISQUALIFY PERSON FROM ACTING AS DIRECTOR

TYPE OF DIRECTOR SECTION 199:

(1) EXECUTIVE DIRECTOR The court may, on an application by the Registrar, make an order to disqualify
Full time employees and draw salaries from the co. for performing any person from acting or holding office as a director or promoter of a
managerial functions. They are members of the BOD with specific company, or be concerned with or taking part in the management of a
executive responsibilities, example finance director. company whether directly or indirectly if –
(a) Within the last 5 years, the person has been a director of two or
(2) NON-EXECUTIVE DIRECTOR
more companies which went into liquidation resulting from the
Members of the board without executive responsibilities. They
company being insolvent due to his conduct as a director that
are not employees of the company and receive fees which are
contributed to the liquidation
determined by the members at the general meeting. Full time
(b) Due to his contravention of the duties of a director
employees of the company that hold shares in the company where (c) Due to his habitual contravention of this Act
he serve as non. To protect and act in the best interest of his CONSENT TO ACT AS DIRECTOR SECTION 201
employer as shareholder of the company. A person shall not be appointed as a director of a company unless he has
(3) ALTERNATE/SUBSTITUTE consented in writing to be a director and make a declaration that he is not
Appointed by the members of the bord. disqualified from being appointed or holding office as a director of a company
Purpose – to act and speak during period of absence of the director under this Act
A director cannot appoint an alternate to act unless the RETIREMENT OF DIRECTORS SECTION 205
Constitution so authorized • The provision under this section shall apply with regards to the retirement
Must give his consent to act before his appointment of directors unless there is specific provision in the company’s constitution
Not required to hold qualification shares or the term of appointment regarding retirement of directors
Alternate director shall automatically be vacated if substantive • The director shall retire:
Director vacates office. 1st AGM of public company, all directors shall retire
Alternate Director entitle to receive At AGM in every subsequent year, 1/3 of the director shall retire
Notice of board meeting, to attend and vote, to exercise all powers The retire director, shall be eligible for re-election.
INCORPORATION
Of the substantive director in his place.
REQUIREMENT OF A COMPANY [SECTION 9]
(4) MANAGING DIRECTOR
A name, one or more member, having limited or unlimited liability for the
If provide in the constitution – the board giving the power to appoint
obligations of the co. In the case of company limited by shares, one or more
If not – vice versa.
shares. One or more directors.
The constitution must be altered to empower the BOD to make term APPLICATION FOR REGISTRATION OF A COMPANY [SECTION 14]
And conditions before MD is appointed. The MD will sign a contract • Name and proposed registered address of the company
Of service. Not subject to retirement by rotation and his • Whether the company is private or public
appointment • The nature of the business of the company (notwithstanding, a company
Shall be terminated if he ceases from any cause to be a director will not be limited to only this business)
The company can terminate even if term if service is not yet expired • Names, identification, nationality, and place of residence of the member,
(5) NOMINEE DIRECTORS director and secretary.
SEC 217 – CA 2016 • In the case of a company limited by shares, the class and number of shares
A person who has been designed to act for another in his/her place taken by members
Shall act in the best interest of the company • In the case of company limited by guarantee, the amount up to which
(6) INDEPENDENT DIRECTORS member undertake to contribute to the assets of the company in the event
At lest two directors or 1/3 of the BOD whichever is higher it is wound up
Is independent director. • Any other information as the Registrar may require.
Independent director is a director who is independent Upon an application by a company and on payment of a prescribed fee, the
Of management and free from any business or other relationship Registrar may issue to the company a CERT OF INCORPORATION.
Which could interfere with the exercise of the independent
Judgement. NAME SEARCH [SECTION 26(1)]
QUALIFICATIONS – (a) Not undesirable or unacceptable
(b) Not identical to an existing business entity’s name under the registers kept
Not an executive director of the listed company, not an officer
pursuant to laws administered by the CCM
Not a relative of any executive director, officer or major
(c) Not identical to a name that is being reserved under the CA 2016
shareholder. Not acting as a nominee or representative of any
(d) Not a name of a kind that the Minister of Domestic and Consumers Products
executive director or major shareholder. Not engaged as a
has directed to the Registrar not to accept for registration
professional NAME THAT IS ACCEPTABLE
adviser and not engaged in any transaction which exceed RM250k (1) Correct spelling and proper grammar must be used
QUALIFICATION OF DIRECTOR (2) Names that not resemble elements of religion
Natural person of age 18 years above. Lodge Statutory Declaration Form 48A(3) The meaning of created or coined words must be given
within 1 month from the date of appointment together with Form 49. 1st(4) The names refers to the name of the owner or director
director named in constitution. 1st director will hold office until 1st AGM where APPROVAL OF PROPOSED NAME
they will retire. Subsequent appointment by the director themselves. A person shall submit application for availability of names and reservation to the
DISQUALIFICATION OF DIRECTOR registrar. Confirm the availability of the proposed name and reserve the name
SECTION 198 for the period of 30days from the date of lodgement of the application or such
A person shall not hold office as a director of a company or whether directly or longer period as Registrar may allow.
indirectly be concerned with or takes part in the management of a company, if SECTION 27(3)
(a) Is undischarged bankrupt If an applicant of a company is aggrieved with the decision of the Registrar in
(b) Has been convicted of an offence relating the promotion, formation or confirming the availability of the name, he may appeal against such decision to
the Minister “APPEAL TO MINISTER AGAINST DECISION OF REGISTRAR UNDER”
management of a corporation
VERIFICATION OF INCORPORATION
(c) Has been convicted of an offence under sections 213,217,218,228,539
(i) Notice of registration
(d) Bribery fraud or dishonesty
(ii) Certificate of incorporation will only be issued by CCM upon request
(e) Disqualified by court under section 199
together with the prescribed fees
POST INCORPORATION (I) Appoint of company secretary
(i) If required by company, it may file the constitution
 COMPANY SECRETARY CONVERSION OF STATUS OF COMPANY
ROLE AND FUNCTION OF COMPANY SECRETARY (1) UNLIMITED TO LIMITED [SECTION 40]
(1) Guiding the board members as to their duties and responsibilities - By passing a special resolution, lodge the notice for
(2) Ensuring that the company complies with all relevant laws conversion and alterations to its name
(3) Conducting an ongoing strategic communication between the company Registrar shall:
and its key stakeholders so that the board and management are (a) Make endorsement or alter the registers
informed about stakeholders needs, interests and expectations of the (b) Issue notice of conversion, cancel previous notice of v
company. Registrar will notify (in writing)
FUNCTION (a) It is being dispensed from lodging any docs as an
SUPPORT THE BOARD AND CHAIRMAN unlimited company
Providing advice to the chairman and directors as to their duties and (b) Conversion will take effect on the issue of notice of
responsibilities conversion
APPOINTMENT OF NEW DIRECTORS This conversion shall not:
Assisting the board in ensuring a smooth administration of the appointment (a) Affect the identity of the co or any rights/obligations
of new director of the co.
COMPLIANCE WITH FILING AND ADMIN REQUIREMENT (b) Render defective legal proceedings against the co
Ensuring compliance with the procedure for conducting meetings and the
safekeeping of corporate documents. (2) PUBLIC COMPANY TO PRIVATE COMPANY
REQUIREMENT OF SECRETARY [SECTION 235] - Passing the following at EGM
A company shall have at least one secretary who shall be natural person, 18 (1) Special resolution and lodge:
years old and above, citizen or permanent resident in Malaysia and shall be a (A) NOTICE OF CONVERSION FROM PUBLIC TO PRIVATE
member of a body set out in the fourth schedule of the act or a person - Amend its name by adding the word SDN
licensed by CCM under s20G of CCM Act 2001 - Alter provision of constitution to impose the restrictions
- The Malaysian institute of accountants applicable to a private co. in accordance to Section
- The Sabah law association LODGED THE FOLLOWING DOCUMENTS WITH THE CCM:
- The Malaysian bar council - Printed copy of the amended constitution
APPOINTMENT OF SECRETARY - Registration fee of RM500
In accordance to Section 236, the board shall appoint a secretary and - Original copy of notice of registration or certificate of
determine the terms and conditions of such appointment. The appointment incorporation
of the first secretary shall be made within 30 days from the date of CCM WILL ISSUE
incorporation of company and the company shall submit “NOTIFICATION OF Form 19 certificate of incorporation on conversion to a private c
APPOINTMENT OF THE FIRST COMPANY SECRETARY”
The person appointed as secretary shall make declaration using form (3) PRIVATE COMPANY TO PUBLIC COMPANY
“DECLARATION BY PERSON BEFORE APPOINMENT AS SECRETARY” that: Passing a special resolution and lodge with the registrar:
- He is qualified to act as secretary pursuant to S235 - A notice of conversion and specifying an appropriate
- He is not disqualified to act as secretary under S238 alteration to its name
- He consents to act as secretary of the company. - A statement in lieu of prospectus
RESIGNATION OF SECRETARY [SECTION 237] - A statutory declaration verifying para 190 (2)(b) has been
S237(1) complied with.
Provides that a secretary may resign from office by giving a notice to the board of UPON THE LODGEMENT OF THE NOTICE, THE REGISTRAR
directors of the company and that resignation will take effect the expiry of 30 days from
SHALL:
the date of the notice lodged or the period specified in the Constitution of the terms of
- Make endorsement in/alterations to the registers to
appointment. If a secretary resigned by giving notice the board of directors, he may lodge
a copy of the “NOTICE OF INTENTION TO VACATE THE OF SECRETARY” accompanied by record the conversion
“DECLARATION BY SECRETARY TO CEASE OFFICE” to the Registrar if he is of the view that - Issue notice of conversion and cancel the previous notice
his resignation may not be notified to the Registrar. of registration or certificate of incorporation of the
S237(2) company.
Provides that if none of the directors of the of the company can be communicated with THE CONVERSION WILL TAKE EFFECTS para (3) has been fulfilled
at the last known residential address, a secretary may submit a “NOTICE OF INTENTION The conversion of the status will not:
TO VACATE THE OFFICE OF SECRETARY” to registrar
- Affect the identity of the co or any rights
DISQUALIFICATION TO ACT AS A SECRETARY
- Render defective legal proceeding by the co
S238
Disqualifies a person to act as a secretary if: - Legal proceedings prior to the conversion will be
- He is undischarged bankrupt. He is convicted in or outside Malaysia of any continued or commenced against the company after the
offence referred to in section 198. He ceases to be a holder of a practicing conversion
certificate issued by the Registrar under section 241 REASONS TO BE LISTED ON BURSA MALAYSIA
SECTION 239 Main reason: raise capital
State that the Board may remove a secretary from his office in accordance with the terms Other reasons: Facilitate growth, enhance credibility, Enhance profile and
of appointment or the Constitutions. Section 240 states that the office shall not be left
visibility
more than 30days at any one time.
Incentive for employees, Widen shareholders base.
REQUIREMENT TO REGISTER WITH REGISTRAR
Any person who is qualified to act as secretary and who desires to act as a secretary shall DISADVANTAGES
be registered under section 241 before he can as a secretary. The registrar shall cause a - Tedious and expensive listing costs
register of Secretaries to be kept and shall cause to be entered in the register in relation - Loss of privacy
to a secretary: - Risk of eventual dilution of control
- The name, the residential address and business address, the details - Accountability to the public
qualifications referred to section 235(2) - Disclosure requirement
SECTION 242
- volatility
Prohibits a person to act in a dual capacity as both a director and a secretary in situation
that requires or authorise anything to be done by a director and a secretary
 THE COMPANIES COMMISION OF MALAYSIA TYPES OF COMPANIES
Statutory body regulates companies and businesses (1) LIMITED COMPANY
ACTIVITY: (I) LIMITED BY SHARES
- To serve as an agency to incorporate companies and register - Members cannot be asked to pay more than the
businesses as well as to provide company and business amount unpaid on his shares in the event of
information to the public winding up
- To ensure that the provisions of the CCM Act and laws are - Creditors do not have recourse/choice against
administered, enforced, given effect to, carried out and complied members to an unlimited extent
with - Easy to transfer ownership
- To act as agent of the government and provide services in - Have the word BHD, can offer shares to public
administering, collecting and enforcing payment of prescribes (A) PRIVATE COMPANY
fees or any other charges - Name of company end with SDN BHD
- Administered and enforces the CA 2016 and its subsidiaries - Can commence business and exercise borrowing
legislations powers as soon as they incorporated
- Submission of relevant documents to get approval for - No statutory meeting
incorporation of companies - Does not issue prospectus and cannot offer to
- Reports to the Ministry of Domestic Trade and Consumer Affairs public
- Power to inspect, investigate and compound offences under the - Prohibited to invite public to deposit money
relevant Acts it administers
FORMS OF BUSINESS OWNERSHIP (i) EXEMPT PRIVATE COMPANY
SOLE PROPRIETOR (B) PUBLIC COMPANY
- One person - Can only commence business after the issue of
- Profit or loss (no sharing) cert for commencement by CCM
- Liability (unlimited) - Must hold statutory meting
- Business assets are his assets (i) PUBLIC LISTED COMPANY
- No legal entity (ii) NON- PUBLIC LISTED COMPANY
- Where the sole p dies the firm will be closed
PARTNERSHIP (II) LIMITED BY GUARANTEE
- Minimum 2 - maximum 20 - Trade associations, charitable bodies
- Profit or loss (shared between partners) - Liability of the members is limited by the MOA to
- Liability (unlimited) the amount members have guarantee to
- Partners own the assets collectively contribute in the event of winding up
- No legal entity - Enjoy the limit on liability to the amount fixed
- Dissolved in accordance with the partnership agreement only
COMPANY - Prohibits the formation with share capital
- Min 1 – no limit (public) 50 (private) - Usually formed for non profit-making purposes
- Profit or loss (div payment) (2) UNLIMITED COMPANY
- Liability (limited to investment)
- Company possesses its own property; members do not have
interest in the company’s property as they do not legally own
them
- Can sue and be sued in its own name to enforce its rights or
liability owed by it
- Provision of the companies act 2016
JOINT VENTURE
- A collab of 2 or more separate entities with a view to share profits
- Some JV are formalized through the incorporation of separate
company jointly undertaken by the joint ventures
- Some JV are collab between JV without any separate company
- Unincorporated JV is not a separate legal entity
LIMITED LIABILTY PARTNERSHIP
- Complement the traditional options of carrying on a business
either by way of sole proprietorship, partnership or companies
- Governed by LLP Act 2012
- Combines the characteristics of a company and a partnership firm
that provides the protection of limited liability for its partners and
flexibility of the partnership arrangement for the internal
management of its business
- Provide businessman and investors the flexibility and freedom to
select the best business model that suits their needs and the
requirements of their respective business structure
REGISTRATION OF A NEW LLP
SUBMIT TO REGISTRAR
- name of the proposed LLP
- General nature “
- Proposed registered office of the LLP
- Name and details of every person who is to be a partner of the LLP
- Name and details of compliance officer of the LLP