Company Law

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BT20403/Company Law

Business Entities:
Company Law

Topics covered:
Types of Company
Formation of a company;
• Promoters
Pre-Incorporation Contract
• Memorandum and Articles of Association
Inconsistency between the object and the
company’s activities
Upon incorporation:
• Company is an artificial legal person
• Separate legal entity

Lifting the corporate veil
scs&ismk/company law

CONT.

2

The Effect of Incorporation
• Memorandum of Association & Articles of

Directors’ duties and liabilities

association

• Common law & statutory
• Termination

• Limited Liability

Winding up

Doctrine of Ultra Vires
Pre-Incorporation Contract
Directors’ duties and liabilities

scs&ismk/company law

3

In Malaysia, the law relating to companies are
governed by the Companies Act 1965 (CA 1965).

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4

The word company or corporation is defined under
s.4(1) CA:

Besides the CA 1965, other relevant legislations are
the Capital Markets Act 2007, the Securities
Commission Act 1993 and the Companies
Commission of Malaysia Act 2001.

“company” means a company incorporated pursuant
to this Act or pursuant to any corresponding
previous enactment;

Although company law in Malaysia is based mainly
on CA 1965, there are key areas of company law
which are based on judicial precedents.

“corporation” means any body corporate formed or
incorporated or existing within Malaysia or outside
Malaysia.

A company or corporation is a legal association of
people who combine to finance a business.
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5

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6

1

BT20403/Company Law

A company with share capital is a private company if
its M&A provides: s.15(1)

S.14(2)
S.14(2) CA 1965 provides the classification of
companies:

• restricts the right to transfer shares;
• Limits the number of members to not more than 50;
• Prohibits any invitation to public to subscribe any of

Type of companies

the company’s shares or debentures;

• Prohibits any invitation to public to deposit money
Limited by shares

Limited by guarantee

with the company

Unlimited
liability

A public company is a company other than a private
company
refer s.4(1) for definition

Limited by both
shares and guarantee
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…cont
7

Obtain approval for the proposed name;
Lodge certain documents with SSM
(Suruhanjaya Syarikat Malaysia/ Companies
Commission Malaysia (CCM) ) including:
-

Defines the essential
company’s structure





Memorandum and Articles of Association;
Statutory declaration by promoters and directors;
Particulars of directors and registered office;
Declaration of compliance;
Statement of the allotment of shares

of

the

Name of the company
Company’s equity
Company’s liability
Object of the company

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9

10

Each company must have its object.

Alteration of the general provisions of the
Memorandum of Association to the extent and
manner provided by the CA - s.21.

The objects are stated in the Memorandum of
Association.

The company may, by special resolution, alter
the memorandum by altering or by deleting, the
provision, unless the memorandum itself
prohibits the alteration or deletion of that
provision - s.21A.

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components

8

3rd party who deals with the company may refer
to the company’s M&A which is deposited with
CCM.

Pay the registration fees

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The purpose:
• To define and limit the activities of the company.
• If there is discrepancy between the object and

its activities, thus such transaction is ultra vires
and void.

11

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12

2

BT20403/Company Law

By virtue of s.28(1) CA, the company may alter
the provision of its memorandum with respect to
the objects of the company.

If company’s activities inconsistent with the
object,...
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