Company Law

Topics: Corporation, Types of companies, Legal entities Pages: 47 (14500 words) Published: October 21, 2013
CHAPTER 1: BUSINESS ORGANIZATIONS
1.      What are three types of business organizations? i.                    Sole Proprietorship -          One man is in business for himself
-          No special rules governing sole proprietorship, -          Treated no differently from anyone else at law -          Use own to resources to provide skill, labor, capital, and other resources to run the business -          Unlimited liabilities

-          Registered under Registration of Business Act 1956

ii.                  Partnership
-          Exist when two or more persons pool their skills, labor, capital and other resources together to form a business jointly -          Under Partnership Act 1961
-          Applied English Court decision

iii.                Company
-          A business organization of two or more individuals -          Registered under Company Act 1965

2.      What are the sources of Malaysian Company Law?
i.                    Statutes (CT CS)
-          Companies Act 1965
-          Companies Regulation 1966
-          Securities Industry Act 1983
-          The Registration of Business Act 1956

ii.                  Judicial precedent/ common law -      Fundamental principles of company law which are based on judicial precedent and applicable in Malaysia, includes: o   Case: Solomon V Solomon & Co (1897), principles of separate legal entity or personality o   Case: Foss V Harbottle (1843), principles of Proper plaintiff and majority rule  o   Case: Royal British Bank V Turquand (1855), principle of indoor management rule

iii.                Common law, equity and acts of England -          By virtue S3 & S5 of the civil law act 1956 -          In certain situations, the law of England and several acts of England not though not passed as an act in Malaysia are applicable in Malaysia

3.      What are the comparison between company, partnership and sole proprietorship?

Company
Partnership
Sole Proprietorship
a.              Definition
Body of person combined for common object
2 or more person business
1 man business
b.             Formation
Under CA 1965
Easier,
no formalities,
registration fee is cheaper
Easier & economical,
No agreement necessary,
Registration fee is also cheaper
c.              Registration
With Registrar of The Company
Registration of Business Act 1956
Registration of Business Act 1956
d.             Special Law
Companies Law 1965
Partnership Act 1961
No special Act
e.              Separate entity
Separate legal entity
No separate entity, property of members is property of the partnership as well No separate entity
f.              Agency
Act of SH not bind the co
A partner is an agent of the partnership (S7) and binding the firm Not agent to his business
g.              Transferability of shares
Transferable but for private co it is under restrictions in sec 15. Cannot transfer without consent of other partners
May transfer to somebody else
h.             Management
Managed by BOD
Every partner entitled to take part of the firm
Manages himself and can employ employees to manage for him.
i.               Number of members
Pub- no limit
Priv.-max 50
Min 2 Max 20

Single person
j.               Liability of members
Limited
Unlimited
Unlimited
k.             Rule, procedure and information to public Subjected to regulations  by RoC, Court & Department of Trade & Industry No provision subjected
No provision subjected, accounts are never subject to public scrutiny l.               Death & bankruptcy
Does not affect the co.
Dissolves the partnership except agreement to that contrary
Automatically dissolves the business
m.           Dissolution
Formal –WU&L
Informal-Agree.
Informal-own

CHAPTER 2: CLASSIFICATION OF THE COMPANY
1.      What are the types of company according to liability of members? a.       Company limited by share
-          S4(1)
Liability of members limited...
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