SCHOOL OF BUSINESS STUDIES
DIPLOMA IN BUSINESS STUDIES (ACCOUNTING)
YEAR 3 - SEMESTER 1
ABBL 3144 CORPORATE LAW AND GOVERNANCE
LIEW MEI MEI
OOI TZE CHI
WONG YEE MUN
MS CHONG PIT KEE
DATE OF SUBMISSION:
17TH JUNE 2013
TABLE OF CONTENT
Table of Content
School of Business Studies
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: 50 marks (format = 5 marks and content = 45 marks)
Bryan, Sarah, Jason, Calvin and Rubini are interested in starting a travel agency specializing in tours around Sabah. They are keen in having an office at Damai, Kota Kinabalu and to hire a few staff. Their initial capital is RM30, 000 each. They are also planning to acquire MPV vans to cater to small groups of travelers. All of them agreed to be involved in the management of the business and to make decision together. However, they are seeking your advice as to which business structure would best serve their purpose. Advise Bryan, Sarah, Jason, Calvin and Rubini. (15 marks)
If they have decided to form a private limited company for their business, what are the things they need to consider in incorporating a company? They would like to use Friendly Tours Sdn Bhd as the name of their business. Also, they agreed to appoint Rubini as the Managing Director of the company for 5 years. Advise them in the drafting of the Memorandum and Article of Association. (15 marks)
In May 2013, they would like to expand their business in exporting fresh food and vegetables to Sarawak. They are not sure whether they are allowed to divert from their initial objective in travel agency business. They also would like to change their business name to Borneo Connection Sdn Bhd. In the recent meeting, Sarah was appointed as Managing Director of their business instead of Rubini as stated in the Article of Association. Advise Bryan, Sarah, Jason, Calvin and Rubini in the situations above. (15 marks)
There are three types of business structure which are sole proprietorship, partnership and company. Choosing the right type of business structure is one of the most important choices of all for which they have to make when starting a business. Not only will this decision has an impact on their liability, it will also affect their ability to raise capital, management and decision making rights. Since there are five people who are interested in starting new business, it is important for them to compare and choose whether a partnership or company will best suit to their purpose. According to Section 3(1) of Partnership Act 1961, a partnership is the relation which subsists between persons carrying on business in common with a view of profit. In other words, they must continuously carry on travel agency business and all partners agreed to operate the travelling business together with the intention to make profits from it. As for company, it is an artificial legal person who is bound by law to manage company. It is a separate legal entity for which its legal identity separates itself from its members, officers, employees and others who form the company. In term of management and decision making, there are two types of partners in partnership: dormant partner who is not participate in management of the firm and...
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Companies Act 1965 (Act 125) & Subsidiary Legislation. 2004. Kuala Lumpur: International Law Book Services.
Lee M. P. and Detta I. J. 2009. Business Law. Selangor: Oxford Fajar Sdn. Bhd.
Loganathan Krishnan, Parimaladevi Rajoo and Anne Chrishanthani Vergis. 2009. Principle of Business and Corporate Law, Malaysia. Singapore: CCH Asia Pte Limited.
Shanthy Rachagan, Janine Pascoe and Anil Joshi. 2010. Concise Principles of Company Law Malaysia. Second Edition. Selangor: Lexis Nexis.
Smith D. 1999. Company Law. United Kingdom: Taylor & Francis.
Zubaidah Zainal Abidin. 2004. Malaysian Company Secretarial Practice. Selangor: Prentice Hall.
[ 5 ]. Shanthy Rachagan, Janine Pascoe and Anil Joshi. 2010. Concise Principles of Company Law Malaysia. Second Edition. Selangor: Lexis Nexis. Pg. 23-25.
[ 16 ]. Shanthy Rachagan, Janine Pascoe and Anil Joshi. 2010. Concise Principles of Company Law Malaysia. Second Edition. Selangor: Lexis Nexis. Pg.92
[ 17 ]
[ 22 ]. Zubaidah Zainal Abidin. 2004. Malaysian Company Secretarial Practice. Selangor: Prentice Hall. Pg.158.
[ 29 ]. Smith D. 1999. Company Law. United Kingdom: Taylor & Francis. Pg.78.
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