COMPANIES ACT 1965 (REVISED - 1973)
(1) This Act may be cited as the Companies Act 1965 .
(2) (Omitted) .
(1) The written laws mentioned in the First Schedule to the extent to which they are therein expressed to be repealed or amended are hereby repealed or amended accordingly.
Transitory provisions
(2) Unless the contrary intention appears in this Act:
(a) all persons things and circumstances appointed or created by or under any of the repealed or amended written laws or existing or continuing under any of such written laws immediately before the commencement of this Act shall under and subject to this Act continue to have the same status operation and effect as they respectively would have had if those written laws had not been so repealed or amended; and
(b) in particular and without affecting the generality of the foregoing paragraph, such repeal shall not disturb the continuity of status, operation or effect of any Order in Council, order, rule, regulation, scale of fees, appointm
4 PART I PRELIMINARY-4. Interpretation.
(1) In this Act, unless the contrary intention appears:
"accounting records" , in relation to a corporation, includes invoices, receipts, orders for payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry and also includes such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up;
"accounts" means profit and loss accounts and balance sheets and includes notes or statements required by this Act (other than auditors' reports or directors' reports) and attached or intended to be read with profit and loss accounts or balance sheets;
"annual general meeting" , in relation to a company, means a meeting of the company required to be held by section 143;
5 PART I PRELIMINARY-5. Definition of subsidiary and holding company.
(1) For the purposes of this Act, a corporation shall, subject to subsection (3), be deemed to be a subsidiary of another corporation, if:
(a) that other corporation:
(i) controls the composition of the board of directors of the first-mentioned corporation;
(ii) controls more than half of the voting power of the first-mentioned corporation; or
(iii) holds more than half of the issued share capital of the first-mentioned corporation (excluding any part thereof which consists of preference shares); or
(b) the first-mentioned corporation is a subsidiary of any corporation which is that other corporation's subsidiary.
(2) For the purposes of subsection (1), the composition of a corporation's board of directors shall be deemed to be controlled by another corporation if that other corporation by the exercise of some power exercisable by it
5A PART I PRELIMINARY-5A. Definition of ultimate holding company.
For the purposes of this Act, a corporation shall be deemed to be the ultimate holding company of another corporation if:
(a) the other corporation is a subsidiary of the first-mentioned corporation; and
(b) the first-mentioned corporation is not itself a subsidiary of any corporation.
5B PART I PRELIMINARY-5B. DEFINITION of wholly-owned subsidiary.
For the purposes of this Act, a corporation shall be deemed to be a wholly-owned subsidiary of another corporation if none of the members of the first-mentioned corporation is a person other than:
(a) the second-mentioned corporation;
(b) a nominee of the second-mentioned corporation;
(c) a subsidiary of the second-mentioned corporation, being a subsidiary none of the members of which is a person other than the second-mentioned corporation or a nominee of the second-mentioned corporation; or
(d) a nominee of such a subsidiary.
6 PART I PRELIMINARY-6. When corporations deemed to be related to each other.
Where a corporation:
(a) is the holding company of another corporation;
(b) is a subsidiary of another corporation; or
(c) is a subsidiary of the holding company of another corporation,
that first-mentioned corporation and that other corporation shall for the purposes of this Act be deemed to be related to each other.
6A PART I PRELIMINARY-6A. Interests in shares.
(1) The following subsections have effect for the purposes of Division 3A of Part IV, sections 134 and 135.
(2) Where any property held in trust consists of or includes shares in which a person knows or has reasonable grounds for believing that he has an interest, he shall be deemed to have an interest in those shares.
(3) A right does not constitute an interest in a share where:
(a) a right (being a right or an interest described in the definition of "interest" in section 84) was issued or offered to the public for subscription or purchase;
(b) the public was invited to subscribe for or purchase such a right, and the right was so subscribed for or purchased;
[Am. by Act A1081]
(c) such a right is held by the management company and was issued for the purpose of an offer to the public within the meaning of section 84; or
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7 PART II ADMINISTRATION OF ACT-7. Registrar of Companies, etc.
(1) The Chief Executive Officer of the Commission shall be the Registrar of Companies.
[Subs. by Act A1118]
(1A) The Commission may appoint, on such terms and conditions as it may determine, from amongst persons in the employment of the Commission such number of Regional Registrars, Deputy Registrars, Assistant Registrars, clerks and servants for the proper administration of this Act, and may revoke the appointment of any person so appointed or deemed to have been so appointed under subsection (1B).
[Ins. by Act A1118]
(1B) The persons holding office as Regional Registrars, Deputy Registrars, Assistant Registrars, clerks and servants under this Act before the appointed date who were given an option by the Government of Malaysia and have opted to serve as employees of the Commission shall, on the appointed date, be deemed to have been appointed Regional Registrars, Deputy Regi
7A PART II ADMINISTRATION OF ACT-7A. Power of Minister to exempt from payment of fees.
The Minister may, by order published in the Gazette , exempt any statutory body or government agency from paying any or all of the fees specified in the Second Schedule or prescribed under this Act.
7B PART II ADMINISTRATION OF ACT-7B. Power to conduct inspection.
(1) For the purpose of ascertaining whether a corporation or any officer of a corporation is complying with this Act, the Registrar may have access to any place or building and may inspect and make copies of or take extracts from any book, minute book, register or document required by or under this Act to be kept by the corporation.
(2) For the purposes of this section, the Registrar may by notice in writing require any officer of a corporation or any person to produce to him such books, registers or documents as are in the custody or under the control of that officer or person.
(3) A corporation which, any officer of the corporation or any person who:
(a) fails to produce any such books, registers or documents as required by the Registrar under this section; or
(b) obstructs or hinders the Registrar while exercising any of the powers under this section,
shall be guilt
7C PART II ADMINISTRATION OF ACT-7C. Power to conduct investigation.
(1) Where the Registrar has reason to suspect that a person has committed an offence against this Act, he may make such investigation as he thinks expedient for the due administration of this Act.
(2) Whenever it appears to any Magistrate upon written information and after such enquiry as he thinks necessary, that there is reasonable cause to believe that in any place or building there is any object, article, material, thing, accounts, book or other document including any travel or other personal document, which may be used as evidence of the commission of an offence against this Act, he may by warrant empower the Registrar to enter the place or building, by force if necessary, and there to search for, seize, take possession of and detain any such object, article, material, thing, accounts, book or other document.
(3) Whenever it appears to the Registrar that there is reasonable cause to believe that in any place or building there is co
7D PART II ADMINISTRATION OF ACT-7D. Power to call for examination.
(1) For the purpose of any investigation under section 7C, the Registrar may by notice in writing require any person supposed to be acquainted with the facts and circumstances of the case to appear before him and to be examined orally and shall reduce into writing any statement made by the person so examined.
(2) Such person shall be legally bound to answer all questions relating to such case put to him by the Registrar and to state the truth, whether or not the statement is made wholly or partly in answer to questions, and shall not refuse to answer any question on the ground that it tends to incriminate him.
(3) A statement made by any person under this section shall be taken down in writing and signed by the person making it or affixed with his thumb print, as the case may be, after it has been read to him and after he had been given an opportunity to make any correction he may wish:
Provided that where the person examined re
8 PART II ADMINISTRATION OF ACT-8. Company auditors and liquidators to be approved by Minister charged with responsibility for finance.
(1) Any person may apply to the Minister charged with responsibility for finance to be approved as a company auditor for the purposes of this Act.
(2) The Minister charged with responsibility for finance may, if he is satisfied that the applicant is of good character and competent to perform the duties of an auditor under this Act, upon payment of the prescribed fee, approve the applicant as a company auditor.
(3) Any approved company auditor may apply to the Minister charged with responsibility for finance to be approved as a liquidator for the purposes of this Act, and the Minister, if satisfied as to the experience and capacity of the applicant, may on payment of the prescribed fee approve such person as a liquidator for the purposes of this Act.
(4) Any approval granted by the Minister charged with responsibility for finance pursuant to this section may be made subject to such limitations or conditions as he thinks fit and m
9 PART II ADMINISTRATION OF ACT-9. Company auditors.
(1) A person shall not knowingly consent to be appointed, and shall not knowingly act, as auditor for any company and shall not prepare, for or on behalf of a company, any report required by this Act to be prepared by an approved company auditor:
(a) if he is not an approved company auditor;
(b) if he is indebted to the company or to a corporation that is deemed to be related to that company by virtue of section 6 in an amount exceeding two thousand five hundred ringgit;
(c) if he is:
(i) an officer of the company;
(ii) a partner, employer or employee of an officer of the company;
(iii) a partner or employee of an employee of an officer of the company; or
(iv) a shareholder or his spouse is a shareholder of a corporation whose employee is an officer of the company; or
(d) if he is responsible for or if he is the pa
10 PART II ADMINISTRATION OF ACT-10. Disqualification of liquidators.
(1) Subject to this section a person shall not, except with the leave of the Court, consent to be appointed, and shall not act, as liquidator of a company:
(a) if he is not an approved liquidator;
(b) if he is indebted to the company or to a corporation that is deemed to be related to the company by virtue of section 6 in an amount exceeding two thousand five hundred ringgit;
(c) if he is:
(i) an officer of the company;
(ii) a partner, employer or employee of an officer of the company; or
(iii) a partner or employee of an employee of an officer of the company;
(d) if he becomes bankrupt;
(e) if he assigns his estate for the benefit of his creditors or makes an arrangement with his creditors pursuant to any law relating to bankruptcy; or
(f) if he is convicted of an offence involving fraud
11 PART II ADMINISTRATION OF ACT-11. Registers.
(1) The Registrar shall, subject to this Act, keep such registers as he considers necessary in such form as he thinks fit.
Inspection of register.
(2) Any person may, on payment of the prescribed fee:
(a) inspect any document filed or lodged with the Registrar not being a document that has been destroyed or otherwise disposed of under subsection (11);
(b) require a certificate of the incorporation of any company or any other certificate issued under this Act; or
(c) require a copy or extract from any document that he is entitled to inspect pursuant to paragraph (a) or any certificate referred to in paragraph (b) to be given or given and certified by the Registrar.
(3) If a reproduction or transparency of a document or certificate is produced for inspection, a person is not entitled pursuant to paragraph 2 (a) to requ
11A PART II ADMINISTRATION OF ACT-11A. Electronic filing of documents.
(1) The Registrar may provide a service for the electronic filing or lodging of documents required by this Act to be filed or lodged with the Registrar.
(2) A person who intends to use the service provided under subsection (1) shall become a subscriber to the service by paying the prescribed fee and by complying with such terms and conditions as may be determined by the Registrar.
(3) Only a subscriber to the service provided under subsection (1) may electronically file or lodge documents with the Registrar.
(4) A document electronically filed or lodged under this section shall be deemed to have satisfied the requirement for filing or lodgment if the document is communicated or transmitted to the Registrar in such manner as may be prescribed by regulations or approved by the Registrar.
(5) The Registrar may, by order published in the Gazette, prescribe the documents that may be electronically filed or lodged.
(6)
11B PART II ADMINISTRATION OF ACT-11B. Issuing document electronically.
The Registrar may, by electronic means, issue any document which is to be issued by him under this Act.
[Ins. by Act A1299]
11C PART II ADMINISTRATION OF ACT-11C. Information certified by Registrar admissible as evidence.
Any information supplied by the Registrar which is certified under his hand and seal to be a true extract from any document filed or lodged with or submitted to the Registrar under subsection 11A(1) or issued by the Registrar under section 11B shall in any proceedings be admissible in evidence and be presumed, unless evidence to the contrary is adduced, to be a true extract from such document.
[Ins. by Act A1299]
12 PART II ADMINISTRATION OF ACT-12. Enforcement of duty to make returns.
(1) If a corporation or person, having made default in complying with:
(a) any provision of this Act or of any other law which requires the lodging or filing in any manner with the Registrar or the Official Receiver of any return, account or other document or the giving of notice to him of any matter; or
(b) any request of the Registrar or the Official Receiver to amend or complete and re-submit any document or to submit a fresh document,
fails to make good the default within fourteen days after the service on the corporation or person of a notice requiring it to be done, the Court or any Sessions Court may, on an application by any member or creditor of the corporation or by the Registrar or the Official Receiver, make an order directing the corporation and any officer thereof or that person to make good the default within such time as is specified in the order.
(2) Any such
13 PART II ADMINISTRATION OF ACT-13. Relodging of lost registered documents.
(1) If in the case of any corporation incorporated or registered under this or any corresponding previous written law the memorandum or articles or any other document relating to the corporation filed or lodged with the Registrar has been lost or destroyed, the corporation may apply to the Registrar for leave to lodge a copy of the document as originally filed or lodged.
(2) On such application being made the Registrar may direct notice thereof to be given to such persons and in such manner as he thinks fit.
(2A) Where the Registrar has reasonable cause to believe that a document in relation to a corporation filed or lodged with him has been lost or destroyed, he may by notice in writing direct the corporation to lodge a copy of the document and the corporation or any officer of the corporation shall, within fourteen days after the service of the notice or such longer period as the Registrar may allow, comply with the direction of the R
14 PART III CONSTITUTION OF COMPANIES Division 1 - Incorporation-14. Formation of companies.
(1) Subject to this Act any two or more persons associated for any lawful purpose may by subscribing their names to a memorandum and complying with the requirements as to registration form an incorporated company.
(2) A company may be:
(a) a company limited by shares;
(b) a company limited by guarantee;
(c) a company limited both by shares and guarantee; or
(d) an unlimited company.
Prohibition of unincorporated associations of more than twenty members for gain.
(3) An association or partnership shall not be formed for the purpose of carrying on any business which has for its object the acquisition of gain by the association or partnership or the individual members thereof unless:
(a) it is an association or partnership formed for the purpose of carrying on any profession or calling which is decla
14A PART III CONSTITUTION OF COMPANIES Division 1 - Incorporation-14A. Prohibition of registration of company limited by guarantee with a share capital.
On or after the coming into operation of this Act, no company may be formed as, or become, a company limited by guarantee with a share capital.
15 PART III CONSTITUTION OF COMPANIES Division 1 - Incorporation-15. Private company.
(1) A company having a share capital may be incorporated as a private company if its memorandum or articles:
(a) restricts the right to transfer its shares;
(b) limits to not more than fifty the number of its members (counting joint holders of shares as one person and not counting any person in the employment of the company or of its subsidiary or any person who while previously in the employment of the company or of its subsidiary was and thereafter has continued to be a member of the company);
(c) prohibits any invitation to the public to subscribe for any shares in or debentures of the company; and
(d) prohibits any invitation to the public to deposit money with the company for fixed periods or payable at call, whether bearing or not bearing interest.
(2) Where, upon the commencement of this Act, neither the memorandum nor articles of a company tha
16 PART III CONSTITUTION OF COMPANIES Division 1 - Incorporation-16. Registration and incorporation.
(1) Persons desiring the incorporation of a company shall lodge the memorandum and the articles, if any, of the proposed company with the Registrar together with the other documents required to be lodged by or under this Act, and the Registrar on payment of the appropriate fees shall, subject to this Act, register the company by registering the memorandum and articles, if any.
Statutory declarations.
(2) The person named in the articles as the first secretary of the company shall lodge with the Registrar a declaration in the prescribed form stating that all or any of the requirements of this Act have been complied with and containing such information as may be prescribed, and the Registrar may accept such a declaration as sufficient evidence of compliance.
[Subs. by Act A1022]
(3) [Deleted by Act A836].
Subscriber to lodge statutory declaration.
(3A) Every
17 PART III CONSTITUTION OF COMPANIES Division 1 - Incorporation-17. Membership of holding company.
(1) A corporation cannot be a member of a company which is its holding company, and any allotment or transfer of shares in a company to its subsidiary shall be void.
(2) Subsection (1) shall not apply where the subsidiary is concerned as personal representative, or where it is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.
(3) This section shall not prevent a subsidiary which is, at the commencement of this Act, a member of its holding company, from continuing to be a member but, subject to subsection (2), the subsidiary shall have no right to vote at meetings of the holding company or any class of members thereof.
(4) This section shall not prevent a subsidiary from continuing to be a me
18 PART III CONSTITUTION OF COMPANIES Division 1 - Incorporation-18. Requirements as to memorandum.
(1) The memorandum of every company shall be printed and divided into numbered paragraphs and dated and shall state, in addition to other requirements:
(a) the name of the company;
(b) the objects of the company;
(c) unless the company is an unlimited company, the amount of share capital, if any, with which the company proposes to be registered and the division thereof into shares of a fixed amount;
(d) if the company is a company limited by shares, that the liability of the members is limited;
(e) if the company is a company limited by guarantee, that the liability of the members is limited and that each member undertakes to contribute to the assets of the company, in the event of its being wound up while he is a member or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to
19 Division 2 - Powers-19. Powers of a company.
(1) Subject to subsection (2) the powers of a company, whether incorporated before or after the commencement of this Act, shall include:
(a) power to make donations for patriotic or for charitable purposes;
(b) power to transact any lawful business in aid of Malaysia in the prosecution of any war or hostilities in which Malaysia is engaged; and
(c) unless expressly excluded or modified by the memorandum or articles, the powers set forth in the Third Schedule but the powers of a company which has by the licence of the Minister pursuant to section 24 been registered without the word "Berhad" or pursuant to any corresponding previous written law been registered without the addition of the word "Limited" to its name shall not include any of the powers set forth in the Third Schedule unless expressly included in the memorandum or articles with the approval in writing of the Minister.
20 Division 2 - Powers-20. Ultra vires transactions.
(1) No act or purported act of a company (including the entering into of an agreement by the company and including any act done on behalf of a company by an officer or agent of the company under any purported authority, whether express or implied, of the company) and no conveyance or transfer of property, whether real or personal, to or by a company shall be invalid by reason only of the fact that the company was without capacity or power to do the act or to execute or take the conveyance or transfer.
(2) Any such lack of capacity or power may be asserted or relied upon only in:
(a) proceedings against the company by any member of the company or, where the company has issued debentures secured by a floating charge over all or any of the company's property, by the holder of any of those debentures or the trustee for the holders of those debentures to restrain the doing of any act or acts or the conveyance or transfe
21 Division 2 - Powers-21. General provisions as to alteration of memorandum.
(1) The memorandum of a company may be altered to the extent and in the manner provided by this Act but not otherwise.
(1A) Notwithstanding subsection (1) and subject to section 33 and section 181, if a provision of the memorandum of a company could lawfully have been contained in the articles of the company, the company may, by special resolution, alter the memorandum:
(a) by altering; or
(b) by deleting,
the provision, unless the memorandum itself prohibits the alteration or deletion of that provision.
(1B) Nothing in subsection (1A) permits the alteration or deletion of a provision of the memorandum that relates to rights to which only members included in a particular class of members are entitled.
(2) In addition to observing and subject to any other provision of this Act requiring the lodging with the Registrar of any resolution of a company or order of th
22 Division 2 - Powers-22. Names of companies.
(1) Except with the consent of the Minister, a company shall not be registered by a name that, in the opinion of the Registrar, is undesirable or is a name, or a name of a kind, that the Minister has directed the Registrar not to accept for registration.
(2) The Minister shall cause a direction given by him under subsection (1) to be published in the Gazette .
(3) A limited company shall have "Berhad" or the abbreviation "Bhd." as part of and at the end of its name.
(4) A private company shall have the word "Sendirian" or the abbreviation "Sdn." as part of its name, inserted immediately before the word "Berhad" or before the abbreviation "Bhd." or in the case of an unlimited company, at the end of its name.
(5) It shall be lawful to use and no description of a company shall be deemed inadequate or incorrect by reason of the use of:
(a)
23 Division 2 - Powers-23. Change of name.
(1) A company may by special resolution resolve that its name should be changed to a name by which the company could have been registered without contravention of subsection 22 (1).
(2) If the Registrar approves the name which the company has resolved should be its new name he shall on payment of the prescribed fee issue a certificate of incorporation of the company under the new name and upon the issue of such certificate of incorporation the change of name shall become effective.
(3) If the name of a company is (whether through inadvertence or otherwise and whether originally or by change of name) a name by which the company could not be registered without contravention of subsection 22(1) the company may by special resolution change its name to a name by which the company could be registered without contravention of that subsection and, if the Registrar so directs, shall so change it within six weeks after the date of the direction o
24 Division 2 - Powers-24. Omission of "Berhad" in name of charitable and other companies.
(1) Where it is proved to the satisfaction of the Minister that a proposed limited company is being formed for the purpose of providing recreation or amusement or promoting commerce, industry, art, science, religion, charity, pension or superannuation schemes or any other object useful to the community, and will apply its profits, if any, or other income in promoting its objects and will prohibit the payment of any dividend to its members, the Minister may (after requiring, if he thinks fit, the proposal to be advertised in such manner as he directs either generally or in a particular case) by licence direct that it be registered as a company with limited liability without the addition of the word "Berhad" to its name, and the company may be registered accordingly.
(2) Where it is proved to the satisfaction of the Minister:
(a) that the objects of a limited company are restricted to those specified in subs
25 Division 2 - Powers-25. Registration of unlimited company as limited, etc.
(1) Subject to this section, an unlimited company may convert to a limited company by passing a special resolution determining so to convert and lodging with the Registrar for registration a copy of the resolution.
(2) On the lodging of the copy of the resolution the Registrar shall, subject to this Act:
(a) register the copy;
(b) make such endorsements in or alterations to his registers as are necessary to record the effect of the resolution with respect to the conversion; and
(c) issue to the company a certificate of incorporation of the company altered to meet the circumstances of the case and cancel the previous certificate of incorporation of the company.
(3) On issuing the certificate of incorporation the Registrar may, by notice in writing served on the company, dispense with the lodging by the company of any document which had been lodged with him on t
26 Division 2 - Powers-26. Change from public to private and from private to public company.
(1) A public company having a share capital may convert to a private company by lodging with the Registrar a copy of a special resolution:
(a) determining to convert to a private company and specifying an appropriate alteration to its name; and
(b) altering the provisions or its memorandum or articles so far as is necessary to impose the restrictions, limitations and prohibitions referred to in subsection 15(1).
(2) A private company may, subject to anything contained in its memorandum or articles, convert to a public company by lodging with the Registrar:
(a) a copy of a special resolution determining to convert to a public company and specifying an appropriate alteration to its name;
(b) a statement in lieu of prospectus; and
(c) a statutory declaration in the prescribed form verifying that paragraph 52(2) (b)
27 Division 2 - Powers-27. Default in complying with requirements as to private companies.
(1) Where, on the application of the Minister with respect to a private company or of any member or creditor of a private company, the Court is satisfied that default has been made in relation to the company in complying with a prohibition of a kind specified in paragraph 15 (1) (c) or (d) that is included, or is deemed to be included, in the memorandum or articles of the company the Court may by order determine that, on such date as the Court specifies in its order, the company ceased to be a private company.
(2) Where:
(a) default has been made in relation to a private company in complying with a limitation of a kind specified in paragraph 15(1) (b) that is included, or is deemed to be included, in the memorandum or articles of the company,
(b) a private company has been convicted of an offence under subsection (7);
(c) the memorandum or articles of a pr
28 Division 2 - Powers-28. Alterations of objects in memorandum.
(1) Subject to this section a company may by special resolution alter the provisions of its memorandum with respect to the objects of the company.
(2) Where a company proposes to alter its memorandum, with respect to the objects of the company it shall give by post twenty-one days' written notice specifying the intention to propose the resolution as a special resolution and to submit it for passing to a meeting of the company to be held on a day specified in the notice.
(3) The notice shall be given to all members, and to all trustees for debenture holders and if there are no trustees for any class of debenture holders to all debenture holders of that class whose names are, at the time of the posting of the notice, known to the company.
(4) The Court may, in the case of any person or class of persons for such reasons as to it seem sufficient, dispense with the notice required by subsection (2).
(5) If an application for
29 Division 2 - Powers-29. Articles of association.
(1) There may in the case of a company limited by shares and there shall in the case of a company limited by guarantee or limited both by shares and guarantee or an unlimited company be registered with the memorandum, articles signed by the subscribers to the memorandum prescribing regulations for the company.
(2) Articles shall be:
(a) printed;
(b) divided into numbered paragraphs; and
(c) signed by each subscriber to the memorandum in the presence of at least one witness (not being another subscriber) who must attest the signature and add his address.
(3) In the case of an unlimited company the articles, if the company has a share capital, shall state the amount of share capital with which the company proposes to be registered and the division thereof into shares of a fixed amount.
(4) In the case of an unlimited company or a company limited by guara
30 Division 2 - Powers-30. Adoption of Table A of Fourth Schedule.
(1) Articles may adopt all or any of the regulations contained in Table A.
(2) In the case of a company limited by shares incorporated after the commencement of this Act, if articles are not registered, or if articles are registered then so far as the articles do not exclude or modify the regulations contained in Table A those regulations shall so far as applicable be the articles of the company in the same manner and to the same extent as if they were contained in registered articles.
31 Division 2 - Powers-31. Alteration of articles.
(1) Subject to this Act and to any conditions in its memorandum, a company may by special resolution alter or add to its articles.
(2) Any alteration or addition so made in the articles shall, subject to this Act, on and from the date of the special resolution or such later date as is specified in the resolution, be as valid as if originally contained therein and be subject in like manner to alteration by special resolution.
(3) Subject to this section, any company shall have the power and shall be deemed always to have had the power to amend its articles by the adoption of all or any of the regulations contained in Table A, by reference only to the regulations in the Table or to the numbers of particular regulations contained therein, without being required in the special resolution effecting the amendment to set out the text of the regulations so adopted.
32 Division 2 - Powers-32. As to memorandum and articles of companies limited by guarantee.
(1) In the case of a company limited by guarantee and not having a share capital every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member shall be void.
(2) For the purposes of this Act relating to the memorandum of a company limited by guarantee and of this section, every provision in the memorandum or articles or in any resolution of a company limited by guarantee purporting to divide the undertaking of the company into shares or interests shall be treated as a provision for a share capital not withstanding that the nominal amount or number of the shares or interests is not specified thereby.
33 Division 2 - Powers-33. Effect of memorandum and articles.
(1) Subject to this Act the memorandum and articles shall when registered bind the company and the members thereof to the same extent as if they respectively had been signed and sealed by each member and contained covenants on the part of each member to observe all the provisions of the memorandum and of the articles.
(2) All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.
As to effect of alterations on members who do not consent.
(3) Notwithstanding anything in the memorandum or articles of a company no member of the company, unless either before or after the alteration is made he agrees in writing to be bound thereby, shall be bound by an alteration made in the memorandum or articles after the date on which he became a member so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on whic
34 Division 2 - Powers-34. Copies of memorandum and articles.
(1) A company shall on being so required by any member send to him a copy of the memorandum and of the articles, if any, subject to payment of five ringgit or such lesser sum as is fixed by the directors.
(2) Where an alteration is made in the memorandum or articles of a company, a copy of the memorandum or articles shall not be issued by the company after the date of alteration unless:
(a) the copy is in accordance with the alteration; or
(b) a printed copy of the order or resolution making the alteration is annexed to the copy of the memorandum or articles and the particular clauses or articles affected are indicated in ink.
(3) Where an agreement required to be lodged with the Registrar under section 154 affects the memorandum or articles of a company, a copy of the memorandum or articles shall not be issued by the company after the agreement is entered into unless a copy o
35 Division 2 - Powers-35. Form of contracts.
(1) Any contract or other transaction purporting to be entered into by a company prior to its formation or by any person on behalf of a company prior to its formation may be ratified by the company after its formation and thereupon the company shall become bound by and entitled to the benefit thereof as if it had been in existence at the date of the contract or other transaction and had been a party thereto.
(2) Prior to ratification by the company the person or persons who purported to act in the name or on behalf of the company shall in the absence of express agreement to the contrary be personally bound by the contract or other transaction and entitled to the benefit thereof
(3) [Deleted by Act A616] .
(4) Contracts on behalf of a company may be made as follows:
(a) a contract which if made between private persons would be by law required to be in writing under seal may be made on behalf
36 Division 2 - Powers-36. Prohibition of carrying on business with fewer than statutory minimum of members.
If at any time the number of members of a company (other than a company the whole of the issued shares of which are held by a holding company) is reduced below two and it carries on business for more than six months while the number is so reduced, a person who is a member of the company during the time that it so carries on business after those six months and is cognizant of the fact that it is carrying on business with fewer than two members shall be liable for the payment of all the debts of the company contracted during the time that it so carries on business after those six months and may be sued therefor, and the company and that member shall be guilty of an offence against this Act if the company so carries on business after those six months.
Penalty: Two thousand ringgit. Default penalty.
36A PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-36A. Non-application of Divisions 1 and 4 to offers under the Securities Commission Act 1993.
(1) In this section, unless the contrary intention appears:
"borrower" has the same meaning as is assigned to that word in the Securities Commission Act 1993;
"excluded offer or invitation" means the offer or invitation referred to in section 38 of the Securities Commission Act 1993;
"guarantor" has the same meaning as is assigned to that word in the Securities Commission Act 1993. (2) Except as provided in subsection (3), on the coming into operation of this section, Divisions 1 and 4 of this Part shall not apply to an offer or invitation to subscribe for or purchase any securities of a corporation, including any excluded offer or excluded invitation as defined under the Securities Commission Act 1993, and any offer for subscription or purchase of, or invitation t
37 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-37. Requirement to issue form of application for shares or debentures with a prospectus.
(1) A person shall not issue, circulate or distribute any form of application for shares in or debentures of a corporation unless the form is issued, circulated or distributed together with a prospectus, a copy of which has been registered by the Registrar.
Penalty: Imprisonment for five years or one hundred thousand ringgit or both.
(2) Subsection (1) shall not apply if:
(a) the form of application is issued, circulated or distributed in connection with shares or debentures which are not offered to the public;
(b) the form of application is issued, circulated or distributed in connection with a take-over offer which complies with the provisions of the relevant law applicable to such offers; or
(c) the form of application is issued, circulated or distributed in connection with shares which are offered for purchase or subscription by employees of a corporation or its related
38 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-38. As to invitations to the public to lend money to or to deposit money with a corporation.
(1) An invitation to the public to deposit money with or lend money to a corporation or proposed corporation shall not be issued, circulated or distributed by the corporation or by any other person unless:
(a) a prospectus in relation to the invitation has been registered by the Registrar;
(b) the prospectus contains an undertaking by the corporation that it will within two months after the acceptance of any money as a deposit or loan from any person in response to the invitation issue to that person a document which acknowledges or evidences or constitutes an acknowledgment of the indebtedness of the corporation in respect of that deposit or loan; and
(c) the document is described or referred to in the prospectus and in any other document whether constituting or relating to the invitation as:
(i) an unsecured note or an unsecured deposit note;
(ii) a mortgage
39 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-39. Contents of prospectus.
(1) To comply with the requirements of this Act a prospectus:
(a) shall be printed in type of a size not less than the type known as eight point Times unless the Registrar, before the issuing, advertising, circulating or distributing of the prospectus in Malaysia, certifies in writing, that the type and size of letters are legible and satisfactory;
(b) shall be dated and that date shall, unless the contrary is proved, be taken as the date of issue of the prospectus;
(c) shall as to one copy be lodged with the Registrar and shall state that a copy of the prospectus has been so lodged with and registered by the Registrar and shall also state immediately after that statement that the Registrar takes no responsibility as to its contents;
(d) shall subject to Part III of the Fifth Schedule state the matters specified in Part I of that Schedule and set out the reports specified
39A PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-39A. [Deleted by Act A1081].
[Deleted by Act A1081] .
39B PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-39B. Relief from requirements as to form and content of a prospectus.
(1) Without prejudice to subsection 37(2), the Registrar may, on the application in writing by any person referred to under subsection 37(1), make an order reliving him or approving any variation from the requirements of this Act relating to the form and content of a prospectus.
(2) In making an order under subsection (1), the Registrar may impose such terms and conditions as he deems fit.
(3) The Registrar shall not make an order under subsection (1) unless he is satisfied, having considered the nature and objectives of the corporation, that:
(a) such relief or variation shall not cause the non-disclosure to the public of information necessary for the assessment of the investment in the shares or debentures of the corporation, as the case may be; and
(b) compliance with the requirements, for which such relief or variation is applied for, would impose unreasonable burden on the applicant.
40 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-40. Certain advertisements deemed to be prospectuses.
(1) Every advertisement offering or calling attention to an offer or intended offer of shares in or debentures of a corporation or proposed corporation to the public for subscription or purchase shall be deemed to be a prospectus (and all written laws and rules of law as to the contents of prospectuses and as to liability in respect of statements in and omissions from prospectuses or otherwise relating to prospectuses shall apply and have effect accordingly) if it contains any information or matter other than the following:
(a) the number and description of the shares or debentures concerned;
(b) the name and date of registration of the corporation and its paid up share capital;
(c) a concise statement of the general nature of the main business or proposed main business of the corporation;
(d) the names, addresses and occupations of:
(i) the directors
41 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-41. As to retention of over-subscriptions in debenture issues.
(1) A corporation shall not accept or retain subscriptions to a debenture issue in excess of the amount of the issue as disclosed in the prospectus unless the corporation has specified in the prospectus:
(a) that it expressly reserves the right to accept or retain over-subscriptions; and
(b) a limit expressed as a specific sum of money on the amount of over-subscriptions that may be accepted or retained being an amount not more than twenty-five per centum in excess of the amount of the issue as disclosed in the prospectus.
As to statement of asset-backing.
(2) Subject to the Fifth Schedule where a corporation specifies in a prospectus relating to a debenture issue that it reserves the right to accept or retain over-subscriptions:
(a) the corporation shall not make, authorize or permit any statement of or reference as to the asset-backing
42 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-42. Registration of prospectus.
(1) A prospectus shall not be issued, circulated or distributed by any person unless a copy thereof has first been registered by the Registrar.
(2) The Registrar shall not register a copy of any prospectus if it contains any statement or matter which is in his opinion misleading in the form and context in which it is included and unless:
(a) the copy signed by every director and by every person who is named therein as a proposed director of the corporation or by his agent authorized in writing is lodged with the Registrar on or before the date of its issue;
(b) the prospectus appears to comply with the requirements of this Act; and
(c) there are also lodged with the Registrar copies verified as prescribed of any consents required by section 45 to the issue of the prospectus.
(3) If a prospectus is issued without a copy thereof having been so registered the cor
42A PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-42A. Supplemental prospectus.
(1) If, after the registration of a prospectus, but before its issue, the person who lodged the prospectus became aware that:
(a) a significant new matter has arisen being a matter, the information of which is required by this Act or by any requirements or guidelines of any authority, to be disclosed in a prospectus;
(b) there has been a significant change affecting a matter disclosed in the prospectus
(c) the prospectus contained a material statement that is false or misleading; or
(d) there is a material omission from the prospectus,
the person shall lodge with the Registrar a supplemental prospectus that contains information relating to the new matter or change or correct the false or misleading statement or omission as the case requires.
(2) A supplemental prospectus shall clearly identify the prospectus to which it relates and shall conta
43 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-43. Document containing offer of shares for sale to be deemed prospectus.
(1) Where a corporation allots or agrees to allot to any person any shares in or debentures of the corporation with a view to all or any of them being offered for sale to the public, any document by which the offer for sale to the public is made shall for all purposes be deemed to be a prospectus issued by the corporation, and all written laws and rules of law as to the contents of prospectuses and to liability in respect of statements and non-disclosures in prospectuses, or otherwise relating to prospectuses, shall apply and have effect accordingly as if the shares or debentures had been offered to the public and as if persons accepting the offer in respect of any shares or debentures were subscribers therefor but without prejudice to the liability, if any, of the persons by whom the offer is made, in respect of statements or non-disclosures in the document or otherwise.
(2) For the purposes of this Act it shall, unless the contrary is proved,
44 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-44. [Deleted by Act A1081].
[Deleted by Act A1081] .
45 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-45. Expert's consent to issue of prospectus containing statement by him.
(1) A prospectus inviting subscription for or purchase of shares in or debentures of a corporation and including a statement purporting to be made by an expert or to be based on a statement made by an expert shall not be issued unless:
(a) he has given, and has not before delivery of a copy of the prospectus for registration withdrawn, his written consent to the issue thereof with the statement included in the form and context in which it is included; and
(b) there appears in the prospectus a statement that he has given and has not withdrawn his consent.
(2) If any prospectus is issued in contravention of this section the corporation and every person who is knowingly a party to the issue thereof shall be guilty of an offence against this Act.
Penalty: Imprisonment for five years or one hundred thousand ringgit or both.
46 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-46. Civil liability for misstatements in prospectus.
(1) Subject to this section, each of the following persons shall be liable to pay compensation to all persons who subscribe for or purchase any shares or debentures on the faith of a prospectus for any loss or damage sustained by reason of any untrue statement therein, or by reason of the wilful non-disclosure therein of any matter of which he had knowledge and which he knew to be material, that is to say every person who:
(a) is a director of the corporation at the time of the issue of the prospectus;
(b) authorized or caused himself to be named and is named in the prospectus as a director or as having agreed to become a director either immediately or after an interval of time;
(c) is a promoter of the corporation; or
(d) authorized or caused the issue of the prospectus.
(2) Notwithstanding anything in subsection (1), where the consent of an expert i
47 PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-47. Criminal liability for statement in prospectus.
(1) Where in a prospectus there is any untrue statement or wilful non-disclosure, any person who authorized or caused the issue of the prospectus shall be guilty of an offence against this Act unless he proves either that the statement or non-disclosure was immaterial or that he had reasonable ground to believe and did, up to the time of the issue of the prospectus, believe the statement was true or the non-disclosure immaterial.
Penalty: Imprisonment for five years or one hundred thousand ringgit.
(2) A person shall not be deemed to have authorized or caused the issue of a prospectus by reason only of his having given the consent required by this Division to the inclusion therein of a statement purporting to be made by him as an expert.
47A PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-47A. Power of Minister to exempt.
(1) Subject to subsection (2) the Minister may, on the application in writing by any person interested and subject to the recommendation of the Registrar, by order declare that Division 1 and Division 4 of this Part shall not apply to any person making an offer of shares or debentures to the public, either unconditionally or subject to such terms and conditions as the Minister thinks fit to impose.
(2) Recommendation shall not be made by the Registrar to the Minister unless he is of the opinion that circumstances exist whereby:
(a) the cost of providing a prospectus outweighs the resulting protection to investors; or
(b) it would not be prejudicial to the public interest if a prospectus were dispensed with.
47B PART IV SHARES, DEBENTURES AND CHARGES Division 1 - Prospectuses-47B. Exempted offers.
(1) Nothing in Division 1 and Division 4 of this Part shall apply to an offer of shares or debentures, whether or not they have been previously issued, made to:
(a) a prescribed corporation;
(b) an insurance company registered under any written law relating to insurance companies;
(c) a trustee corporation;
(d) a statutory body established by an Act of Parliament or an Enactment of any State;
(e) a pension fund approved by the Director General of Inland Revenue under section 150 of the Income Tax Act 1967 [Act 53] ;
(f) a unit trust scheme as defined under the Securities Industry Act 1983 [Act 280] ;
(g) a person licensed as a dealer or investment adviser under the Securities Industry Act 1983;
(h) a corporation incorporated outside Malaysia;
(i) a public company which is e
48 Division 2 - Restrictions on Allotment and Commencement of Business-48. Prohibition of allotment unless minimum subscription received.
(1) No allotment shall be made of any shares of a company offered to the public or offered for subscription or purchase or where an invitation to subscribe for or purchase shares is made pursuant to a prospectus that is registered under the Securities Commission Act 1993 unless:
[Am. by Act A1081]
(a) the minimum subscription has been subscribed; and
(b) the sum payable on application for the shares so subscribed has been received by the company,
but if a cheque for the sum payable has been received by the company, the sum shall be deemed not to have been received by the company until the cheque is paid by the bank on which it is drawn.
(2) The minimum subscription shall be:
(a) calculated on the nominal value of each share, and where the shares are issued at a premium, on the nominal value of, and the amount of the
49 Division 2 - Restrictions on Allotment and Commencement of Business-49. Application moneys to be held in trust until allotment.
(1) All applications and other moneys paid prior to allotment by any applicant on account of shares or debentures offered to the public or of any securities for which a prospectus is required under the Securities Commission Act 1993 shall until the allotment be held by the company, or in the case of an intended company by the persons named in the prospectus as proposed directors and by the promoters, upon trust for the applicant, but there shall be no obligation or duty on any bank or third person with whom any such moneys have been deposited to inquire into or see to the proper application of the moneys so long as the bank or person acts in good faith.
[Am. by Act A1081]
(2) If default is made in complying with this section every officer of the company in default or, in the case of an intended company, every person named in the prospectus as a proposed director and every promoter who knowingly and wilfully author
50 Division 2 - Restrictions on Allotment and Commencement of Business-50. Restriction on allotment in certain cases.
(1) A public company having a share capital which does not issue a prospectus on or with reference to its formation shall not allot any of its shares or debentures unless at least three days before the first allotment of either shares or debentures there has been lodged with the Registrar a statement in lieu of prospectus which complies with the requirements of this Act.
(2) If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: Imprisonment for three years or ten thousand ringgit.
51 Division 2 - Restrictions on Allotment and Commencement of Business-51. Requirements as to statements in lieu of prospectus.
(1) To comply with the requirements of this Act a statement in lieu of prospectus lodged by or on behalf of a company:
(a) shall be signed by every person who is named therein as a director or a proposed director of the company or by his agent authorized in writing;
(b) shall, subject to Part III of the Sixth Schedule, be in the form of and state the matters specified in Part I of that Schedule and set out the reports specified in Part II of that Schedule; and
(c) shall, where the persons making any report specified in Part II of that Schedule have made therein or have, without giving the reasons, indicated therein any such adjustments as are mentioned in paragraph 5 of Part III of that Schedule, have endorsed thereon or attached thereto a written statement signed by those persons setting out the adjustments and giving the reasons therefor.
(2) The Registrar shall not
52 Division 2 - Restrictions on Allotment and Commencement of Business-52. Restrictions on commencement of business in certain circumstances.
(1) Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares or has issued a prospectus pursuant to the Securities Commission Act 1993 in relation to its shares the company shall not commence any business or exercise any borrowing powers:
[Am. by Act A1081]
(a) if any money is or may become liable to be repaid to applicants for any shares or debentures offered for public subscription by reason of any failure to apply for or obtain permission for listing for quotation on any Stock Exchange; or
(b) unless:
(i) shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription;
(ii) every director has paid to the company on each of the shares taken or contracted to be taken by him, and for which he is liable to
53 Division 2 - Restrictions on Allotment and Commencement of Business-53. Restriction on varying contracts referred to in prospectus, etc.
A company shall not before the statutory meeting vary the terms of a contract referred to in the prospectus or statement in lieu of prospectus, unless the variation is made subject to the approval of the statutory meeting.
54 Division 3 - Shares-54. Return as to allotments.
(1) Where a company makes any allotment of its shares or any of its shares are deemed to have been allotted under subsection (6) the company shall within one month thereafter lodge with the Registrar a return of the allotments stating:
(a) the number and nominal amounts of the shares comprised in the allotment;
(b) the amount, if any, paid, deemed to be paid, or due and payable on the allotment of each share;
(c) where the capital of the company is divided into shares of different classes, the class of shares to which each share comprised in the allotment belongs; and
(d) the full name and the address of each of the allottees and the number and class of shares allotted to him.
(2) The particulars mentioned in paragraph (1) (d) need not be included in the return where a company to which subsection 166(1) applies has allotted shares:
55 Division 3 - Shares-55. As to voting rights of equity shares in certain companies.
(1) Notwithstanding any provisions in this Act or in the memorandum or articles of a company to which this section applies, each equity share issued by such a company after the commencement of this Act shall confer the right at a poll at any general meeting of the company (subject as provided in subsection 148(1)) to one vote, and, to one vote only for each ringgit or part of a ringgit that has been paid up on that share.
(2) Where any company to which this section applies has, prior to the commencement of this Act, or, while it was a company to which this section did not apply, issued any equity share which does not comply with subsection (1), the company shall not issue any invitation to subscribe for or to purchase any shares or debentures of the company until the voting rights attached to each share of that company have been duly varied so as to comply with subsection (1).
(3) For the purposes of this section any alteration of the r
56 Division 3 - Shares-56. Differences in calls and payments, etc.
(1) A company if so authorized by its articles may:
(a) make arrangements on the issue of shares for varying the amounts and times of payment of calls as between shareholders;
(b) accept from any member the whole or a part of the amount remaining unpaid on any shares although no part of that amount has been called up; and
(c) pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
Reserve liability.
(2) A limited company may by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the company being wound up, and thereupon that portion of its share capital shall not be capable of being called up except in the event and for the purposes of the company
57 Division 3 - Shares-57. Share warrants.
(1) A company shall not issue any share warrant stating that the bearer of the warrant is entitled to the shares therein specified and which enables the shares to be transferred by delivery of the warrant.
(2) The bearer of a share warrant issued before the commencement of this Act shall be entitled, on surrendering it for cancellation, to have his name entered in the register of members.
(3) The company shall be responsible for any loss incurred by any person by reason of the company entering in the register the name of a bearer of a share warrant issued before the commencement of this Act in respect of the shares therein specified without the warrant being surrendered and cancelled.
58 Division 3 - Shares-58. Power to pay certain commissions, and prohibition of payment of all other commissions, discounts, etc.
(1) A company may pay a commission to any person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any shares, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the company, if:
(a) the payment is authorized by the articles;
(b) the commission does not exceed ten per centum of the price at which the shares are issued or the amount or rate authorized by the articles, whichever is the less;
(c) the amount or rate of the commission is:
(i) in the case of shares of an unlisted recreational club which are offered to the public for subscription or in the case of shares other than of an unlisted recreational club which are offered for subscription or purchase pursuant to a prospectus that is registered under the Securities Commission Act 1993, disclosed in the prospectus; an
59 Division 3 - Shares-59. Power to issue shares at a discount.
(1) Subject to this section a company may issue shares at a discount of a class already issued if:
(a) the issue of the shares at a discount is authorized by resolution passed in general meeting of the company, and is confirmed by order of the Court;
(b) the resolution specifies the maximum rate of discount at which the shares are to be issued;
(c) at the date of the issue not less than one year has elapsed since the date on which the company was entitled to commence business; and
(d) the shares are issued within one month after the date on which the issue is confirmed by order of the Court or within such extended time as the Court allows.
(2) The Court, if having regard to all the circumstances of the case it thinks proper to do so, may make an order confirming the issue on such terms and conditions as it thinks fit.
(3) Every prospectus rela
60 Division 3 - Shares-60. Issue of shares at a premium.
(1) In this section:
"arrangement" means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with section 176 or 270);
"company" except in references to the issuing company, includes any body corporate;
"equity share capital" means, in relation to a company, its issued share capital excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;
"equity shares" means shares comprised in a company's equity share capital;
"issuing company" means the company issuing the shares in the circumstances referred to in this section;
61 Division 3 - Shares-61. Redeemable preference shares.
(1) Subject to this section a company having a share capital may, if so authorized by its articles, issue preference shares which are, or at the option of the company are to be, liable to be redeemed and the redemption shall be effected only on such terms and in such manner as is provided by the articles.
(2) The redemption shall not be taken as reducing the amount of authorized share capital of the company.
(3) The shares shall not be redeemed:
(a) except out of profits which would otherwise be available for dividend, or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; and
(b) unless they are fully paid up.
(4) The premium, if any, payable on redemption shall be provided for out of profits or the share premium account before the shares are redeemed.
(5) Where any such shares are redeemed otherwise than out of the proceeds
Legal Commentary on Companies Act 1965 (Revised - 1973) Section 61
Introduction
Section 61 of the Companies Act 1965 (Revised - 1973) pertains to the powers of limited companies regarding the alteration of their share capital. This section is crucial for understanding how companies can manage their capital structure, which is essential for financial flexibility and corporate governance.
What does Section 61 Say
Section 61 outlines the authority of a limited company to alter its share capital. This includes increasing the authorized share capital, consolidating shares, converting fully paid-up shares into stock, and reconverting stock into fully paid-up shares.
Essential Ingredients
- Increase in Authorized Capital: Companies can increase their authorized share capital as deemed necessary.
- Consolidation of Shares: Companies may consolidate and divide their share capital into shares of larger denomination.
- Conversion of Shares to Stock: Fully paid-up shares can be converted into stock, allowing for more flexible ownership structures.
- Reconversion of Stock: Companies have the power to reconvert stock back into fully paid-up shares.
Scope of Section
The scope of Section 61 is broad, allowing companies significant leeway in managing their share capital. This flexibility is vital for companies looking to adapt to changing market conditions or to restructure their financial arrangements.
Punishment for Section
While Section 61 itself does not specify penalties, related provisions in the Companies Act outline penalties for contraventions of the Act, which may include imprisonment or fines.
Legal Comments
- Keyword - "Alteration of Capital" - Section 61 empowers limited companies to alter their share capital, providing essential flexibility for corporate financial management. - [Source Reference]
- Keyword - "Increase in Capital" - Companies can increase their authorized share capital as deemed expedient, facilitating growth and investment. - [Source Reference]
- Keyword - "Consolidation" - The ability to consolidate shares allows companies to manage their share structure effectively, potentially enhancing share value. - [Source Reference]
- Keyword - "Conversion to Stock" - Converting fully paid-up shares into stock provides companies with greater flexibility in ownership and capital management. - [Source Reference]
- Keyword - "Reconversion" - The provision for reconverting stock back into fully paid-up shares allows companies to adjust their capital structure as needed. - [Source Reference]
- Keyword - "Corporate Governance" - Section 61 plays a critical role in corporate governance by allowing companies to manage their capital in a manner that aligns with shareholder interests. - [Source Reference]
- Keyword - "Financial Flexibility" - The powers granted under Section 61 enhance a company's financial flexibility, enabling it to respond to market changes effectively. - [Source Reference]
- Keyword - "Regulatory Compliance" - Companies must ensure compliance with the provisions of Section 61 to avoid potential penalties associated with capital alterations. - [Source Reference]
- Keyword - "Shareholder Approval" - Alterations to share capital often require shareholder approval, ensuring that changes align with the interests of the investors. - [Source Reference]
- Keyword - "Market Adaptation" - The ability to alter share capital is essential for companies to adapt to market conditions and investor demands. - [Source Reference]
- Keyword - "Legal Framework" - Section 61 is part of a broader legal framework that governs corporate actions, ensuring transparency and accountability. - [Source Reference]
- Keyword - "Investment Attraction" - By allowing alterations in share capital, Section 61 aids companies in attracting investments and facilitating capital raising efforts. - [Source Reference]
- Keyword - "Shareholder Rights" - The provisions in Section 61 must be balanced with the rights of shareholders to ensure fair treatment in capital alterations. - [Source Reference]
- Keyword - "Strategic Decisions" - Companies can make strategic decisions regarding their capital structure, which is crucial for long-term planning and sustainability. - [Source Reference]
- Keyword - "Legal Compliance" - Companies must adhere to the legal requirements set forth in Section 61 to maintain their corporate status and avoid legal repercussions. - [Source Reference]
- Keyword - "Financial Reporting" - Changes in share capital must be accurately reflected in financial reports to maintain transparency with stakeholders. - [Source Reference]
- Keyword - "Corporate Restructuring" - Section 61 facilitates corporate restructuring efforts, allowing companies to optimize their capital for operational efficiency. - [Source Reference]
- Keyword - "Investor Confidence" - The ability to manage share capital effectively can enhance investor confidence in a company's governance and financial health. - [Source Reference]
- Keyword - "Legal Precedents" - The interpretation of Section 61 may be influenced by legal precedents, shaping how companies approach capital alterations. - [Source Reference]
- Keyword - "Compliance Risks" - Companies face compliance risks if they fail to follow the procedures outlined in Section 61, which could lead to legal challenges. - [Source Reference]
62 Division 3 - Shares-62. Power of company to alter its share capital.
(1) A company if so authorized by its articles may in general meeting alter the conditions of its memorandum in any one or more of the following ways:
(a) increase its share capital by the creation of new shares of such amount as it thinks expedient;
(b) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;
(c) convert all or any of its paid-up shares into stock and re-convert that stock into paid-up shares of any denomination;
(d) subdivide its shares or any of them into shares of smaller amount than is fixed by the memorandum, so however that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; or
(e) cancel shares which at the date of the passing of
63 Division 3 - Shares-63. Validation of shares improperly issued.
Where a company has purported to issue or allot shares and the creation, issue or allotment of those shares was invalid by reason of any provision of this or any other written law or of the memorandum or articles of the company or otherwise or the terms of issue or allotment were inconsistent with or unauthorized by any such provision the Court may, upon application made by the company or by a holder or mortgagee of any of those shares or by a creditor of the company and upon being satisfied that in all the circumstances it is just and equitable so to do, make an order validating the issue or allotment of those shares or confirming the terms of issue or allotment thereof or both and upon an office copy of the order being lodged with the Registrar those shares shall be deemed to have been validly issued or allotted upon the terms of the issue or allotment thereof.
64 Division 3 - Shares-64. Special resolution for reduction of share capital.
(1) Subject to confirmation by the Court a company may, if so authorized by its articles, by special resolution reduce its share capital in any way and in particular, without limiting the generality of the foregoing, may do all or any of the following:
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b) cancel any paid-up capital which is lost or unrepresented by available assets; or
(c) pay off any paid-up share capital which is in excess of the needs of the company,
and may so far as necessary alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
(2) Where the proposed reduction of share capital involves either diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, and in any other case if the Cour
65 Division 3 - Shares-65. Rights of holders of classes of shares.
(1) If in the case of a company the share capital of which is divided into different classes of shares provision is made by the memorandum or articles for authorizing the variation or abrogation of the rights attached to any class of shares in the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and in pursuance of the said provision the rights attached to any such class of shares are at any time varied or abrogated the holders of not less in the aggregate than ten per centum of the issued shares of that class may apply to the Court to have the variation or abrogation cancelled, and, if any such application is made, the variation or abrogation shall not have effect until confirmed by the Court.
(2) An application shall not be invalid by reason of the applicants or any of them having consented
66 Division 3 - Shares-66. Rights of holders of preference shares to be set out in memorandum or articles.
(1) No company shall allot any preference shares or convert any issued shares into preference shares unless there is set out in its memorandum or articles the rights of the holders of those shares with respect to repayment of capital, participation in surplus assets and profits, cumulative or non-cumulative dividends, voting, and priority of payment of capital and dividend in relation to other shares or other classes of preference shares.
(2) If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: Two thousand ringgit.
67 Division 3 - Shares-67. Dealing by a company in its own shares, etc.
(1) Except as is otherwise expressly provided by this Act no company shall give, whether directly or indirectly and whether by means of a loan, guarantee or the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company or, where the company is a subsidiary, in its holding company or in any way purchase, deal in or lend money on its own shares.
(2) Nothing in subsection (1) shall prohibit:
(a) where the lending of money is part of the ordinary business of a company, the lending of money by the company in the ordinary course of its business;
(b) the provision by a company, in accordance with any scheme for the time being in force, of money for the purchase of or subscription for fully-paid shares in the company or its holding company, being a purchase or subscrip
67A Division 3 - Shares-67A. Purchase by a company of its own shares, etc.
(1) Notwithstanding section 67, a public company with a share capital may, if so authorised by its articles, purchase its own shares.
[Am. by Act A1043]
(2) A company shall not purchase its own shares unless:
(a) it is solvent at the date of the purchase and will not become insolvent by incurring the debts involved in the obligation to pay for the shares so purchased;
[Am. by Act A1043]
(b) the purchase is made through the Stock Exchange on which the shares of the company are quoted and in accordance with the relevant rules of the Stock Exchange; and
[Am. by Act A1043]
(c) the purchase is made in good faith and in the interests of the company.
[Am. by Act A1043]
(3) Notwithstanding section 60, the company may apply its share premium accou
68 Division 3 - Shares-68. Options over unissued shares.
(1) An option granted after the commencement of this Act by a public company which enables any person to take up unissued shares of the company after a period of ten years has elapsed from the date on which the option was granted shall be void.
[Am. by Act A1043]
(2) Subsection (1) shall not apply in any case where the holders of debentures have an option to take up shares of the company by way of redemption of the debentures.
68A Division 3 - Shares-68A. Register of options to take up unissued shares.
(1) A company shall keep a register of options granted to persons to take up unissued shares in the company.
(2) The company shall, within fourteen days after the grant of an option to take up unissued shares in the company, enter in the register the following particulars:
(a) the name, address and the number of the identity card issued under the National Registration Act 1959 [Act 78] , or the passport number or other identification number, and the nationality of the holder of the option;
(b) the date on which the option was granted;
(c) the number and description of the shares in respect of which the option was granted;
(d) the period during which, the time at which or the occurrence upon the happening of which the option may be exercised;
(e) the consideration, if any, for the grant of the option;
(f) the consideration,
69 Division 3 - Shares-69. Power of company to pay interest out of capital in certain cases.
Where any shares of a company are issued for the purpose of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a long period, the company may pay interest on so much of such share capital as is for the time being paid up and charge the interest so paid to capital as part of the cost of the construction or provision but:
(a) no such payment shall be made unless it is authorized by the articles or by special resolution, and is approved by the Court;
(b) before approving of any such payment, the Court may at the expense of the company appoint a person to inquire and report as to the circumstances of the case, and may require the company to give security for the payment of the costs of the inquiry;
(c) the payment shall be made only for such period as is determined by the Court, but in no case ext
69A Division 3 - Shares-69A. Furnishing of information and particulars of share holding.
(1) The Registrar may at any time by notice in writing require any company, person or individual to furnish all the necessary information and particulars of any share acquired or held directly or indirectly either for his own benefit or for any other company, person or individual and have them verified by statutory declaration.
(2) Any company, person or individual served with such notice shall within seven days of the receipt of such notice furnish the Registrar all the necessary information and particulars of any share so acquired or held and duly verified by statutory declaration.
(3) If default is made in complying with this section the company, every officer of the company and any other person or individual who is in default shall be guilty of an offence against this Act.
Penalty: Imprisonment for three years or one million ringgit. Default penalty.
[Am. by Act A1043]
69B Division 3A - Substantial Shareholdings-69B. Application and interpretation of division.
(1) This section has effect for the purpose of this Division but shall not prejudice the operation of any other provision of this Act.
(2) In this Division a reference to a company is a reference:
(a) to a company all or any of the shares in which are listed for quotation on the official list of a Stock Exchange as defined in the Securities Industry Act 1983 [Act 280] ;
(b) to a public company whose shares are not listed for quotation on the official list of a Stock Exchange as defined in the Securities Industry Act 1983;
(c) to a body corporate incorporated in Malaysia, that is for the time being declared by the Minister, by notification in the Gazette , to be a company for the purposes of this Division; or
(d) to a body, not being a body corporate, formed in Malaysia that is for the time being declared by the Minister, by notification in the G
69C Division 3A - Substantial Shareholdings-69C. Persons obliged to comply with Division.
(1) The obligation to comply with this Division extends to all natural persons, whether resident in Malaysia or not and whether Malaysian citizens or not and to all bodies corporate, whether incorporated or carrying on business in Malaysia or not.
(2) The provisions of this Division extend to acts done or omitted to be done outside Malaysia.
69D Division 3A - Substantial Shareholdings-69D. Substantial shareholdings and substantial shareholders.
(1) For the purposes of this Division, a person has a substantial shareholding in a company if he has an interest in one or more voting shares in the company and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is not less than five per centum of the aggregate of the nominal amounts of all the voting shares in the company.
[Am. by Act A1108]
(2) For the purposes of this Division, a person has a substantial shareholding in a company, being a company the share capital of which is divided into two or more classes of the shares, if he has an interest in one or more voting shares included in one of those classes and the nominal amount of that share, or the aggregate of the nominal amounts of those shares, is not less than five per centum of the aggregate of the nominal amounts of all the voting shares included in that class.
[Am. by Act A1108]
69E Division 3A - Substantial Shareholdings-69E. Substantial shareholder to notify company of his interest.
(1) A person who is a substantial shareholder in a company shall give notice in writing to the company stating his name, nationality and address and full particulars of the voting shares in the company in which he has an interest (including, unless the interest or interests cannot be related to a particular share or shares, the name of the person who is registered as the holder) and full particulars of each interest and of the circumstances by reason of which he has that interest.
(2) The notice shall be given:
(a) if the person was a substantial shareholder on the date on which this Division came into operation-within one month after that date; or
(b) if the person became a substantial shareholder after that date-within seven days after becoming a substantial shareholder.
[Am. by Act A1043]
(3) The notice shall be so given notwithstanding that t
69F Division 3A - Substantial Shareholdings-69F. Substantial shareholder to notify company of change in his interests.
(1) Where there is a change in the interest of a substantial shareholder in a company in voting shares in the company, he shall give notice in writing to the company stating his name and full particulars of the change, including the date of the change, and the circumstances by reason of which that change has occurred.
(2) The notice shall be given within seven days after the date of the change.
[Am. by Act A1043]
(3) For the purposes of subsection (1) where a substantial shareholder in a company acquires or disposes of voting shares in the company, there shall be deemed to be a change in the interest of the substantial shareholder in voting shares in that company.
69G Division 3A - Substantial Shareholdings-69G. Person who ceases to be substantial shareholder to notify company.
(1) A person who ceases to be a substantial shareholder in a company shall give notice in writing to the company stating his name and the date on which he ceased to be a substantial shareholder and full particulars of the circumstances by reason of which he ceased to be a substantial shareholder.
(2) The notice shall be given within seven days after the person ceased to be a substantial shareholder.
[Am. by Act A1043]
69H Division 3A - Substantial Shareholdings-69H. References to operation of section 6A.
The circumstances required to be stated in a notice under section 69E, 69F or 69G include circumstances by reason of which having regard to section 6A:
(a) a person has an interest in voting shares;
(b) a change has occurred in an interest in voting shares; or
(c) a person has ceased to be a substantial shareholder in a company,
respectively.
69I Division 3A - Substantial Shareholdings-69I. Copy of notice to be served on Stock Exchange.
A person who gives a notice under section 69E, 69F or 69G to a company referred to in paragraph 69B(2) (a) , shall, on the day on which he gives that notice, serve a copy of the notice on the Securities Commission as defined in the Securities Commission Act 1993.
[Am. by Act A1108; Act A1299]
69J Division 3A - Substantial Shareholdings-69J. Notice to non-residents.
(1) A person who holds voting shares in a company, being voting shares in which a non-resident has an interest, shall:
(a) give to the non-resident a notice in the prescribed form as to the requirements of this Division; or
(b) where the first-mentioned person knows or has reasonable grounds for believing that an interest of the non-resident in the shares is an interest that the non-resident holds for another person, give to the non-resident a notice in the prescribed form as to the requirements of this Division and direct the non-resident to give the notice or a copy of the notice to that other person.
(2) The notice shall be given:
(a) if the first-mentioned person holds the shares on the date on which this Division came into operation-within fourteen days after that date; or
(b) if the first-mentioned person did not hold the shares on
69K Division 3A - Substantial Shareholdings-69K. Registrar may extend time for giving notice under this Division.
(1) The Registrar may, on the application of a person who is required to give a notice under this Division, in his discretion, extend or further extend the time for giving the notice.
(2) Application for an extension under subsection (1) may be made, and the power of the Registrar under the subsection may be exercised, notwithstanding that the period referred to in that subsection has expired.
69L Division 3A - Substantial Shareholdings-69L. Company to keep register of substantial shareholders.
(1) A company shall keep a register in which it shall forthwith enter:
(a) in alphabetical order the names of persons from whom it has received a notice under section 69E; and
(b) against each name so entered the information given in the notice and, where it receives a notice under section 69F or 69G, the information given in that notice.
(2) The register shall be kept at the registered office of the company, and shall be open for inspection by any member of the company without charge and by any other person on payment for each inspection of a sum of five ringgit or such lesser sum as the company requires.
(3) The Registrar may at any time in writing require the company to furnish him with a copy of the register or any part of the register and the company shall furnish the copy within fourteen days after the day on which the requirement is received by the company.
(4)
69M Division 3A - Substantial Shareholdings-69M. Offences against certain sections.
A person who fails to comply with section 69E, 69F, 69G or 69J shall be guilty of an offence.
Penalty: One million ringgit. Default penalty: Fifty thousand ringgit.
[Am. by Act A1043]
69N Division 3A - Substantial Shareholdings-69N. Powers of Court with respect to defaulting substantial shareholders.
(1) Where a person (in this section referred to as "the substantial shareholder") is, or at any time after the date on which this Division came into operation has been, a substantial shareholder in a company and has failed to comply with section 69E, 69F or 69G, the Court may, whether or not that failure still continues, on the application of the Registrar, make one or more of the following orders:
(a) an order restraining the substantial shareholder from disposing of any interest in shares in the company in which he is or has been a substantial shareholder;
(b) an order restraining a person who is, or is entitled to be registered as, the holder of shares referred to in paragraph (a) from disposing of any interest in those shares;
(c) an order restraining the exercise of any voting or other rights attached to any share in the company in which the substantial shareholder has or has
69O Division 3A - Substantial Shareholdings-69O. Power of company to require disclosure of beneficial interest in its voting shares.
(1) Any company all or part of the shares in which are listed for quotation on the official list of a Stock Exchange as defined in the Securities Industry Act 1983 [Act 280] may by notice in writing require any member of the company within such reasonable time as is specified in the notice:
(a) to inform it whether he holds any voting shares in the company as beneficial owner or as trustee; and
(b) if he holds them as trustee, to indicate so far as he can the persons for whom he holds them by name and by other particulars sufficient to enable those persons to be identified and the nature of their interest.
(2) Where a company is informed in pursuance of a notice given to any person under subsection (1) or under this subsection that any other person has an interest in any of the voting shares in a company, the company may by notice in writing require that other person within s
69P Division 3A - Substantial Shareholdings-69P. [Deleted by Act A1180].
[Deleted by Act A1108] .
70 Division 4 - Debentures-70. Register of debenture holders and copies of trust deed.
(1) Every company which issues debentures (not being debentures transferable by delivery) shall keep a register of holders of the debentures at the registered office of the company or at some other place in Malaysia.
(2) Every company shall within seven days after the register is first kept at a place other than the registered office lodge with the Registrar notice of the place where the register is kept and shall within seven days after any change in the place at which the register is kept lodge with the Registrar notice of the change.
(3) The register shall except when duly closed be open to the inspection of the registered holder of any debentures and of any holder of shares in the company and shall contain particulars of the names and addresses of the debenture holders and the amount of debentures held by them.
(4) For the purposes of this section a register shall be deemed to be duly closed if closed in accordance with prov
71 Division 4 - Debentures-71. Specific performance of contracts.
A contract with a company to take up and pay for any debentures of the company may be enforced by an order for specific performance.
72 Division 4 - Debentures-72. Perpetual debentures.
A condition contained in any debenture or in any deed for securing any debentures whether the debenture or deed is issued or made before or after the commencement of this Act shall not be invalid by reason only that the debentures are thereby made irredeemable or redeemable only on the happening of a contingency however remote or on the expiration of a period however long, any rule of law or equity to the contrary notwithstanding.
73 Division 4 - Debentures-73. Reissue of redeemed debentures.
(1) Where a company has redeemed any debentures whether before or after the commencement of this Act:
(a) unless any provision to the contrary, whether express or implied, is contained in the articles or in any contract entered into by the company; or
(b) unless the company has, by passing a resolution to that effect or by some other act, manifested its intention that the debentures shall be cancelled,
the company shall have and shall be deemed always to have had power to reissue the debentures, either by reissuing the same debentures or by issuing other debentures in their place but the reissue of a debenture or the issue of one debenture in place of another under this subsection, whether the reissue or issue was made before or after the commencement of this Act, shall not be regarded as the issue of a new debenture for the purpose of any provision limiting the amount or number of de
74 Division 4 - Debentures-74. Qualifications of trustee for debenture holders.
(1) Subject to this section every corporation which offers debentures to the public for subscription or purchase in Malaysia after the commencement of this Act shall make provision in those debentures or in a trust deed relating to those debentures for the appointment of a trustee corporation as trustee for the holders of the debentures.
(2) Where a borrowing corporation is required to appoint a trustee for the holders of any debentures in accordance with subsection (1) it shall not allot any of those debentures until the appointment has been made and the trustee corporation has consented to act as trustee.
(3) Without leave of the Court, a trustee corporation shall not be appointed, hold office or act as trustee for the holders of debentures of a borrowing corporation if that trustee corporation is:
(a) a shareholder who beneficially holds shares in the borrowing corporation;
(b) beneficia
75 Division 4 - Debentures-75. Retirement of trustees.
(1) Notwithstanding anything contained in any Act or in the relevant debentures or trust deed a trustee for the holders of debentures shall not cease to be the trustee until a corporation qualified pursuant to section 74 for appointment as trustee for the holders of the debentures has been appointed to be the trustee for the holders of the debentures and has taken office as such.
(2) Where provision has been made in the debentures or in the relevant trust deed for the appointment of a successor to a trustee for the holders of the debentures upon retirement or otherwise, the successor may subject to section 74, be appointed in accordance with that provision.
(3) Where no provision has been made in the debentures or in the relevant trust deed for the appointment of a successor to a retiring trustee the borrowing corporation may appoint a successor which is qualified for appointment pursuant to section 74.
(4) Notwithstanding anyth
76 Division 4 - Debentures-76. Contents of trust deed.
(1) Where a corporation offers debentures to the public for subscription in Malaysia the debentures or the relevant trust deed shall contain a limitation on the amount that the borrowing corporation may, pursuant to those debentures or that deed, borrow and shall contain covenants by the borrowing corporation, or if the debentures do not or the trust deed does not expressly contain those covenants they or it shall be deemed to contain covenants by the borrowing corporation, to the following effect:
(a) that the borrowing corporation will use its best endeavours to carry on and conduct its business in a proper and efficient manner;
(b) that, to the same extent as if the trustee for the holders of the debentures or any approved company auditor appointed by the trustee were a director of the corporation the borrowing corporation will:
(i) make available for its or his inspection the whole
77 Division 4 - Debentures-77. Power of Court in relation to certain irredeemable debentures.
(1) Notwithstanding anything in any debenture or trust deed the security for any debentures which are irredeemable or redeemable only on the happening of a contingency shall, if the Court so orders, be enforceable, forthwith or at such other time as the Court directs if on the application of the trustee for the holders of the debentures or (where there is no trustee) on the application of the holder of any of the debentures the Court is satisfied that:
(a) at the time of the issue of the debentures the assets of the corporation which constituted or were intended to constitute the security therefor were sufficient or likely to become sufficient to discharge the principal debt and any interest thereon;
(b) the security, if realized under the circumstances existing at the time of the application, would be likely to bring not more than sixty per centum of the principal sum of moneys outstanding (regard being h
78 Division 4 - Debentures-78. Duties of trustees.
(1) A trustee for the holders of debentures:
(a) shall exercise reasonable diligence to ascertain whether or not the assets of the borrowing corporation and of each of its guarantor corporations which are or may be available whether by way of security or otherwise are sufficient or are likely to be or become sufficient to discharge the principal debt as and when it becomes due;
(b) shall satisfy itself that each prospectus relating to the debentures does not contain any matter which is inconsistent with the terms of the debentures or with the relevant trust deed;
(c) shall ensure that the borrowing corporation complies with Division 7 so far as it relates to the debentures and is applicable;
(d) shall exercise reasonable diligence to ascertain whether or not the borrowing corporation and each of its guarantor corporations have committed any breach of the covenants, terms a
79 Division 4 - Debentures-79. Powers of trustee to apply to the Court for directions, etc.
(1) The trustee for the holder of debentures may apply to the Court:
(a) for directions in relation to any matter arising in connection with the performance of the functions of the trustee; or
(b) to determine any question in relation to the interests of the holders of debentures,
and the Court may:
(c) give such directions to the trustee as the Court deems fit; and
(d) if satisfied that the determination of the question will be just and beneficial accede wholly or partially to any such application on such terms and conditions as the Court thinks fit or make such other order on the application as the Court thinks just.
(2) The Court may on an application under this section order a meeting of all or any of the holders of debentures to be called to consider any matters in which they are concerned and to advise the trustee thereon and may give su
80 Division 4 - Debentures-80. Obligations of borrowing corporation.
(1) Where there is a trustee for the holders of any debentures of a borrowing corporation the directors of the borrowing corporation shall:
(a) at the end of a period not exceeding three months ending on a day (not later than six months after commencement of this Act or after the date of the relevant prospectus, whichever is the later) which the trustee is required to notify to the borrowing corporation in writing; and
(b) at the end of each succeeding period thereafter, being a period of three months or such shorter time as the trustee may, in any special circumstances, allow,
prepare a report that relates to that period and complies with the requirements of subsection (2) and within one month after the end of each such period lodge a copy of the report relating to that period with the Registrar and with the trustee.
Penalty: Ten thousand ringgit. Default penalty: Two hundred
81 Division 4 - Debentures-81. Obligation of guarantor corporation to furnish information.
(1) For the purpose of the preparation of a report that, by this Act, is required to be signed by or on behalf of the directors of a borrowing corporation or any of them, that corporation may, by notice in writing require any of its guarantor corporations to furnish it with any information relating to that guarantor corporation which is, by this Act, required to be contained in that report, and that guarantor corporation shall furnish the borrowing corporation with that information before such date, being a date not earlier than fourteen days after the notice is given, as may be specified in that behalf in the notice.
(2) A corporation which fails to comply with a requirement contained in a notice given pursuant to subsection (1) and every officer of that corporation who is in default shall be guilty of an offence against this Act.
Penalty: Ten thousand ringgit. Default penalty.
82 Division 4 - Debentures-82. Loans and deposits to be immediately repayable on certain events.
(1) Where in any prospectus issued in connection with an invitation to the public to subscribe for or to purchase debentures of a corporation, there is a statement as to any particular purpose or project for which the moneys received by the corporation in response to the invitation are to be applied, the corporation shall from time to time make reports to the trustee for the holders of those debentures as to the progress that has been made towards achieving that purpose or completing that project.
(2) Each such report shall be included in the report required to be furnished to the trustee for the holders of the debentures under subsection 80(1).
(3) When it appears to the trustee for the holders of the debentures that the purpose or project has not been achieved or completed within the time stated in the prospectus within which the purpose or project is to be achieved or completed or, where no such time was stated, within a reasonable t
83 Division 4 - Debentures-83. Liability of trustees for debenture holders.
(1) Subject to this section, any provision contained in a trust deed relating to or securing an issue of debentures, or in any contract with the holders of debentures secured by a trust deed, shall be void so far as it would have the effect of exempting a trustee thereof from or indemnifying it against liability for breach of trust where it fails to show the degree of care and diligence required of it as trustee.
(2) Subsection (1) shall not invalidate :
(a) any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release; or
(b) any provision enabling such a release to be given:
(i) on the agreement thereto of a majority of not less than three-fourths in nominal value of the debenture holders present and voting in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose; and
84 Division 5 - Interests Other Than Shares, Debentures, etc.-84. Interpretation.
(1) In this Division and in the Seventh Schedule, unless inconsistent with the context or subject matter:
"company" means a public company, and includes a corporation that is a public company under the law of a proclaimed country and is registered as a foreign company in Malaysia;
"financial year" , in relation to a deed, means the period of twelve months ending on the thirty-first day of December or on such other date as is specified in lieu thereof in the deed; "interest" means any right to participate or interest, whether enforceable or not and whether actual, prospective or contingent:
(a) in any profits, assets or realization of any financial or business undertaking or scheme, whether in Malaysia or elsewhere;
(b) in any common enterprise, whether in
85 Division 5 - Interests Other Than Shares, Debentures, etc.-85. Approved deeds.
For the purposes of this Division, a deed shall be an approved deed if:
(a) the Registrar has granted his approval to the deed under this Division; and
(b) the Minister has granted his approval under this Division to the trustee or representative appointed for the purposes of the deed acting as trustee or representative and that approval has not been revoked and the trustee or representative has not ceased to hold office.
86 Division 5 - Interests Other Than Shares, Debentures, etc.-86. Approval of deeds.
(1) Where a deed makes provision for the appointment of a company as trustee for or representative of the holders of interests issued or proposed to be issued by a company the Registrar may, subject to this section, grant his approval to the deed.
(2) The Registrar shall not grant his approval to a deed unless the deed:
(a) complies with the requirements of this Division; and
(b) makes provision for such other matters and things as are required by or under the regulations to be included in the deed and if regulations have been made prescribing the charges that may be made by a management company, unless the deed provides:
(i) that the charges to be made by the management company do not exceed such percentages or amounts as are prescribed; and
(ii) that the price at which the interests to which the deed relates are to be sold or purchased by the management company are co
87 Division 5 - Interests Other Than Shares, Debentures, etc.-87. Approval of trustees.
(1) The Minister on the recommendation of Bank Negara Malaysia may, subject to such terms and conditions as he thinks fit, grant his approval to a company acting as trustee or representative for the purposes of a deed.
(2) Notwithstanding subsection (1) the Minister on the recommendation of Bank Negara Malaysia may, having regard to the nature of the undertaking, scheme or enterprise, contract or arrangement to which a deed relates, grant his approval subject to such terms and conditions as he thinks fit to such other person or persons acting as trustee or representative for the purpose of the deed.
(3) The Minister may, at any time, by reason of a breach of a term or condition subject to which the approval was granted or for any other reason, revoke an approval granted by him under this section.
88 Division 5 - Interests Other Than Shares, Debentures, etc.-88. Covenants to be included in deeds.
(1) A deed shall, for the purposes of paragraph 86(2) (a) , contain covenants to the following effect, namely:
(a) a covenant binding the management company that it will use its best endeavours to carry on and conduct its business in a proper and efficient manner and to ensure that any undertaking, scheme or enterprise to which the deed relates is carried on and conducted in a proper and efficient manner;
(b) covenants binding the management company:
(i) that the management company will pay to the trustee or representative, within thirty days after their receipt by the company, any moneys that, under the deed, are payable by the company to the trustee or representative;
(ii) that the management company will not sell any interest to which the deed relates otherwise than at a price calculated in accordance with the deed;
(iii) that the management company will, at t
89 Division 5 - Interests Other Than Shares, Debentures, etc.-89. Interests to be issued by companies only.
No person except a company or an agent of a company authorized in that behalf under the seal of the company shall issue or offer to the public for subscription or purchase or shall invite the public to subscribe for or purchase any interest.
90 Division 5 - Interests Other Than Shares, Debentures, etc.-90. Statement to be issued.
(1) Before a company or an agent of a company issues or offers to the public for subscription or purchase or invites the public to subscribe for or purchase any interest, the company shall issue or cause to be issued a statement in writing in connection therewith, which statement shall for all purposes be deemed to be a prospectus issued by a company, and subject to subsection (2) all provisions of this Act relating to prospectuses or to the offering or to an intended offering of shares for subscription or purchase to the public shall, with such adaptations as are necessary, apply and have effect accordingly as if the interest were shares offered or intended to be offered to the public for subscription or purchase and as if persons accepting any offer or invitation in respect of or subscribing for or purchasing any such interest were subscribers for shares.
[Am. by Act A1081]
(2) Subject to subsection (3) the stat
91 Division 5 - Interests Other Than Shares, Debentures, etc.-91. No issue without approved deed.
(1) A person shall not issue or offer to the public for subscription or purchase or invite the public to subscribe for or purchase any interest unless, at the time of the issue, offer or invitation, there is in force, in relation to the interest, a deed that is an approved deed.
(2) A person shall not in any deed, prospectus, statement, advertisement or other document relating to any interest make any reference to an approval of a deed or of a trustee or representative granted under this Division.
(3) Where:
(a) an interest issued by a corporation before the date of commencement of this Act is in existence immediately before that date;
(b) this Division would have applied in relation to the issue of the interest if the interest had been issued on or after that date;
(c) there is not, at the expiration of three months after that date, a deed that is an approved deed in force
92 Division 5 - Interests Other Than Shares, Debentures, etc.-92. Register of interest holders.
(1) The management company shall, in respect of each deed with which the company is concerned, keep a register of the holders of interests under the deed and enter therein:
(a) the names and addresses of the holders;
(b) the extent of the holding of each holder and, if his interest consists of a specific interest in any property, a description of the property and its location sufficient to identify it;
(c) the date at which the name of each person was entered in the register as a holder; and
(d) the date at which any person ceased to be a holder.
(2) Division 4 of Part V shall so far as is applicable and with such adaptations as are necessary apply to and in relation to the register.
(3) A management company which:
(a) keeps a register of holders of interests at a place within three miles of the office of the Regi
93 Division 5 - Interests Other Than Shares, Debentures, etc.-93. Returns, information, etc., relating to interests.
(1) Where a deed is or has at any time been an approved deed, the management company shall, so long as the deed or any deed in substitution in whole or in part for the deed, remains in force, lodge with the Registrar, within two months after the end of each financial year applicable to the deed:
(a) a return containing a list of all persons who, at the end of the financial year, were holders of the interests to which the deed relates, showing the name and address of each holder and the extent of his holding and, if his interest consists of a specific interest in any property, a description of the property and its location sufficient to identify it;
(b) a summary of:
(i) all purchases and sales of land and marketable securities affecting the interests of the holders during the financial year; and
(ii) all other investments affecting the interests of the holders made during the f
94 Division 5 - Interests Other Than Shares, Debentures, etc.-94. Penalty for contravention of Division, etc.
(1) A person shall not:
(a) contravene or fail to comply with this Division; or
(b) fail to comply with a covenant contained or deemed to be contained in any deed that is or at any time has been an approved deed.
Penalty: Imprisonment for five years or one hundred thousand ringgit or both.
(2) A person shall not be relieved from any liability to any holder of an interest by reason of any contravention of, or failure to comply with this Division.
95 Division 5 - Interests Other Than Shares, Debentures, etc.-95. Winding up of schemes, etc.
(1) Where the management company under a deed is in liquidation or where, in the opinion of the trustee or representative, the management company has ceased to carry on business or has, to the prejudice of holders of interests to which the deed relates, failed to comply with the deed, the trustee or representative shall summon a meeting of the holders.
(2) A meeting under subsection (1) shall be summoned:
(a) by sending by post notice of the proposed meeting at least twenty-one days before the proposed meeting, to each holder at his last known address, or, in the case of joint holders, to the joint holder whose name stands first in the company's records; and
(b) by publishing, at least twenty-one days before the proposed meeting, an advertisement giving notice of the meeting in a newspaper circulating generally throughout Malaysia.
(3) Subsection 88(2) shall apply to such a me
96 Division 5 - Interests Other Than Shares, Debentures, etc.-96. Power to exempt from compliance with Division and non-application of Division in certain circumstances.
(1) The Minister may, by notice published in the Gazette and subject to such terms and conditions as are specified in the notice,:
(a) exempt any company or class of companies or person or class of persons from complying with all or any of the provisions of this Division in relation to any interest or class of interests specified in the notice; or
(b) declare that all or any of the provisions of this Division shall not apply to any interest or class of interests specified in the notice, upon a request made by the Minister charged with the responsibility for finance on the grounds:
(i) that the interest or class of interests is more appropriately regulated as a securities or futures contract, as the case may be; and
(ii) that any issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase, such interest or class of interests would be more
97 Division 5 - Interests Other Than Shares, Debentures, etc.-97. Liability of trustees.
(1) Subject to this section, any provision contained in a deed that is or at any time has been an approved deed, or in any contract with the holders of interests to which such a deed relates, shall be void so far as it would have the effect of exempting a trustee or representative under the deed from, or idemnifying a trustee or representative against, liability for breach of trust where the trustee or representative fails to show the degree of care and diligence required of a trustee or representative.
(2) Subsection (1) shall not invalidate:
(a) any release otherwise validly given in respect of anything done or omitted to be done by a trustee or representative before the giving of the release; or
(b) any provision enabling such a release to be given:
(i) on the agreement thereto of a majority of not less than three-fourths of the holders of interests as vote in person or by p
98 Division 6 - Title and Transfers-98. Nature of shares.
The shares or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles, and shall not be of the nature of immovable property.
99 Division 6 - Title and Transfers-99. Numbering of shares.
(1) Each share in a company shall be distinguished by an appropriate number.
(2) Notwithstanding subsection (1):
(a) if at any time all the issued shares in a company or all the issued shares therein of a particular class are fully paid up and rank equally for all purposes, none of those shares need thereafter have a distinguishing number so long as each of those shares remains fully paid up and ranks equally for all purposes with all shares of the same class for the time being issued and fully paid up; or
(b) if all the issued shares in a company are evidenced by certificates in accordance with section 100 and each certificate is distinguished by an appropriate number and that number is recorded in the register of members, none of those shares need have a distinguishing number.
100 Division 6 - Title and Transfers-100. Certificate to be evidence of title.
(1) A certificate under the common or official seal of a company specifying any shares held by any member of the company shall be prima facie evidence of the title of the member to the shares.
(2) Every share certificate shall be under the common seal of the company or (in the case of a share certificate relating to shares on a branch register) the common or official seal of the company and shall state as at the date of the issue of the certificate:
(a) the name of the company and the authority under which the company is constituted;
(b) the address of the registered office of the company in Malaysia, or where the certificate is issued by a branch office, the address of that branch office; and
(c) the nominal value and the class of the shares and the extent to which the shares are paid up.
(3) Failure to comply with this section shall not affect the r
101 Division 6 - Title and Transfers-101. Company may have duplicate common seal.
A company may if authorized by its articles have a duplicate common seal which shall be a facsimile of the common seal of the company with the addition on its face of the words "Share Seal" and a certificate under the duplicate seal shall be deemed to be sealed with the common seal of the company for the purposes of this Act.
102 Division 6 - Title and Transfers-102. Loss or destruction of certificates.
(1) Subject to subsection (2) where a certificate or other document of title to shares or debentures is lost or destroyed, the company shall on payment of a fee not exceeding two ringgit issue a duplicate certificate or document in lieu thereof to the owner on his application accompanied by:
(a) a statutory declaration that the certificate or document has been lost or destroyed, and has not been pledged sold or otherwise disposed of, and, if lost, that proper searches have been made; and
(b) an undertaking in writing that if it is found or received by the owner it will be returned to the company.
(2) Where the value of the shares or debentures represented by the certificate or document is greater than five hundred ringgit, the directors of the company may, before accepting an application for the issue of a duplicate certificate or document, require the applicant:
103 Division 6 - Title and Transfers-103. Instrument of transfer.
(1) Notwithstanding anything in its articles, a company shall not register a transfer of shares or debentures unless a proper instrument of transfer in the prescribed form has been delivered to the company, but this subsection shall not prejudice any power to register as a shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law.
(1A) Nothing in this section shall be construed as affecting the validity of any instrument which would be effective to transfer shares or debentures apart from this section; and any instrument purporting to be made in any form which was common or usual in use, or in any other form authorized or required for that purpose apart from this section before the commencement of this Act, shall be sufficient, whether or not it is completed in accordance with the prescribed form, if it complies with the requirements as to execution and co
104 Division 6 - Title and Transfers-104. Registration of transfer at request of transferor.
(1) On the request in writing of the transferor of any share, debenture or other interest in a company, the company shall enter in the appropriate register the name of the transferee in the same manner and subject to the same conditions as if the application for the entry were made by the transferee.
(2) On the request in writing of the transferor of a share or debenture the company shall by notice in writing require the person having the possession, custody or control of the share certificate or debenture and the instrument of transfer thereof or either of them to bring the same into the office of the company within a stated period, being not less than seven and not more than twenty-eight days after the date of the notice, to have the share certificate or debenture cancelled or rectified and the transfer registered or otherwise dealt with.
(3) If any person refuses or neglects to comply with a notice given under subsection (2), the tra
105 Division 6 - Title and Transfers-105. Notice of refusal to register transfer.
(1) If a company refuses to register a transfer of any share, debentures or other interests in the company it shall, within one month after the date on which the transfer was lodged with it, send to the transferor and to the transferee notice of the refusal.
(2) If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
106 Division 6 - Title and Transfers-106. Certification of transfers.
(1) The certification by a company of any instrument of transfer of shares, debentures or other interests in the company shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares, debentures or other interests in the transferor named in the instrument of transfer but not as a representation that the transferor has any title to the shares, debentures or other interests.
(2) Where any person acts on the faith of a false certification by a company made negligently, the company shall be under the same liability to him as if the certification had been made fraudulently.
(3) Where any certification is expressed to be limited to forty-two days or any longer period from the date of certification, the company and its officers shall not in the absence of fraud be liable i
107 Division 6 - Title and Transfers-107. Duties of company with respect to issue of certificates.
(1) Every company shall within two months after the allotment of any of its shares or debentures, and within one month after the date on which a transfer (other than such a transfer as the company is for any reason entitled to refuse to register and does not register) of any of its shares or debentures is lodged with the company, complete and have ready for delivery all the appropriate certificates and debentures in connection with the allotment or transfer.
(2) If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
Power of Court where default in issue of certificates.
(3) If any company on which a notice has been served requiring the company to make good any default in complying with this section fails to make good the default within ten days after the servic
107A Division 6A - Provisions Applicable to Companies Whose Securities are Deposited With the Central Depository-107A. Interpretation.
In this Division, unless the contrary intention appears:
"central depository" has the same meaning as is assigned to that expression under subsection 2(1) of the Securities Industry (Central Depositories) Act 1991;
"deposited securities" has the same meaning as is assigned to that expression under subsection 2(1) of the Securities Industry (Central Depositories) Act 1991;
"depositor" has the same meaning as is assigned to that expression under subsection 2(1) of the Securities Industry (Central Depositories) Act 1991;
"security" has the same meaning as is assigned to that expression under subsection 2(1) of the Securities Industry (Central Depositories) Act 1991;
"stock exchange" has the same meani 107B Division 6A - Provisions Applicable to Companies Whose Securities are Deposited With the Central Depository-107B. Depositor deemed to be member.
(1) Notwithstanding section 100, a depositor whose name appears in the record of depositors maintained by the central depository pursuant to section 34 of the Securities Industry (Central Depositories) Act 1991 in respect of the securities of a company which have been deposited with the central depository shall be deemed to be a member, debenture holder, interest holder or option holder, as the case may be, of the company, and shall, subject to the provisions of the Securities Industry (Central Depositories) Act 1991 and any regulations made thereunder, be entitled to the number of securities stated in the record of depositors and all rights, benefits, powers and privileges and be subject to all liabilities, duties and obligations in respect of, or arising from, such securities (whether conferred or imposed by the Act or the memorandum or articles of association of the company).
(2) Nothing in this Division shall be construed as affecting the o
107C Division 6A - Provisions Applicable to Companies Whose Securities are Deposited With the Central Depository-107C. Transfer of securities is by way of book entry.
(1) On or after the coming into operation of this section, the transfer of any securities or class of securities of a company whose securities or any class of whose securities have been deposited with a central depository shall be by way of book entry by the central depository in accordance with the rules of the central depository and, notwithstanding sections 103 and 104, such company shall be precluded from registering and effecting any transfer of securities or class of securities which have been deposited.
(2) Subsection (1) shall not apply to a transfer of securities to a central depository or its nominee company.
[Ins. by Act A1043]
107D Division 6A - Provisions Applicable to Companies Whose Securities are Deposited With the Central Depository-107D. Rectification of record of depositors.
(1) Notwithstanding anything in this Act or any written law or rule of law, no order shall be made by the Court for the rectification of the record of depositors except in the circumstances and subject to the conditions specified in subsection (2).
(2) If the Court is satisfied that:
(a) a depositor did not consent to a transfer of any securities; or
(b) a depositor should not have been registered as having title to any securities,
it may award to the depositor mentioned in paragraph (a) or any person who would have been entitled to be registered as having the title to such securities, as the case may be, on such terms as the Court deems to be equitable or make such other order as the Court deems fit, including an order for the transfer of such securities to such depositor or person.
[Ins. by Act A1043]
107E Division 6A - Provisions Applicable to Companies Whose Securities are Deposited With the Central Depository-107E. Non-application of section 223 to disposition made by way of book entry.
Section 223 shall not apply to a disposition of property made by way of book entry by a central depository, but where the Court is satisfied that a party to the disposition, other than the central depository, had notice that a petition had been presented for the winding up of the other party to the disposition, it may award damages against that party on such terms as it thinks equitable or make such other orders as the Court thinks fit, including an order for the transfer of deposited securities by that party but not an order for the rectification of the record of depositors.
[Ins. by Act A1043]
107F Division 6A - Provisions Applicable to Companies Whose Securities are Deposited With the Central Depository-107F. Exemption from Division 6A.
The Minister may, by notice published in the Gazette, exempt any company or class of companies, subject to such terms and conditions as he deems fit to impose, from complying with all or any provisions of this Division in relation to any securities of a company or any class of companies to which this Division applies and may, by notice published in the Gazette , revoke such a notice or vary it in such manner as he thinks fit.
[Ins. by Act A1043]
108 Division 7 - Registration of Charges-108. Registration of charges.
(1) Subject to this Division where a charge to which this section applies is created by a company, there shall be lodged with the Registrar for registration within thirty days after the creation of the charge a statement of the prescribed particulars, and if this section is not complied with in relation to the charge, the charge shall, so far as any security on the company's property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company.
(2) Nothing in subsection (1) shall prejudice any contract or obligation for repayment of the money secured by a charge and when a charge becomes void under this section, the money secured thereby shall immediately become payable.
(3) The charges to which this section applies are:
(a) a charge to secure any issue of debentures;
(b) a charge on uncalled share capital of a company;
(c) a charge on
109 Division 7 - Registration of Charges-109. Duty to register charges.
(1) Documents and particulars required to be lodged for registration in accordance with section 108 may be lodged for registration by the company concerned or by any person interested in the documents, but if default is made in complying with that section the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
(2) Where registration is effected by some person other than the company, that person shall be entitled to recover from the company the amount of any fees properly paid by him on the registration.
110 Division 7 - Registration of Charges-110. Duty of company to register charges existing on property acquired.
(1) Where a company acquires any property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Division or, where a foreign company becomes registered in Malaysia and has prior to such registration created a charge which if it had been created by the company while it was registered in Malaysia would have been required to be registered under this Division or, where a foreign company becomes registered in Malaysia and has prior to such registration acquired property which is subject to a charge of any such kind as would if it had been created by the company after the acquisition and while it was registered in Malaysia have been required to be registered under this Division, the company shall cause a statement of the prescribed particulars to be lodged with the Registrar for registration within thirty days after the date on which
111 Division 7 - Registration of Charges-111. Register of charges to be kept by Registrar.
(1) The Registrar shall keep a register of all the charges lodged for registration under this Division and shall enter in the register with respect to those charges the following particulars:
(a) in the case of a charge to the benefit of which the holders of a series of debentures are entitled, such particulars as are required to be contained in a statement furnished under subsection 108(5); and
(b) in the case of any other charge:
(i) if the charge is a charge created by the company, the date of its creation, and if the charge was a charge existing on property acquired by the company, the date of the acquisition of the property;
(ii) the amount secured by the charge;
(iii) a description sufficient to identify the property charged; and
(iv) the name of the person entitled to the charge.
(2) The Registrar shall issue a certific
112 Division 7 - Registration of Charges-112. Endorsement of certificate of registration on debentures.
(1) The company shall cause to be endorsed on every debenture forming one of a series of debentures, or certificate of debenture stock which is issued by the company and the payment of which is secured by a charge so registered:
(a) a copy of the certificate of registration; or
(b) a statement that the registration has been effected and the date of registration.
(2) Subsection (1) shall not apply to any debenture or certificate of debenture stock which has been issued by the company before the charge was registered.
(3) Every person who knowingly and wilfully authorizes or permits the delivery of any debenture or certificate of debenture stock which is not endorsed as required by this section shall be guilty of an offence against this Act.
Penalty: Two thousand ringgit.
112A Division 7 - Registration of Charges-112A. Assignment and variation of charges.
(1) Where, after a charge on property of a company has been created and registered under this Division, a person other than the original chargee becomes the holder of the charge, the person who becomes the holder of the charge shall, within thirty days after he becomes the holder of the charge:
(a) lodge with the Registrar a notice in the prescribed form stating that he has become the holder of the charge; and
(b) give the company a copy of the notice.
(2) Where, after a charge on property of a company has been created and registered under this Division, there is a variation in the terms of the charge having the effect of:
(a) increasing the amount of the debt or increasing the liabilities (whether present or prospective) secured by the charge; or
(b) prohibiting or restricting the creation of subsequent charges on the property,
113 Division 7 - Registration of Charges-113. Entries of satisfaction and release of property from charge.
(1) Where, with respect to any registered charge:
(a) the debt for which the charge was given has been paid or satisfied in whole or in part; or
(b) the property or undertaking charged or any part thereof has been released from the charge or has ceased to form part of the company's property or undertaking of the company concerned,
the company shall, within fourteen days after the payment, satisfaction, release or cessation referred to above, lodge with the Registrar in the prescribed form a memorandum of satisfaction in whole or in part, or of the fact that the property or undertaking or any part thereof has been released from the charge or has ceased to form part of the company's property or undertaking, as the case may be, and the Registrar shall enter particulars of that memorandum in the register.
(2) The memorandum must be supported by evidence sufficient to satisfy the R
114 Division 7 - Registration of Charges-114. Extension of time and rectification of register of charges.
The Court, on being satisfied that the omission to register a charge (whether under this or any corresponding previous written law) within the time required or that the omission or mis-statement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental or due to inadvertence or to some other sufficient cause or is not of a nature to prejudice the position of creditors or shareholders or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient (including a term or condition that the extension or rectification is to be without prejudice to any liability already incurred by the company or any of its officers in respect of the default), order that the time for registration be extended or that the omission or mis-statement be rectified.
115 Division 7 - Registration of Charges-115. Company to keep copies of charging instruments and register of charges.
(1) Every company shall cause the instrument creating any charge requiring registration under this Division or a copy thereof to be kept at the registered office of the company but in the case of a series of debentures the keeping of a copy of one debenture of the series shall be sufficient for the purposes of this subsection.
(2) Every company shall keep at the registered office of the company a register of charges and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or any property of the company, giving in each case a short description of the property charged, the amount of the charge and (except in the case of securities to bearer) the names of the persons entitled thereto.
(3) The instruments or copies thereof and the register of charges kept in pursuance of this section shall be open to the inspection of any creditor or member of the company without fee and the re
116 Division 7 - Registration of Charges-116. Documents made out of Malaysia.
Where under this Division an instrument, deed, statement or other document is required to be lodged with the Registrar within a specified time, the time so specified shall, by force of this section, in relation to an instrument, deed, statement or other document executed or made in a place out of Malaysia, be extended by seven days or such further period as the Registrar may from time to time allow.
117 Division 7 - Registration of Charges-117. Charges, etc, created before commencement of Act.
Except as is otherwise expressly provided this Division shall apply to any charge that at the date of the commencement of this Act was registrable under any of the repealed written laws but which at that date was not registered under any of those laws.
118 Division 7 - Registration of Charges-118. Application of Division.
A reference in this Division to a company shall be read as including a reference to a foreign company to which Division 2 of Part XI applies, but nothing in this Division applies to a charge on property outside Malaysia of a foreign company.
119 PART V MANAGEMENT AND ADMINISTRATION Division 1 - Office and Name-119. Registered office of company.
(1) A company shall as from the day on which it begin to carry on business or as from the fourteenth day after the date of its incorporation, whichever is the earlier, have a registered office within Malaysia to which all communications and notices may be addressed and which shall be open and accessible to the public for not less than three hours during ordinary business hours on each day, Saturdays, weekly and public holidays excepted.
(2) If default is made in complying with subsection (1) the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
120 PART V MANAGEMENT AND ADMINISTRATION Division 1 - Office and Name-120. Office hours.
(1) Notice in the prescribed form of the situation of the registered office, the days and hours during which it is open and accessible to the public, and of any change therein shall be lodged with the Registrar within one month after the date of incorporation or of any such change, as the case may be, but no notice of the days and hours during which the office is open and accessible to the public shall be required if the office is open for at least five hours during ordinary business hours on each day, Saturdays, weekly and public holidays excepted.
Penalty
(2) If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
121 PART V MANAGEMENT AND ADMINISTRATION Division 1 - Office and Name-121. Publication of name.
(1) The name of the company (whether or not it is carrying on business under a business name) in legible romanised letters and the company number of the company shall appear on:
(a) its seal; and
(b) all business letters, statements of account, invoices, official notices, publications, bills of exchange, promissory notes, endorsements, cheques, orders, receipts and letters of credit of or purporting to be issued or signed by or on behalf of, the company,
and if default is made in complying with this subsection the company shall be guilty of an offence against this Act.
(1A) Where a company has changed its name pursuant to section 23, the former name of the company shall also appear beneath its present name on all documents, business letters, statements of account, invoices, official notices, publications, bills of exchange, promissory notes, endorsements, cheques, orders, rece
122 DIVISION 2 - Directors and Officers-122. Directors.
(1) Every company shall have at least two directors, who each has his principal or only place of residence within Malaysia.
(1A) In subsection (1), "director" shall not include an alternate or substitute director.
(2) No person other than a natural person of full age shall be a director of a company.
(3) The first directors of a company shall be named in the memorandum or articles of the company.
(4) Any provision in the memorandum or articles of a company which was in force immediately before the commencement of this Act and which operated to constitute a corporation as a director of the company shall be read and construed as if it authorized that corporation to appoint a natural person to be a director of that company.
(5) On the commencement of this Act any corporation which holds office as a director of a company shall cease to hold office and the vacancy may be filled as a casual vacancy in accordance with t
122A DIVISION 2 - Directors and Officers-122A. Persons connected with a director.
(1) For the purposes of this Division a person shall be deemed to be connected with a director if he is:
(a) a member of that director's family;
(b) a body corporate which is associated with that director;
(c) a trustee of a trust (other than a trustee for an employee share scheme or pension scheme) under which that director or a member of his family is a beneficiary; or
(d) a partner of that director or a partner of a person connected with that director.
(2) In paragraph (1) (a) , "a member of that director's family" shall include his spouse, parent, child (including adopted child and step-child), brother, sister and the spouse of his child, brother or sister.
(3) For the purposes of paragraph (1) (b) , a body corporate is associated with a director if:
(a) the body corporate is accustomed or is un
123 DIVISION 2 - Directors and Officers-123. Restrictions on appointment or advertisement of director.
(1) A person shall not be named as a director or proposed director in the memorandum or articles of a company or in a prospectus or a statement in lieu of prospectus, unless before the registration of the memorandum or articles or the issue of the prospectus or the lodging of the statement in lieu of prospectus (as the case may be) he has by himself or by his agent authorized in writing for the purpose :
(a) signed the memorandum for a number of shares not less than his qualification, if any;
(b) signed and lodged with the Registrar an undertaking in writing to take from the company and pay for his qualification shares, if any;
(c) made and lodged with the Registrar a statutory declaration to the effect that a number of shares, not less than his qualification, if any, is registered in his name; or
(d) (in the case of a company formed or intended to be formed by way of reco
124 DIVISION 2 - Directors and Officers-124. Qualification of director.
(1) Without affecting the operation of any of the preceding provisions of this Division, every director, who is by the articles required to hold a specified share qualification and who is not already qualified, shall obtain his qualification within two months after his appointment or such shorter period as is fixed by the articles.
(2) Unless otherwise provided by the articles the qualification of any director of a company must be held by him solely and not as one of several joint holders.
(3) A director shall vacate his office if he has not within the period referred to in subsection (1) obtained his qualification or if after so obtaining it he ceases at any time to hold his qualification.
Penalty: One thousand ringgit. Default penalty.
(4) A person vacating office under this section shall be incapable of being reappointed as director until he has obtained his qualification.
125 DIVISION 2 - Directors and Officers-125. Undischarged bankrupts acting as directors.
(1) Every person who being an undischarged bankrupt acts as director of, or directly or indirectly takes part in or is concerned in the management of, any corporation except with the leave of the Court shall be guilty of an offence against this Act.
Penalty: Imprisonment for five years or one hundred thousand ringgit or both.
(2) The Court shall not give leave under this section unless notice of intention to apply therefor has been served on the Minister and on the Official Receiver and the Minister and the Official Receiver or either of them may be represented at the hearing of and may oppose the granting of the application.
126 DIVISION 2 - Directors and Officers-126. Appointment of directors to be voted on individually.
(1) At a general meeting of a public company, a motion for the appointment of two or more persons as directors by a single resolution shall not be made unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it.
(2) A resolution passed in pursuance of a motion made in contravention of this section shall be void, whether or not its being so moved was objected to at the time.
(3) Where a resolution pursuant to a motion made in contravention of this section is passed no provision for the automatic reappointment of retiring directors in default of another appointment shall apply.
(4) For the purposes of this section, a motion for approving a person's appointment or for nominating a person for appointment shall be treated as a motion for his appointment.
(5) Nothing in this section shall apply to a resolution altering the company's articles.
(6) Nothing
127 DIVISION 2 - Directors and Officers-127. Validity of acts of directors and officers.
The acts of a director or manager or secretary shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualification.
128 DIVISION 2 - Directors and Officers-128. Removal of directors.
(1) A public company may by ordinary resolution remove a director before the expiration of his period of office, notwithstanding anything in its memorandum or articles or in any agreement between it and him but where any director so removed was appointed to represent the interests of any particular class of shareholders or debenture holders the resolution to remove him shall not take effect until his successor has been appointed.
(2) Notwithstanding anything to the contrary in the memorandum or articles of the company, special notice shall be required of any resolution to remove a director or to appoint some person in place of a director so removed at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at
129 DIVISION 2 - Directors and Officers-129. Age limit for directors.
(1) Subject to this section but notwithstanding anything in the memorandum or articles of the company no person of or over the age of seventy years shall be appointed or act as a director of a public company or of a subsidiary of a public company.
(2) The office of a director of a public company or of a subsidiary of a public company shall become vacant at the conclusion of the annual general meeting commencing next after he attains the age of seventy years or if he has attained the age of seventy years before the commencement of this Act at the conclusion of the annual general meeting commencing next after the commencement of this Act.
(3) Any act done by a person as director shall be valid notwithstanding that it is afterwards discovered that there was a defect in his appointment or that his appointment had terminated by virtue of subsection (2).
(4) Where the office of a director has become vacant by virtue of subsection (2)
130 DIVISION 2 - Directors and Officers-130. Power to restrain certain persons from managing companies.
(1) Where a person is convicted whether within or without Malaysia:
(a) of any offence in connection with the promotion formation or management of a corporation;
(b) of any offence involving fraud or dishonesty punishable on conviction with imprisonment for three months or more; or
(c) of any offence under section 132, 132A or 303,
and that person, within a period of five years after his conviction or, if he is sentenced to imprisonment, after his release from prison, without the leave of the Court is a director or promoter of or is in any way whether directly or indirectly concerned or takes part in the management in Malaysia of a corporation he shall be guilty of an offence against this Act.
Penalty: Imprisonment for five years or one hundred thousand ringgit or both.
(2) A person intending to apply for the leave of the Court under this section shall
130A DIVISION 2 - Directors and Officers-130A. Disqualification of directors of insolvent companies.
(1) Where on an application under this section it appears to the Court:
(a) that a person:
(i) is or has been a director of a company which has at any time gone into liquidation (whether while he was a director or subsequently) and was insolvent at that time; and
(ii) is or has been a director of such other company which has gone into liquidation within five years of the date on which the first-mentioned company went into liquidation; and
(b) that his conduct as director of any of those companies makes him unfit to be concerned in the management of a company,
the Court may make an order that that person shall not, without the leave of the Court, be a director of or in any way, whether directly or indirectly, be concerned or take part in the management of a company for such period beginning on the date of the order and not exceeding five years
131 DIVISION 2 - Directors and Officers-131. Disclosure of interests in contracts, property, offices, etc.
(1) Subject to this section every director of a company who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company shall, as soon as practicable after the relevant facts have come to his knowledge, declare the nature of his interest at a meeting of the directors of the company.
(2) The requirements of subsection (1) shall not apply in any case where the interest of the director consists only of being a member or creditor of a corporation which is interested in a contract or proposed contract with the first mentioned company if the interest of the director may properly be regarded as not being a material interest.
(3) A director of a company shall not be deemed to be interested or to have been at any time interested in any contract or proposed contract by reason only:
(a) in a case where the contract or proposed contract relates to any loan to the compan
131A DIVISION 2 - Directors and Officers-131A. Interested director not to participate or vote.
(1) Subject to section 131, a director of a company who is in any way, whether directly or indirectly, interested in a contract entered into or proposed to be entered into by the company, unless the interest is one that need not be disclosed under section 131, shall be counted only to make the quorum at the board meeting but shall not participate in any discussion while the contract or proposed contract is being considered at the board meeting and shall not vote on the contract or proposed contract.
(2) Subsection (1) shall not apply to:
(a) a private company unless it is a subsidiary to a public company;
(b) a private company which is a wholly-owned subsidiary of a public company, in respect of any contract or proposed contract to be entered into by the private company with the holding company or with another wholly-owned subsidiary of that same holding company;
(c) any contract o
131B DIVISION 2 - Directors and Officers-131B. Functions and powers of the board.
(1) The business and affairs of a company must be managed by, or under the direction of, the board of directors.
(2) The board of directors has all the powers necessary for managing and for directing and supervising the management of the business and affairs of the company subject to any modification, exception or limitation contained in this Act or in the memorandum or articles of association of the company.
[Ins. by Act A1299]
132 DIVISION 2 - Directors and Officers-132. As to the duty and liability of officers.
(1) A director of a company shall at all times exercise his powers for a proper purpose and in good faith in the best interest of the company.
[Subs. by Act A1299]
(1A) A director of a company shall exercise reasonable care, skill and diligence with:
(a) the knowledge, skill and experience which may reasonably be expected of a director having the same responsibilities; and
(b) any additional knowledge, skill and experience which the director in fact has.
[Ins. by Act A1299]
Business judgment
(1B) A director who makes a business judgment is deemed to meet the requirements of the duty under subsection (1A) and the equivalent duties under the common law and in equity if the director:
(a) makes the business judgment in good faith for a proper purpose;
(b) d
132A DIVISION 2 - Directors and Officers-132A. [Deleted by Act A1299].
[Deleted by Act A1299] .
132B DIVISION 2 - Directors and Officers-132B. [Deleted by Act A1299].
[Deleted by Act A1299] .
132C DIVISION 2 - Directors and Officers-132C. Approval of company required for disposal by directors of company's undertaking or property.
(1) Notwithstanding anything in the memorandum or articles of association of the company, the directors shall not carry into effect any arrangement or transaction for:
(a) the acquisition of an undertaking or property of a substantial value; or
(b) the disposal of a substantial portion of the company's undertaking or property, unless the arrangement or transaction has been approved by the company in a general meeting.
[Subs. by Act A1299]
(1A) For the purpose of subsection (1), in the case of a company where all or any of its shares are listed for quotation on the official list of a Stock Exchange as defined in the Securities Industry Act 1983, the term 'substantial value' or 'substantial portion' shall mean the same value prescribed by the provisions in the listing requirements of the Exchange:
(a) which relates to acquisit
132D DIVISION 2 - Directors and Officers-132D. Approval of company required for issue of shares by directors.
(1) Notwithstanding anything in a company's memorandum or articles, the directors shall not, without the prior approval of the company in general meeting, exercise any power of the company to issue shares.
(2) Approval for the purposes of this section may be confined to a particular exercise of that power or may apply to the exercise of that power generally; and any such approval may be unconditional or subject to conditions.
(3) Any approval for the purposes of this section shall continue in force until :
(a) the conclusion of the annual general meeting commencing next after the date on which the approval was given; or
(b) the expiration of the period within which the next annual general meeting after that date is required by law to be held,
whichever is the earlier; but any approval may be previously revoked or varied by the company in general meeting.
(4) Th
132E DIVISION 2 - Directors and Officers-132E. Substantial property transaction by director or substantial shareholder.
(1) Subject to subsection (2) and section 132F, a company shall not carry into effect any arrangement or transaction where a director or a substantial shareholder of the company or its holding company, or a person connected with such a director or substantial shareholder:
(a) acquires or is to acquire shares or non-cash assets of the requisite value, from the company; or
(b) disposes of or is to dispose of shares or non-cash assets of the requisite value, to the company.
(2) An arrangement or transaction which is carried into effect in contravention of subsection (1) shall be void, unless there is prior approval of the arrangement or transaction:
(a) by a resolution of the company at a general meeting; or
(b) by a resolution of the holding company at a general meeting, if the arrangement or transaction is in favour of a director or substa
132F DIVISION 2 - Directors and Officers-132F. Exception and definition.
Section 132E shall not apply to an arrangement or transaction for the acquisition or disposal of a non-cash asset entered into:
(a) by a company:
(i) and any of its wholly-owned subsidiaries;
(ii) and its holding company which holds all the issued shares of the company; or
(iii) which is a wholly-owned subsidiary of a holding company and another wholly-owned subsidiary company of that same holding company;
(b) by a company which is being wound up, unless the winding up is a members' voluntary winding up;
(c) by a company which is an acquisition or disposal of an asset in the ordinary course of business of the company and is on terms not more favourable than those generally available to the public or employees of the company;
[Am. by Act A1299]
(d) by a company if such arrangement or transacti
132G DIVISION 2 - Directors and Officers-132G. [Deleted by Act A1299].
[Deleted by Act A1299] .
133 DIVISION 2 - Directors and Officers-133. Loans to directors.
(1) A company (other than an exempt private company) shall not make a loan to a director of the company or of a company which by virtue of section 6 is deemed to be related to that company, or enter into any guarantee or provide any security in connection with a loan made to such a director by any other person but nothing in this section shall apply:
(a) subject to subsection (2), to anything done to provide such director with funds to meet expenditure incurred or to be incurred by him for the purposes of the company or for the purpose of enabling him properly to perform his duties as an officer of the company;
(b) to anything done to provide such a director who is engaged in the full-time employment of the company or its holding company, as the case may be, with funds to meet expenditure incurred or to be incurred by him in purchasing or otherwise acquiring a home; or
(c) to any loan made
133A DIVISION 2 - Directors and Officers-133A. Prohibition of loans to persons connected with directors.
(1) Subject to the provisions of this section, a company (other than an exempt private company) shall not:
(a) make a loan to any person connected with a director of the company or of its holding company; or
(b) enter into any guarantee or provide any security in connection with a loan made to such person by any other person.
(2) This section shall not apply:
(a) to anything done by a company where the loan is made, or the guarantee or security is provided in relation to a loan made to a subsidiary or holding company or a subsidiary of its holding company;
(b) to a company whose ordinary business includes the lending of money or the giving of guarantees in connection with loans made by other persons, or to anything done by the company in the ordinary course of that business, if the activities of that company are regulated by any written l
134 DIVISION 2 - Directors and Officers-134. Register of directors' shareholdings, etc.
(1) A company shall keep a register showing with respect to each director of the company particulars of:
(a) shares in the company or in a related corporation being shares in which the director has an interest and the nature and extent of that interest;
(b) debentures of or participatory interests made available by the company or a related corporation being debentures or participatory interests in which the director has an interest and the nature and extent of that interest;
(c) rights or options of the director or of the director and other person in respect of the acquisition or disposal of shares in, debentures of or participatory interests made available by the company or a related corporation; and
(d) contracts to which the director is a party or under which he is entitled to a benefit being contracts under which a person has a right to call for or to make delivery of
135 DIVISION 2 - Directors and Officers-135. General duty to make disclosure.
(1) A director of a company shall give notice in writing to the company:
(a) of such particulars relating to shares, debentures, participatory interests, rights, options and contracts as are necessary for the purposes of compliance by the first-mentioned company with the provisions of section 134;
(b) of particulars of any change in respect of the particulars referred to in paragraph (a) of which notice has been given to the company including the consideration, if any, received as a result of the event giving rise to the change;
(c) of such events and matters affecting or relating to himself as are necessary for the purposes of compliance by the company with the requirements of this Act; and
(d) if he is a director of a public company or of a subsidiary of a public company of the date on which he attains or will attain the age of seventy.
Pen
136 DIVISION 2 - Directors and Officers-136. Prohibition of tax-free payments to directors.
(1) A company shall not pay a director remuneration (whether as director or otherwise) free of income tax, or otherwise calculated by reference to or varying with the amount of his income tax, or the rate of income tax, except under a contract which was in force before the commencement of this Act, and which provides expressly, and not by reference to the articles, for payment of such remuneration.
(2) Any provision contained in a company's articles, or in any contract other than a contract referred to in subsection (1) or in any resolution of a company or of a company's directors for payment to a director of remuneration free of income tax or otherwise calculated by reference to or varying with the amount of his income tax or the rate of income tax shall have effect as if it provided for payment as a gross sum subject to income tax, of the net sum for which it actually provides.
(3) This section shall not apply to remuneration due befo
137 DIVISION 2 - Directors and Officers-137. Payments to director for loss of office, etc.
(1) It shall not be lawful:
(a) for a company to make to any director any payment by way of compensation for loss of office as an officer of that company or of a subsidiary of that company or as consideration for or in connection with his retirement from any such office; or
(b) for any payment to be made to any director of a company in connection with the transfer of the whole or any part of the undertaking or property of the company,
unless particulars with respect to the proposed payment (including the amount thereof) have been disclosed to the members of the company and the proposal has been approved by the company in general meeting and when any such payment has been unlawfully made the amount received by the director shall be deemed to have been received by him in trust for the company.
(2) Where such a payment is to be made to a director in connection with the transfer t
138 DIVISION 2 - Directors and Officers-138. Provisions as to assignment of office.
(1) If in the case of any public company provision is made by the articles or by any agreement entered into between any person and the company for empowering a director or manager of the company to assign his office as such to another person, any such assignment of office shall, notwithstanding anything in the said provision, be of no effect until approved by a special resolution of the company.
(2) This section shall not be construed so as to prevent the appointment by a director (if authorized by the articles and subject thereto) of an alternate or substitute director to act for or on behalf of the director during his inability for any time to act as director.
139 DIVISION 2 - Directors and Officers-139. Secretary.
(1) Every company shall have one or more secretaries each of whom shall be a natural person of full age who has his principal or only place of residence in Malaysia.
(1A) The first secretary of a company shall be named in the memorandum or articles of the company.
(1B) The office of secretary of a company shall not be left vacant for more than one month at any one time.
(1C) Notwithstanding subsection (1B), where none of the directors of the company can be communicated with at the last-known residential address, the secretary may, notwithstanding subsection 141(6), lodge with the Registrar a notice in the prescribed form notifying the Registrar of that fact and of his intention to vacate the office of secretary.
[Ins. by Act A1022]
(1D) Where the secretary has lodged a notice in accordance with subsection (1C), the secretary shall cease to be the secretary of the company on the expiry of on
139A DIVISION 2 - Directors and Officers-139A. Qualification for company secretary.
No person shall act as a secretary of a company unless:
(a) he is a member of a professional body, or any other body, which has for the time being been prescribed by the Minister by notification published in the Gazette ; or
(b) he is licensed by the Registrar for that purpose:
Provided that a person who is a secretary of the company before the coming into operation of this section and who is not a member of a professional or other body as prescribed by the Minister may continue to act as the secretary for that company for a period of not more than twelve months after the coming into operation of this section unless he has obtained a licence pursuant to paragraph (b) .
139B DIVISION 2 - Directors and Officers-139B. Licence to act as company secretary.
(1) For the purpose of paragraph 139A (b) , an application for a licence shall be made to the Registrar in the prescribed form and manner.
(2) The Registrar may require an applicant to supply him with such further information as he considers necessary in relation to the application.
(3) The Registrar shall only grant or renew the licence if:
(a) after consideration of the character, qualification and experience of the applicant; and
(b) after consideration of the interest of the public,
he is of the opinion that the applicant is a fit and proper person to hold a licence.
(4) Every licence granted under this section, including a renewal of the licence, shall be in force for a period of three years after the date of the issue thereof, unless sooner revoked by the Registrar.
(5) An application for renewal of a licence shall be made not later than th
139C DIVISION 2 - Directors and Officers-139C. Disqualification.
(1) A person shall be disqualified to act as a secretary if:
(a) he is an undischarged bankrupt;
(b) he is convicted whether within or without Malaysia of any offence mentioned in subsection 130 (1);
(c) he ceases to be a member of the body prescribed by the Minister under section 139A; or
(d) he ceases to be a holder of a valid licence issued under section 139B.
(2) Notwithstanding subsection (1), the Registrar may require a person to show cause why his licence issued under section 139B should not be revoked or why he should not be disqualified from acting as a secretary of a company, if he is of the opinion that that person has failed to act honestly or has failed to use reasonable diligence in the discharge of his duties as a secretary.
(3) If a person continues to act as a secretary for a company after he is so disqualified under this sect
139D DIVISION 2 - Directors and Officers-139D. Appeal.
(1) A person who is aggrieved by any decision of the Registrar under sections 139B and 139C may appeal to the Minister within thirty days of the decision of the Registrar.
(2) In any appeal under this section, the decision of the Minister shall be final and shall be given effect to by the Registrar.
140 DIVISION 2 - Directors and Officers-140. Provisions indemnifying directors or officers.
(1) Any provision, whether contained in the articles or in any contract with a company or otherwise, for exempting any officer or auditor of the company from, or indemnifying him against, any liability which by law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust, of which he may be guilty in relation to the company, shall be void.
(2) Notwithstanding anything in this section a company may pursuant to its articles or otherwise indemnify any officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application in relation thereto in which relief is under this Act granted to him by the Court.
141 DIVISION 2 - Directors and Officers-141. Register of directors, managers and secretaries.
(1) Every company shall keep at its registered office a register of its directors, managers and secretaries.
(2) The register shall contain with respect to each director his consent in writing to appointment as such and shall specify :
(a) his present full name, any former name, his usual residential address, his date of birth, and his business occupation, if any, and identification, if any; and
(b) particulars of any other directorships of public companies or companies which are subsidiaries of public companies held by the director, but it shall not be necessary for the register to contain particulars of directorships held by a director in a company that by virtue of section 6 is deemed to be related to that company.
(3) Where a person is a director in one or more subsidiaries of the same holding company it shall be sufficient compliance with subsection (2) if it is disclosed
142 Division 3 - Meetings and Proceedings-142. Statutory meeting and statutory report.
(1) Every public company that is a limited company and has a share capital shall, within a period of not less than one month and not more than three months after the date at which it is entitled to commence business, hold a general meeting of the members of the company to be called the "statutory meeting".
(2) The directors shall at least seven days before the day on which the meeting is to be held forward a report to be called the "statutory report" to every member of the company.
(3) The statutory report shall be certified by not less than two directors of the company and shall state:
(a) the total number of shares allotted distinguishing shares allotted as fully or partly paid up otherwise than in cash, and stating in the case of shares partly paid up the extent to which they are so paid up, and in either case the consideration for which they have been allotted;
(b) the total amount of c
143 Division 3 - Meetings and Proceedings-143. Annual general meeting.
(1) A general meeting of every company to be called the "annual general meeting" shall in addition to any other meeting be held once in every calendar year and not more than fifteen months after the holding of the last preceding annual general meeting, but so long as a company holds its first annual general meeting within eighteen months of its incorporation, it need not hold it in the year of its incorporation or in the following year.
(2) Notwithstanding subsection (1) the Registrar on the application of the company, may if for any special reason he thinks fit so to do, extend the period of fifteen months or eighteen months referred to in that subsection, notwithstanding that such period is so extended beyond the calendar year.
(3) Subject to notice being given to all persons entitled to receive notice of the meeting a general meeting may be held at any time and the company may resolve that any meeting held or summoned to be held shal
144 Division 3 - Meetings and Proceedings-144. Convening of extraordinary general meeting on requisition.
(1) The directors of a company, notwithstanding anything in its articles, shall on the requisition of members holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up capital as at the date of the deposit carries the right of voting at general meetings or, in the case of a company not having a share capital, of members representing not less than one-tenth of the total voting rights of all members having at that date a right to vote at general meetings, forthwith proceed duly to convene an extraordinary general meeting of the company to be held as soon as practicable but in any case not later than two months after the receipt by the company of the requisition.
(2) The requisition shall state the objects of the meeting and shall be signed by the requisitionists and deposited at the registered office of the company, and may consist of several documents in like form each signed by one or more requisitioni
145 Division 3 - Meetings and Proceedings-145. Calling of meetings.
(1) Two or more members holding not less than one-tenth of the issued share capital or, if the company has not a share capital, not less than five per centum in number of the members of the company or such lesser number as is provided by the articles may call a meeting of the company.
(2) A meeting of a company or of a class of members, other than a meeting for the passing of a special resolution, shall be called by notice in writing of not less than fourteen days or such longer period as is provided in the articles.
(2A) Notwithstanding subsection (2), the annual general meeting of a public company shall be called by a notice in writing of not less than twenty-one days before the annual general meeting or such longer period as is provided in the articles.
[Ins. by Act A1299]
(3) A meeting shall, notwithstanding that it is called by notice shorter than is required by subsection (2) or (2A) be deeme
145A Division 3 - Meetings and Proceedings-145A. Venues and technology for company meetings.
A company shall hold all meetings of its members within Malaysia and may hold a meeting of its members within Malaysia at more than one venue using any technology that allows all members a reasonable opportunity to participate.
[Subs. by Act A1299]
146 Division 3 - Meetings and Proceedings-146. Articles as to right to demand a poll.
(1) Any provision contained in a company's articles shall be void so far as it would have the effect:
(a) of excluding the right to demand a poll at a general meeting on any question or matter other than the election of the chairman of the meeting or the adjournment of the meeting;
(b) of making ineffective a demand for a poll on any question or matter other than the election of the chairman of the meeting or the adjournment of the meeting that is made:
(i) by not less than five members having the right to vote at the meeting;
(ii) by a member representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or
(iii) by a member holding shares in the company conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up
147 Division 3 - Meetings and Proceedings-147. Quorum, chairman, voting, etc, at meetings.
(1) So far as the articles do not make other provision in that behalf and subject to section 55:
(a) two members of the company, personally present shall be a quorum;
(b) any member elected by the members present at a meeting may be chairman thereof;
(c) in the case of a company having a share capital:
(i) on a show of hands each member who is personally present and entitled to vote shall have one vote; and
(ii) on a poll each member shall have one vote in respect of each share held by him and where all or part of the share capital consists of stock or units of stock each member shall have one vote in respect of the stock or units of stock held by him which is or are or were originally equivalent to one share; and
(d) in the case of a company not having a share capital every member shall have one vote.
(2) On
148 Division 3 - Meetings and Proceedings-148. As to member's rights at meetings.
(1) Subject to subsection (2), every member shall notwithstanding any provision in the memorandum or articles have a right to attend any general meeting of the company and to speak and vote on any resolution before the meeting:
Provided that the company's articles may provide that a member shall not be entitled to vote unless all calls or other sums personally payable by him in respect of shares in the company have been paid.
(2) Notwithstanding subsection (1), the articles may provide that the right of holders of preference shares to attend and vote at a general meeting of the company may be suspended upon such conditions as may be specified:
Provided that any preference shares issued after the commencement of this Act shall carry the right to attend any general meeting and in a poll thereat to at least one vote for each ringgit or part of a ringgit that is paid up on each share:
(a) during such pe
149 Division 3 - Meetings and Proceedings-149. Proxies.
(1) A member of a company entitled to attend and vote at a meeting of the company, or at a meeting of any class of members of the company, shall be entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead of the member at the meeting and a proxy appointed to attend and vote instead of a member shall also have the same right as the member to speak at the meeting, but unless the articles otherwise provide :
(a) a proxy shall not be entitled to vote except on a poll;
(b) a member shall not be entitled to appoint a person who is not a member as his proxy unless that person is an advocate, an approved company auditor or a person approved by the Registrar in a particular case;
(c) a member shall not be entitled to appoint more than two proxies to attend and vote at the same meeting; and
(d) where a member appoints two proxies the appoi
150 Division 3 - Meetings and Proceedings-150. Power of Court to order meeting.
If for any reason it is impracticable to call a meeting in any manner in which meetings may be called or to conduct the meeting in the manner prescribed by the articles or this Act the Court may, either of its own motion or on the application of any director or of any member who would be entitled to vote at the meeting or of the personal representative of any such member, order a meeting to be called, held and conducted in such manner as the Court thinks fit, and may give such ancillary or consequential directions as it thinks expedient, including a direction that one member present in person or by proxy shall be deemed to constitute a meeting or that the personal representative of any deceased member may exercise all or any of the powers that the deceased member could have exercised if he were present at the meeting.
151 Division 3 - Meetings and Proceedings-151. Circulation of members' resolutions, etc.
(1) Subject to this section a company shall on the requisition in writing of such number of members of the company as is specified in subsection (2) and (unless the company otherwise resolves) at the expense of the requisitionists:
(a) give to members of the company entitled to receive notice of the next annual general meeting notice of any resolution which may properly be moved and is intended to be moved at that meeting; and
(b) circulate to members entitled to have notice of any general meeting sent to them any statement of not more than one thousand words with respect to the matter referred to in any proposed resolution or the business to be dealt with at that meeting.
(2) The number of members necessary for a requisition under subsection (1) shall be:
(a) any number of members representing not less than one-twentieth of the total voting rights of all
152 Division 3 - Meetings and Proceedings-152. Special resolutions.
(1) A resolution shall be a special resolution when it has been passed by a majority of not less than three-fourths of such members as being entitled so to do vote in person or, where proxies are allowed, by proxy, at a general meeting of which not less than twenty-one days' notice specifying the intention to propose the resolution as a special resolution has been duly given.
(2) Notwithstanding subsection (1), if it is so agreed by a majority in number of the members having the right to attend and vote at the meeting, being a majority which together holds not less than ninety-five per centum in nominal value of the shares giving that right or, in the case of a company not having a share capital, together represents not less than ninety-five per centum of the total voting rights that could be exercised at that meeting, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty-one days' notice has bee
152A Division 3 - Meetings and Proceedings-152A. Resolution signed by all members deemed to be duly passed at meeting.
(1) Notwithstanding anything to the contrary in this Act or the articles of the company, a resolution in writing signed by or on behalf of all persons for the time being entitled to receive notice of, and to attend and vote at general meetings of a company shall, for the purposes of this Act and the articles of the company, be treated as a resolution duly passed at a general meeting of the company and, where relevant, as a special resolution so passed.
(2) Any such resolution shall be deemed to have been passed at a meeting held at the registered office on the date on which it was signed by the last member.
(3) This section shall not be construed as requiring that the persons signing a resolution under this section shall sign the same document containing the resolution; but where two or more documents are used for the purpose of obtaining signatures under this section in respect of any resolution, each such document shall be certified i
153 Division 3 - Meetings and Proceedings-153. Resolution requiring special notice.
Where by this Act special notice is required of a resolution, the resolution shall not be effective unless notice of the intention to move it has been given to the company not less than twenty-eight days before the meeting at which it is moved, and the company shall give its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice thereof, in any manner allowed by the articles, not less than fourteen days before the meeting, but if after notice of the intention to move such a resolution has been given to the company, a meeting is called for a date twenty-eight days or less after the notice has been given, the notice, although not given to the company within the time required by this section, shall be deemed to be properly given.
154 Division 3 - Meetings and Proceedings-154. Registration and copies of certain resolutions and agreements.
(1) A printed copy of:
(a) every special resolution; and
(b) every resolution or agreement which effectively binds any class of shareholders whether agreed to by all the members of that class or not,
shall except where otherwise expressly provided by this Act within one month after the passing or making thereof, be lodged by the company with the Registrar.
(2) Where articles have not been registered a printed copy of every resolution or agreement to which this section applies shall be forwarded to any member at his request on payment of one ringgit or such less sum as the company directs.
(3) In the event of any default in complying with subsection (1) the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
(4) In the event of any default in complying
155 Division 3 - Meetings and Proceedings-155. Resolutions at adjourned meetings.
Where a resolution is passed at an adjourned meeting of a company or of holders of any class of shares or of directors the resolution shall for all purposes be treated as having been passed on the date on which it was in fact passed and not on any earlier date.
156 Division 3 - Meetings and Proceedings-156. Minutes of proceedings.
(1) Every company shall cause:
(a) minutes of all proceedings of general meetings and of meetings of its directors and of its managers, if any, to be entered in books kept for that purpose within fourteen days of the date upon which the relevant meeting was held; and
(b) those minutes to be signed by the chairman of the meeting at which the proceedings were had or by the chairman of the next succeeding meeting.
(2) Any minute so entered that purports to be signed as provided in subsection (1) shall be evidence of the proceedings to which it relates.
(3) Where minutes have been so entered and signed, then, until the contrary is proved:
(a) the meeting shall be deemed to have been duly held and convened;
(b) all proceedings had thereat shall be deemed to have been duly had; and
(c) all appointments of officers or li
157 Division 3 - Meetings and Proceedings-157. Inspection of minute books.
(1) The books containing the minutes of proceedings of any general meeting shall be kept by the company at the registered office of the company, and shall be open to the inspection of any member without charge.
(2) Any member shall be entitled to be furnished within fourteen days after he has made a request in writing in that behalf to the company with a copy of any minutes specified in subsection (1) at a charge not exceeding one ringgit for every hundred words thereof.
(3) If any copy required under this section is not so furnished the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: Five hundred ringgit. Default penalty.
158 Division 4 - Register of Members-158. Register and index of members.
(1) Every company shall keep a register of its members and enter therein:
(a) the names, addresses, the number of the identity card issued under the National Registration Act 1959 [Act 78] , if any, nationality and any other relevant information and particulars of the members, and in the case of a company having a share capital a statement of the shares held by each member, distinguishing each share by its number, if any, or by the number, if any, of the certificate evidencing the members' holding and of the amount paid or agreed to be considered as paid on the shares of each member;
(b) the date at which the name of each person was entered in the register as a member;
(c) the date at which any person who ceased to be a member during the previous seven years so ceased to be a member; and
(d) in the case of a company having a share capital, the date of every allotme
159 Division 4 - Register of Members-159. Where register to be kept.
(1) The register of members and index, if any, shall be kept at the registered office of the company, but:
(a) if the work of making them up is done at another office of the company within Malaysia they may be kept at that other office; or
(b) if the company arranges with some other person to make up the register and index, if any, on its behalf they may be kept at the office of that other person at which the work is done if that office is within Malaysia.
(2) Every company shall, within fourteen days after the register and index, if any, are first kept at a place other than the registered office, lodge with the Registrar notice of the place where the register and index, if any, are kept and shall within fourteen days after any change in the place at which the register and index, if any, are kept, lodge with the Registrar notice of the change.
(3) If default is made in complyi
160 Division 4 - Register of Members-160. Inspection and closing of register.
(1) A company may, on giving not less than fourteen days notice to the Registrar, close the register of members or any class of members for any time, but so that no part of the register shall be closed for more than thirty days in the aggregate in any calendar year.
(2) The register and index shall be open to the inspection of any member without charge and of any other person on payment for each inspection of one ringgit or such less sum as the company requires.
(3) Any member or other person may request the company to furnish him with a copy of the register, or of any part thereof, but only so far as it relates to names, addresses, number of shares held and amounts paid on shares, on payment in advance of one ringgit or such less sum as the company requires for every hundred words or fractional part thereof required to be copied and the company shall cause any copy so requested by any person to be sent to that person within a period of
161 Division 4 - Register of Members-161. Consequences of default by agent.
Where, by virtue of paragraph 159(1) (b) , the register of members is kept at the office of some person other than the company, and by reason of any default of his the company fails to comply with subsection 159(1) or (2) or with section 160 or with any requirements of this Act as to the production of the register, that other person shall be liable to the same penalties as if he were an officer of the company who was in default, and the power of the Court under section 362 shall extend to the making of orders against that other person and his officers and servants.
162 Division 4 - Register of Members-162. Power of Court to rectify register.
(1) If:
(a) the name of any person is without sufficient cause entered in or omitted from the register; or
(b) default is made or unnecessary delay takes place in entering in the register the fact of any person having ceased to be a member,
the person aggrieved or any member or the company may apply to the Court for rectification of the register, and the Court may refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party to the application.
(2) On any application under subsection (1) the Court may decide:
(a) any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members or between members or alleged members on the one hand and the compa
163 Division 4 - Register of Members-163. Limitation of liability of trustee, etc., registered as owner of shares.
(1) Any trustee, executor or administrator of the estate of any deceased person who was registered in a register or branch register kept in Malaysia as the holder of a share in any corporation may become registered as the holder of that share as trustee executor or administrator of that estate and shall, in respect of that share, be subject to the same liabilities and no more as he would have been subject to if the share had remained registered in the name of the deceased person.
(2) Any trustee, executor or administrator of the estate of any deceased person who was beneficially entitled to a share in any corporation, being a share registered in a register or branch register kept in Malaysia may, with the consent of the corporation and of the registered holder of that share, become registered as the holder of that share as trustee, executor or administrator of that estate and shall, in respect of the share, be subject to the same liabilities an
164 Division 4 - Register of Members-164. Branch registers.
(1) A company having a share capital may cause to be kept in any place outside Malaysia a branch register of members which shall be deemed to be part of the company's register of members.
(2) The company shall lodge with the Registrar notice of the situation of the office where any branch register is kept and of any change in its situation, and if it is discontinued of its discontinuance, and any such notice shall be lodged within one month after the opening of the office or of the change or discontinuance, as the case may be.
(3) A branch register shall be kept in the same manner in which the principal register is by this Act required to be kept.
(4) The company shall transmit to the office at which its principal register is kept a copy of every entry in its branch register as soon as may be after the entry is made, and shall cause to be kept at that office duly entered up from time to time a copy of its branch register, which
165 Division 5 - Annual Return-165. Annual return by company having a share capital.
(1) Every company having a share capital shall make a return containing the particulars referred to in Part I of the Eighth Schedule and accompanied by such copies of documents as are required to be included in the return in accordance with Part II of that Schedule and such of the certificates and other particulars prescribed in that Part as are applicable to the company.
(2) The return shall be in accordance with the form set out in Part II of the Eighth Schedule or as near thereto as circumstances admit and shall be made up to the date of the annual general meeting of the company in the year or a date not later than the fourteenth day after the date of the annual general meeting.
(3) In the case of a company keeping a branch register the particulars of the entries in that register shall, so far as they relate to matters which are required to be stated in the return, be included in the return made next after copies of those entries are
165A Division 5 - Annual Return-165A. Auditor's statements.
(1) A company that is not required by this Act to lodge accounts with the Registrar shall include in or attach to its annual return under section 165 a statement relating to the accounts of the company required to be laid before the company at its annual general meeting held on the date to which the return is made up or if an annual general meeting is not held on that date, the annual general meeting last preceding that date, signed by the auditor of the company:
(a) stating whether the company has in his opinion kept proper accounting records and other books during the period covered by those accounts;
(b) stating whether the accounts have been audited in accordance with this Act;
(c) stating whether the auditor's report on the accounts was made subject to any qualification, or included any comment made under subsection 174(3) and, if so, particulars of the qualification or comment; and
166 Division 5 - Annual Return-166. Exemption from filing list of members with annual return for certain public companies.
(1) A public company which:
(a) has more than five hundred members; and
(b) provides reasonable accommodation and facilities for persons to inspect and take copies of its list of members and its particulars of shares transferred,
need not comply with such of the provisions of this Division and the Eighth Schedule as relate to the inclusion in the annual return of a list of members if there is included in the annual return:
(A) a certificate by the secretary that the company is of a kind to which this subsection applies; and
(B) a list showing the prescribed particulars of the twenty largest holders of each class of equity shares.
(2) The Minister may, by notice published in the Gazette , require any company to which subsection (1) applies to comply with all or any of the provisions of this Division or of the Eighth Schedule re
166A PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-166A. Compliance with approved accounting standards.
(1) In this Part unless the contrary intention appears, "approved accounting standards" shall have the meaning assigned thereto in section 2 of the Financial Reporting Act 1997.
(2) The approved accounting standards shall apply to the accounts of a company or the consolidated accounts of a holding company if, at the time when the accounts or consolidated accounts are made out, the approved accounting standards:
(a) apply in relation to the financial year of the company or the holding company to which the accounts or consolidated accounts relate; and
(b) are relevant to those accounts or consolidated accounts.
(3) Without prejudice to the generality of the provisions of this Division, the directors of a company shall ensure that the accounts of the company and, if the company is a holding company for which consolidated accounts are required, the consolidated accounts of the com
167 PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-167. Accounts to be kept.
(1) Every company and the directors and managers thereof shall cause to be kept such accounting and other records as will sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets and any documents required to be attached thereto to be prepared from time to time, and shall cause those records to be kept in such manner as to enable them to be conveniently and properly audited.
(1A) Every company and the directors and managers thereof shall cause appropriate entries to be made in the accounting and other records within sixty days of the completion of the transactions to which they relate.
(2) The company shall retain the records referred to in subsection (1) for seven years after the completion of the transactions or operations to which they respectively relate.
(3) The records referred to in subsection (1) shall be kept at the registered office
167A PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-167A. System of internal control.
Except as otherwise provided for in the listing requirement of a Stock Exchange in relation to companies whose shares are listed for quotation on the Stock Exchange, the directors of a public company or a subsidiary of a public company shall have in place a system of internal control that will provide a reasonable assurance that:
(a) assets of the company are safeguarded against loss from unauthorized use or disposition; and
(b) all transactions are properly authorized and that they are recorded as necessary to enable the preparation of true and fair profit and loss accounts and balance sheets and to give a proper account of the assets.
Penalty: Imprisonment of six months or ten thousand ringgit or both.
[Ins. by Act A1299]
168 PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-168. As to accounting periods of companies within the same group.
(1) Subject to subsections (11) and (12) the directors of every holding company that is not a foreign company shall take such steps as are necessary to ensure that:
(a) within two years after the commencement of this Act, the financial years of each of its subsidiaries coincide with the financial year of the holding company; and
(b) within two years after any corporation becomes a subsidiary of the holding company, the financial year of that corporation coincides with the financial year of the holding company.
(2) Where the financial year of a holding company that is not a foreign company and that of each of its subsidiaries coincide, the directors of the holding company shall at all times take such steps as are necessary to ensure that without the consent of the Registrar the financial year of the holding company or any of its subsidiaries is not altered so that all such financial ye
169 PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-169. Profit and loss account, balance sheet and directors' report.
(1) The directors of every company shall, at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year at intervals of not more than fifteen months, lay before the company at its annual general meeting a profit and loss account for the period since the preceding account (or in the case of the first account, since the incorporation of the company) made up to a date not more than six months before the date of the meeting.
(2) Notwithstanding subsection (1) the Registrar on application by the company, if for any special reason he thinks fit so to do, may extend the periods of eighteen months and fifteen months referred to in that subsection and with respect to any year extend the period of six months referred to in that subsection, notwithstanding that that period is so extended beyond the calendar year.
(3) The directors of every company shall cause to be made out
169A PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-169A. Relief from requirements as to form and content of accounts and reports.
(1) The directors of a company may apply to the Registrar in writing for an order relieving them from any requirement of this Act relating to the form and content of accounts or consolidated accounts or to the form and content of the report required by subsection 169(6) and the Registrar may make such an order either unconditionally or on condition that the directors comply with such other requirements relating to the form and content of the accounts or consolidated accounts or report as the Registrar thinks fit to impose.
(2) The Registrar may where he considers it appropriate make an order in respect of any class of companies relieving the directors of a company in that class from compliance with any specified requirements of this Act relating to the form and content of accounts or consolidated accounts or to the form and content of the report required by subsection 169(6) and the order may be made either unconditionally or on condition that
169B PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-169B. Power of Registrar to require a statement of valuation of assets.
(1) The Registrar may, with notice in writing, require the directors of any company to supply a statement of valuation at current value of assets and liabilities of the company within the time specified in the notice.
(2) The Registrar may, on the application of the company and in his absolute discretion, extend the period of time so specified in the notice referred to in subsection (1).
170 PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-170. Members of company entitled to balance sheet, etc.
(1) A copy of every profit and loss account and balance sheet (including every document required by law to be attached thereto) which is to be laid before company in general meeting accompanied by a copy of the auditor's report thereon shall, not less than fourteen days before the date of the meeting, be sent to all persons entitled to receive notice of general notice of general meeting of the company:
Provided that if the copies of the documents aforesaid are sent less than fourteen days before the date of the meeting, they shall, notwithstanding that fact, be deemed to have been duly sent if it is so agreed by all the members entitled to attend and vote at the meeting.
(2) Any member of a company (whether he is or is not entitled to have sent to him copies of the profit and loss accounts and balance sheets) to whom copies have not been sent and any holder of a debenture shall, on a request being made by him to the company, be furnishe
171 PART VI ACCOUNTS AND AUDIT Division 1 - Accounts-171. Penalty.
(1) If any director of a company fails to comply or to take all reasonable steps to secure compliance by the company with the foregoing provisions of this Division or has by his own wilful act been the cause of any default by the company thereunder, he shall be guilty of an offence against this Act.
Penalty: Imprisonment for five years or thirty thousand ringgit.
(2) [Deleted by Act A616].
(3) A person shall not be sentenced to imprisonment for any offence under this section unless in the opinion of the Court dealing with the case the offence was committed wilfully.
172 Division 2 - Audit-172. Appointment and remuneration of auditors.
(1) At any time before the first annual general meeting of a company, the directors of the company may appoint, or (if the directors do not make an appointment) the company at a general meeting may appoint, a person to be the auditor of the company, and any auditor so appointed shall, subject to this section, hold office until the conclusion of the first annual general meeting.
(2) A company shall at each annual general meeting of the company appoint a person to be the auditor of the company, and any auditors so appointed shall, subject to this section, hold office until the conclusion of the next annual general meeting of the company.
(3) Subject to subsections (7) and (8), the directors of a company may appoint an approved company auditor to fill any casual vacancy in the office of auditor of the company, but while such a vacancy continues the surviving or continuing auditor, if any, may act.
(4) An auditor of a company may be
172A Division 2 - Audit-172A. Duty to inform upon ceasing to hold office as auditor.
Where an auditor has made written representations to the company pursuant to subsection 172(5) or if an auditor gives notice to the directors of the company of his desire to resign as auditor of the company pursuant to subsection 172(15), he shall within seven days of the submission of the written representations or the submission of his notice of resignation, submit a copy of the written representations or his written explanation of his resignation, to the Registrar and, to the Stock Exchange where the company is a company whose shares or debentures are listed on the official list of a Stock Exchange as defined in the Securities Industry Act 1983.
[Ins. by Act A1299]
173 Division 2 - Audit-173. Auditors' remuneration.
(1) If a company is served with a notice sent by or on behalf of:
(a) at least five per centum of the total number of members of the company; or
(b) the holders in aggregate of not less than five per centum in nominal value of the company's issued share capital,
requiring particulars of all emoluments paid to or receivable by the auditor of the company or any person who is a partner or employer or employee of the auditor, by or from the company or any subsidiary in respect of services other than auditing services rendered to the company, the company shall forthwith:
(c) prepare or cause to be prepared a statement showing particulars of all emoluments paid to the auditor or other person and of the services in respect of which the payments have been made for the financial year immediately preceding the service of the notice;
(d) forward a c
174 Division 2 - Audit-174. Powers and duties of auditors as to reports on accounts.
(1) Every auditor of a company shall report to the members on the accounts required to be laid before the company in general meeting and on the company's accounting and other records relating to those accounts and if it is a holding company for which consolidated accounts are prepared shall also report to the members on the consolidated accounts.
(2) An auditor shall, in a report under this section, state:
(a) whether the accounts and, if the company is a holding company for which consolidated accounts are prepared, the consolidated accounts are in his opinion property drawn up:
(i) so as to give a true and fair view of the matters required by section 169 to be dealt with in the accounts and, if there are consolidated accounts, in the consolidated accounts;
(ii) in accordance with this Act so as to give a true and fair view of the company's affairs; and
(iii) in accordance with
174A Division 2 - Audit-174A. Auditors and other persons to enjoy qualified privilege in certain circumstances.
(1) An auditor shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of any statement which he makes in the course of his duties as auditor, whether the statement is made orally or in writing.
(2) A person shall not, in the absence of malice on his part, be liable to any action for defamation at the suit of any person in respect of the publication of any document prepared by an auditor in the course of his duties and required by or under this Act to be lodged with the Registrar.
(2A) No auditor shall be liable to be sued in any court or be subject to any criminal or disciplinary proceedings for any report under section 174 submitted by the auditor in good faith and in the intended performance of any duty imposed on the auditor under this Act.
[Ins. by Act A1299]
(3) This section does not limit or affect any other right, privileg
175 Division 2 - Audit-175. Duties of auditors to trustee for debenture holders.
(1) The auditor of a borrowing corporation shall within seven days after furnishing the corporation with any balance sheet or profit and loss account or any report certificate or other document which he is required by this Act or by the debentures or trust deed to give to the corporation, send by post to every trustee for the holders of debentures of the borrowing corporation a copy thereof.
(2) Where in the performance of his duties as auditor of a borrowing corporation the auditor becomes aware of any matter which is in his opinion relevant to the exercise and performance of the powers and duties imposed by this Act or by any trust deed upon any trustee for the holders of debentures of the corporation he shall, within seven days after so becoming aware of the matter, send by post a report in writing on the matter to the borrowing corporation and a copy thereof to the trustee.
Penalty: One thousand ringgit. Default penalty.
176 PART VII ARRANGEMENTS AND RECONSTRUCTIONS-176. Power to compromise with creditors and members.
(1) Where a compromise or arrangement is proposed between a company and its creditors or any class of them or between the company and its members or any class of them the Court may, on the application in a summary way of the company or of any creditor or member of the company, or in the case of a company being wound up of the liquidator, order a meeting of the creditors or class of creditors or of the members of the company or class of members to be summoned in such manner as the Court directs.
(2) A meeting held pursuant to an order of the Court made under subsection (1) may be adjourned from time to time if the resolution for adjournment is approved by a majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members present and voting either in person or by proxy at the meeting.
(3) If a majority in number representing three-fourths in value of the creditors or class of cre
177 PART VII ARRANGEMENTS AND RECONSTRUCTIONS-177. Information as to compromise with creditors and members.
(1) Where a meeting is summoned under section 176 there shall:
(a) with every notice summoning the meeting which is sent to a creditor or member, be sent also a statement explaining the effect of the compromise or arrangement and in particular stating any material interests of the directors, whether as directors or as members or as creditors of the company or otherwise, and the effect thereon of the compromise or arrangement so far as it is different from the effect on the like interests of other persons; and
(b) in every notice summoning the meeting which is given by advertisement, be included either such a statement or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement.
(2) Where the compromise or arrangement affects the rights of debenture holders, the statement shall give the like e
178 PART VII ARRANGEMENTS AND RECONSTRUCTIONS-178. Provisions for facilitating reconstruction and amalgamation of companies.
(1) Where an application is made to the Court under this Part for the approval of a compromise or arrangement and it is shown to the Court that the compromise or arrangement has been proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of any two or more companies and that under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as the "transferor company") is to be transferred to another company (in this section referred to as the "transferee company"), the Court may either by the order approving the compromise or arrangement or by any subsequent order provide for all or any of the following matters:
(a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of the transferor company;
(b)
179 PART VII ARRANGEMENTS AND RECONSTRUCTIONS-179. [Repealed by Act 498].
[Repealed by Act 498] .
180 PART VII ARRANGEMENTS AND RECONSTRUCTIONS-180. Power to acquire shares of shareholders dissenting from scheme or contract approved by majority.
(1) Where a scheme or contract involving the transfer of all of the shares or all of the shares in any particular class in a company (in this section referred to as the "transferor company") to another company or corporation (in this section referred to as the "transferee company") has within four months after the making of the offer in that behalf by the transferee company been approved as to the shares or as to each class of shares whose transfer is involved by the holders of not less than nine-tenths in nominal value of those shares or of the shares of that class (other than shares already held at the date of the offer by, or by a nominee for, the transferee company or its subsidiary), the transferee company may at any time within two months after the offer has been so approved give notice in the prescribed manner to any dissenting shareholder that it desires to acquire his shares and when such a notice is given the transferee company shall, unless
181 PART VII ARRANGEMENTS AND RECONSTRUCTIONS-181. Remedy in cases of an oppression.
(1) Any member or holder of a debenture of a company or, in the case of a declared company under Part IX, the Minister, may apply to the Court for an order under this section on the ground:
(a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or holders of debentures including himself or in disregard of his or their interests as members, shareholders or holders of debentures of the company; or
(b) that some act of the company has been done or is threatened or that some resolution of the members, holders of debentures or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or holders of debentures (including himself).
(2) If on such application the Court is of the opinion that either of thos
181A PART VII ARRANGEMENTS AND RECONSTRUCTIONS-181A. Proceedings on behalf of a company.
(1) A complainant may, with the leave of the Court, bring, intervene in or defend an action on behalf of the company.
(2) Proceedings brought under this section shall be brought in the company's name.
(3) The right of any person to bring, intervene in, defend or discontinue any proceedings on behalf of a company at common law is not abrogated.
(4) For the purposes of this section and sections 181B and 181E, "complainant" means:
(a) a member of a company, or a person who is entitled to be registered as member of a company;
(b) a former member of a company if the application relates to circumstances in which the member ceased to be a member;
(c) any director of a company; or
(d) the Registrar, in case of a declared company under Part IX.
[Ins. by Act A1299]
181B PART VII ARRANGEMENTS AND RECONSTRUCTIONS-181B. Leave of Court.
(1) An application for leave of the Court under section 181A shall be made by originating summons and no appearance need to be entered.
(2) The complainant shall give thirty days notice in writing to the directors of his intention to apply for the leave of Court under section 181A.
(3) Where leave has been granted pursuant to an application under section 181A, the complainant shall initiate proceedings in Court within thirty days from the grant of leave.
(4) In deciding whether or not leave shall be granted the Court shall take into account whether:
(a) the complainant is acting in good faith; and
(b) it appears prima facie to be in the best interest of the company that the application for leave be granted.
[Ins. by Act A1299]
181C PART VII ARRANGEMENTS AND RECONSTRUCTIONS-181C. Leave to discontinue, compromise or settle proceedings.
Any proceedings brought, intervened in or defended under section 181A shall not be discontinued, compromised or settled except with the leave of the Court.
[Ins. by Act A1299]
181D PART VII ARRANGEMENTS AND RECONSTRUCTIONS-181D. Effect of ratification.
If members of a company, ratify or approve the conduct, the subject matter of the action:
(a) the ratification or approval does not prevent any person from bringing, intervening in or defending proceedings with the leave of the Court;
(b) the application for leave or action brought or intervened in shall not be stayed or dismissed by reason only of the ratification or approval; and
(c) the Court may take into account the ratification or approval in determining what order to make.
[Ins. by Act A1299]
181E PART VII ARRANGEMENTS AND RECONSTRUCTIONS-181E. Powers of the Court.
(1) In granting leave under this section and sections 181B and 181E, the Court may make such orders as it thinks appropriate including an order:
(a) authorizing the complainant or any other person to control the conduct of the proceedings;
(b) giving directions for the conduct of the proceedings;
(c) for any person to provide assistance and information to the complainant, including to allow inspection of company's books;
(d) requiring the company to pay reasonable legal fees and disbursements incurred by the complainant in connection with the application or action or pending the grant of the leave or pending the grant of any injunction by the Court hearing the application for leave under this section; or
(e) the costs of the complainant, the company or any other person for proceedings taken under this section, including an order as to indemnification for c
182 PART VIII RECEIVERS AND MANAGERS-182. Disqualification for appointment as receiver.
(1) The following shall not be qualified to be appointed and shall not act as receiver of the property of a company:
(a) a corporation;
(b) an undischarged bankrupt;
(c) a mortgagee of any property of the company, an auditor of the company or an officer of the company or of any corporation which is a mortgagee of the property of the company; and
(d) any person who is not an approved liquidator or the Official Receiver.
(2) Nothing in paragraph (1) (a) or (d) shall apply to any corporation authorized by any written law to act as receiver of the property of a company.
(3) Nothing in this section shall disqualify a person from acting as receiver of the property of a company if acting under an appointment validly made before the commencement of this Act.
183 PART VIII RECEIVERS AND MANAGERS-183. Liability of receiver.
(1) Any receiver or other authorized person entering into possession of any assets of a company for the purpose of enforcing any charge shall, notwithstanding any agreement to the contrary, but without prejudice to his rights against the company or any other person, be liable for debts incurred by him in the course of the receivership or possession, for services rendered, goods purchased or property hired, leased, used or occupied.
(2) Subsection (1) shall not be so construed as to constitute the person entitled to the charge a mortgagee in possession.
Application for directions.
(3) A receiver or manager of the property of a company may apply to the Court for directions in relation to any matter arising in connection with the performance of his functions.
(4) Where a receiver or manager has been appointed to enforce any charge for the benefit of holders of debentures of the company any such debenture holder may
184 PART VIII RECEIVERS AND MANAGERS-184. Power of Court to fix remuneration of receivers or managers.
(1) The Court may, on application by the liquidator of a company, by order fix the amount to be paid by way of remuneration to any person who, under the powers contained in any instrument, has been appointed as receiver or manager of the property of the company.
(2) The power of the Court shall, where no previous order has been made with respect thereto:
(a) extend to fixing the remuneration for any period before the making of the order or the application therefor;
(b) be exercisable notwithstanding that the receiver or manager has died or ceased to act before the making of the order or the application therefor; and
(c) where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that fixed for that period, extend to requiring him or his personal representatives to account for the excess or su
185 PART VIII RECEIVERS AND MANAGERS-185. Appointment of liquidator as receiver.
Where an application is made to the Court to appoint a receiver on behalf of the debenture holders or other creditors of a company which is being wound up by the Court, the liquidator may be so appointed.
186 PART VIII RECEIVERS AND MANAGERS-186. Notification of appointment of receiver.
(1) If any person obtains an order for the appointment of a receiver or manager of the property of a company or of the property within Malaysia of any other corporation, or appoints such a receiver or manager under any powers contained in any instrument, he shall, within seven days after he has obtained the order or made the appointment, lodge notice of the fact with the Registrar.
(2) Where any person appointed receiver or manager of the property of a company or other corporation under the powers contained in any instrument ceases to act as such he shall, within seven days thereafter, lodge with the Registrar notice to that effect.
(3) Every person who makes default in complying with the requirements of this section shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
187 PART VIII RECEIVERS AND MANAGERS-187. Statement that receiver appointed.
(1) Where a receiver or manager of the property of a corporation has been appointed, every invoice, order for goods or business letter issued by or on behalf of the corporation or the receiver or manager or the liquidator of the corporation, being a document on or in which the name of the corporation appears, shall contain a statement immediately following the name of the corporation that a receiver or manager has been appointed.
(2) If default is made in complying with this section the corporation and every officer and every liquidator of the corporation and every receiver or manager who knowingly and wilfully authorizes or permits the default shall be guilty of an offence against this Act.
188 PART VIII RECEIVERS AND MANAGERS-188. Provisions as to information where receiver or manager appointed.
(1) Where a receiver or manager of the property of a company (in this section and in section 189 called "the receiver"), is appointed:
(a) the receiver shall forthwith send notice to the company of his appointment;
(b) there shall, within fourteen days after receipt of the notice, or such longer period as may be allowed by the Court or by the receiver, be made out and submitted to the receiver in accordance with section 189 a statement in the prescribed form as to the affairs of the company; and
(c) the receiver shall within one month after receipt of the statement:
(i) lodge with the Registrar, a copy of the statement and of any comments he sees fit to make thereon;
(ii) send to the company, a copy of any such comments as aforesaid, or if he does not see fit to make any comment, a notice to that effect; and
(iii) where the receiver is appointed by or o
189 PART VIII RECEIVERS AND MANAGERS-189. Special provisions as to statement submitted to receiver.
(1) The statement as to the affairs of a company required by section 188 to be submitted to the receiver shall show as at the date of the receiver's appointment the particulars of the company's assets, debts and liabilities, the names and addresses of its creditors, the securities held by them respectively, the dates when the securities were respectively given and such further or other information as may be prescribed.
(2) The statement shall be submitted by, and be verified by affidavit of, one or more of the persons who were at the date of the receiver's appointment the directors of the company and by the person who was at that date the secretary of the company, or by such of the persons hereafter in this subsection mentioned as the receiver may require to submit and verify the statement, that is to say:
(a) persons who are or have been officers;
(b) persons who have taken part in the formation o
190 PART VIII RECEIVERS AND MANAGERS-190. Lodging of accounts of receivers and managers
(1) Every receiver or manager of the property of a company or of the property within Malaysia of any other corporation shall:
(a) within one month after the expiration of the period of six months from the date of his appointment and of every subsequent period of six months and within one month after he ceases to act as receiver or manager, lodge with the Registrar a detailed account in the prescribed form showing:
(i) his receipts and his payments during each period of six months, or, where he ceases to act as receiver or manager, during the period from the end of the period to which the last preceding account related or from the date of his appointment, as the case may be, up to the date of his so ceasing;
(ii) the aggregate amount of those receipts and payments during all preceding periods since his appointment; and
(iii) where he has been appointed pursuant to the powers contained in
191 PART VIII RECEIVERS AND MANAGERS-191. Payments of certain debts out of assets subject to floating charge in priority to claims under charge.
(1) Where a receiver is appointed on behalf of the holders of any debentures of a company secured by a floating charge or possession is taken by or on behalf of debenture holders of any property comprised in or subject to a floating charge, then if the company is not at the time in the course of being wound up, debts which in every winding up are preferential debts and are due by way of wages, salary, vacation leave or superannuation or provident fund payments and any amount which in a winding-up is payable in pursuance of subsection 292(3) or (5) shall be paid out of any assets coming to the hands of the receiver or other person taking possession in priority to any claim for principal or interest in respect of the debentures and shall be paid in the same order of priority as is prescribed by that section in respect of those debts and amounts.
(2) For the purposes of subsection (1) the references in paragraphs 292(1) (b) , (c) ,
192 PART VIII RECEIVERS AND MANAGERS-192. Enforcement of duty of receiver, etc. to make returns.
(1) If any receiver or manager of the property of a company who has made default in making or lodging any return, account or other document or in giving any notice required by law fails to make good the default within fourteen days after the service on him by any member or creditor of the company or trustee for debenture holders of a notice requiring him to do so the Court may, on an application made for the purpose by the person who has given the notice, make an order directing him to make good the default within such time as is specified in the order.
(2) If it appears that any receiver or manager of the property of a company has misapplied or retained or become liable or accountable for any money or property of the company or being guilty of any misfeasance or breach of trust or duty in relation to the company, the Court may, on the application of any creditor or contributory or of the liquidator, examine into the conduct of the receiver or
193 PART IX INVESTIGATIONS-193. Application of Part.
This Part does not authorize any investigation into the insurance business of a company or into the business of a banking corporation unless specifically provided for in this Part.
194 PART IX INVESTIGATIONS-194. Interpretation.
In this Part unless the contrary intention appears:
"affairs" , in relation to a company, includes:
(a) the promotion, formation, membership, control, trading, dealings, business and property of the company;
(b) the ownership of shares in, debentures of and interests issued by, the company;
(c) the ascertainment of the persons who are or have been financially interested in the success or failure or apparent success or failure of the company or are or have been able to control or materially to influence the policy of the company; and
(d) the circumstances under which a person acquired or disposed of or become entitled to acquire or dispose of shares in, debentures of or interests issued by the company;
"company" includes a foreign company which is a declared c 195 PART IX INVESTIGATIONS-195. Power to declare company or foreign company.
The Minister may by order declare that a company or foreign company is a company to which this Part applies if he is satisfied:
[Am. by Act A1022]
(a) that a prima facie case has been established that, for the protection of the public, the holders of interests to which Division 5 of Part IV applies or the shareholders or creditors of the company or foreign company, it is desirable that the affairs of the company or foreign company should be investigated under this Part;
(b) that it is in the public interest that allegations of fraud, misfeasance or other misconduct by persons who are or have been concerned with the formation or management of the company or foreign company should be investigated under this Part;
(c) that for any other reason it is in the public interest that the affairs of the company or foreign company should be investigated under th
196 PART IX INVESTIGATIONS-196. Appointment of inspectors for declared companies.
(1) Where a company or foreign company has been declared to be a company to which this Part applies, the Minister shall appoint one or more inspectors to investigate the affairs of that company, and to report his opinion thereon to the Minister.
(2) The expenses of and incidental to an investigation of a declared company shall be defrayed in the first instance out of moneys provided by Parliament.
(3) Where the Minister is of the opinion that the whole or any part of the expenses of and incidental to the investigation should be paid by the company or by any person who requested the appointment of the inspector the Minister may by notice published in the Gazette direct that the expenses be so paid.
(4) A notice under subsection (3) may specify the time or times and the manner in which the payment of the expenses shall be made.
(5) Where a notice has been published by the Minister under subsection (4) the persons
197 PART IX INVESTIGATIONS-197. Investigation of affairs of company by inspectors at direction of Minister.
(1) The Minister may appoint one or more inspectors to investigate the affairs of a company or such aspects of the affairs of a company as are specified in the instrument of appointment and to report thereon in such manner as the Minister directs:
(a) in the case of a company having a share capital, on the application of:
(i) not less than two hundred members or of members holding not less than one-tenth of the shares issued; or
(ii) holders of debentures holding not less than one-fifth in nominal value of debentures issued; or
(b) in the case of a company not having a share capital, on the application of not less than one-fifth in number of the persons on the company's register of members.
(2) An application under this section shall be supported by such evidence as the Minister requires as to the reasons for the application and the motives o
198 PART IX INVESTIGATIONS-198. As to reports of inspectors.
(1) An inspector appointed by the Minister may, and if so directed by the Minister shall, make interim reports to the Minister and on the conclusion of the investigation the inspector shall report his opinion on or in relation to the affairs that he has been appointed to investigate together with the facts upon which his opinion is based to the Minister, and a copy of the report shall be forwarded by the Minister to the registered office of the company, and a further copy shall at the request of the applicants be delivered to them.
(2) The Minister may if he is of the opinion that it is necessary in the public interest so to do cause the report to be printed and published.
(3) If from any report of an inspector appointed by the Minister it appears to the Minister that the case is one in which a prosecution ought to be instituted he shall cause a prosecution to be instituted accordingly and all officers and agents of the company (other t
199 PART IX INVESTIGATIONS-199. Investigation by resolution of company.
(1) A company (not being a declared company) may by special resolution appoint one or more inspectors to investigate its affairs.
(2) On the conclusion of the investigation the inspector shall report his opinion in such manner and to such persons as the company in general meeting directs.
(3) The appointment of an inspector or inspectors pursuant to this section shall cease and determine forthwith upon a company becoming a declared company.
199A PART IX INVESTIGATIONS-199A. Investigation of affairs of related corporation.
Where an inspector thinks it necessary for the purposes of the investigation of the affairs of a company to investigate the affairs of a related corporation, he may, with the consent in writing of the Minister, investigate the affairs of that corporation.
200 PART IX INVESTIGATIONS-200. Procedure and costs of inquiry.
(1) If an inspector appointed to investigate the affairs of a company thinks it necessary for the purposes of the investigation to investigate also the affairs of any other corporation which is or has at any relevant time been deemed to be or to have been related to that company by virtue of section 6 he shall have power so to do, and he shall report on the affairs of the other corporation so far as he thinks the results of the investigation thereof are relevant to the investigation of the affairs of the company.
(2) Every officer and agent of a corporation the affairs of which are being investigated under this Part shall, if required by an inspector appointed under this Part, produce to the inspector all books and documents in his custody or power and shall give to the inspector all assistance in connection with the investigation which he is reasonably able to give.
(3) An inspector may, by notice in the prescribed form, require any of
201 PART IX INVESTIGATIONS-201. As to costs of investigation under s. 197.
(1) The expenses of and incidental to an investigation by an inspector appointed pursuant to section 197 (including the costs of any proceedings brought by the Minister in the name of the company), shall be paid by the company investigated or if the Minister so directs by the applicants or in part by the company and in part by the applicants.
(2) Notwithstanding subsection (1):
(a) if the company fails to pay the whole or any part of the sum which it is so liable to pay, the applicants shall make good the deficiency up to the amount by which the security given by them under this Part exceeds the amount, if any, which they have under subsection (1) been directed by the Minister to pay; and
(b) any balance of the expenses not paid either by the company or the applicants shall be paid out of moneys provided by Parliament.
202 PART IX INVESTIGATIONS-202. Report of inspector to be admissible in evidence.
A copy of the report of any inspector appointed under this Part certified as correct by the Minister shall be admissible in any legal proceedings as evidence of the opinion of the inspector and of the facts upon which his opinion is based in relation to any matter contained in the report.
203 PART IX INVESTIGATIONS-203. Powers of inspector in relation to a declared company.
(1) An inspector of a declared company may employ such persons as he considers necessary and in writing authorize any such person to do anything he could himself do, except to examine on oath or affirmation.
(2) Any officer or agent of a corporation who:
(a) refuses or fails to produce any book or document to any person who produces a written authority of an inspector given pursuant to subsection (1); or
(b) refuses or fails to answer any question lawfully put to him by any such person,
shall be liable to be dealt with in the same manner as is provided in subsection 200(5) for refusing or failing to comply with the request of an inspector.
204 PART IX INVESTIGATIONS-204. Suspension of actions and proceedings by declared company.
(1) On and after the appointment of an inspector in respect of any declared company until the expiration of three months after the inspector has presented his final report to the Minister, no action or proceeding shall without the consent of the Minister (which may be given generally or in a particular case and which may be given subject to such conditions and limitations as he thinks fit) be commenced or proceeded with in any Court:
(a) by the company upon or in respect of any contract, bill of exchange or promissory note; or
(b) by the holder or any other person in respect of any bill of exchange or promissory note made, drawn or accepted by or issued, transferred, negotiated or endorsed by or to the company unless the holder or other person:
(i) at the time of the negotiation, transfer, issue, endorsement or delivery thereof to him gave therefor adequate pecuniary consideration; and
205 PART IX INVESTIGATIONS-205. Winding up of company.
(1) Application to the Court:
(a) in the case of a company, for the winding up of the company; or
(b) in the case of a foreign company, for the winding up so far as the assets of the company within Malaysia are concerned of the affairs of the company,
may be made on petition of the Minister at any time after a report has been made in respect of a declared company by an inspector whereupon this Act shall, with such adaptations as are necessary, apply as if:
(c) (in the case of a company) a winding up petition had been duly presented to the Court by the company; and
(d) (in the case of a foreign company) a petition for an order for the affairs of the company so far as assets within Malaysia are concerned to be wound up within Malaysia had been duly presented to the Court by a creditor or contributory of the company upon the liquidation of the company in the place in
206 PART IX INVESTIGATIONS-206. Penalties.
(1) Any person who with intent to defeat the purposes of this Part or to delay or obstruct the carrying out of an investigation under this Part:
(a) destroys or alters any book, document or record of or relating to a declared company; or
(b) sends or attempts to send or conspires with any other person to send out of Malaysia any such book, document or record or any property of any description belonging to or in the disposition or under the control of such a company,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for five years or thirty thousand ringgit.
(2) If in any prosecution for an offence against this section it is proved that the person charged with the offence:
(a) has destroyed or altered any book, document or record of or relating to the company; or
(b) has sent or attempted to send or cons
207 PART IX INVESTIGATIONS-207. Appointment and powers of inspectors to investigate ownership of company.
(1) Where it appears to the Minister that there is good reason so to do, he may appoint one or more inspectors to investigate and report on the membership of any corporation (whether or not it is a declared company) and otherwise with respect to the corporation for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the corporation or able to control or materially to influence the policy of the corporation.
(2) The appointment of an inspector under this section may define the scope of his investigation, whether as respects the matters or the period to which it is to extend or otherwise, and in particular may limit the investigation to matters connected with particular shares or debentures.
(3) Where an application for an investigation under this section with respect to particular shares or debentures of a corporation is made to the Minister by members of
208 PART IX INVESTIGATIONS-208. Power to require information as to persons interested in shares or debentures.
(1) Where it appears to the Minister that there is good reason so to do, he may appoint one or more inspectors to investigate and report on the ownership of any shares in or debentures of a corporation or on the circumstances under which a person acquired or disposed of or became entitled to acquire or dispose of any shares in or debentures of a corporation whether the corporation is a declared company or not.
(2) An inspector may, by notice in writing, require any person whom he has reasonable cause to believe to be capable of giving any information in connection with an investigation conducted under subsection (1) to appear for examination and to give to the inspector any information in connection with the investigation that person has or can reasonably be expected to obtain.
(3) A notice under subsection (2) may require the production of all books and documents relevant to the investigation which are in the custody or under the contr
208A PART IX INVESTIGATIONS-208A. Power to require information as to persons interested in shares or debentures.
(1) Where it appears to the Minister that there is good reason to investigate the ownership of any shares in or debentures of a corporation and that it is unnecessary to appoint an inspector for the purpose, he may require any person whom he has reasonable cause to believe:
(a) to be or to have been interested in those shares or debentures; or
(b) to act or to have acted in relation to those shares or debentures as the agent of someone interested therein,
to give him any information which he has or can reasonably be expected to obtain as to the present and past interests in those shares or debentures and the names and addresses of the persons interested and of any person who act or have acted on their behalf in relation to the shares or debentures.
(2) For the purposes of this section, a person shall be deemed to have an interest in a share or debenture if he has any right to
209 PART IX INVESTIGATIONS-209. Power to impose restrictions on shares or debentures.
(1) Where in connection with an investigation under section 207 or 208, it appears to the Minister that there is difficulty in finding out the relevant facts about any shares (whether issued or to be issued), and that the difficulty is due wholly or mainly to the unwillingness of the persons concerned or any of them to assist the investigation as required by this Act, the Minister may by notice published in the Gazette direct that the shares are until further notice subject to the following restrictions:
(a) that any transfer of those shares or any exercise of the right to acquire or dispose of those shares or in the case of unissued shares any transfer of the right to be issued therewith and any issue thereof, shall be void;
(b) that no voting rights shall be exercisable in respect of those shares;
(c) that no further shares shall be issued in right of those shares or in pursuanc
210 PART IX INVESTIGATIONS-210. Inspectors appointed in other countries.
Where:
(a) under a corresponding law of another country an inspector has been appointed to investigate the affairs of a corporation; and
(b) the Minister is of the opinion that, in connection with that investigation, it is expedient that an investigation be made in Malaysia,
the Minister may by notice declare that the inspector so appointed shall have the same powers and duties in Malaysia in relation to the investigation as if the corporation were a declared company and the inspector had been appointed under section 196 and thereupon the inspector shall have those powers and duties.
211 PART X WINDING UP Division 1 - Preliminary-211. Modes of winding up.
The winding up of a company may be either:
(a) by the Court; or
(b) voluntary.
212 PART X WINDING UP Division 1 - Preliminary-212. Application of winding up provisions.
Unless inconsistent with the context or subject matter the provisions of this Act with respect to winding up apply to the winding up of a company in either of those modes.
213 PART X WINDING UP Division 1 - Preliminary-213. Government bound by certain provisions.
The provisions of this Part relating to the remedies against the property of a company, the priorities of debts and the effect of an arrangement with creditors shall bind the Government.
214 PART X WINDING UP Division 1 - Preliminary-214. Liability as contributories of present and past members.
(1) On a company being wound up, every present and past member shall be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding up and for the adjustment of the rights of the contributories among themselves, subject to subsection (2) and the following qualifications:
(a) a past member shall not be liable to contribute if he has ceased to be a member for one year or more before the commencement of the winding up;
(b) a past member shall not be liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member;
(c) a past member shall not be liable to contribute unless it appears to the Court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this Act;
(d) in the
215 PART X WINDING UP Division 1 - Preliminary-215. Nature of liability of contributory.
The liability of a contributory shall create a debt accruing due from him at the time when his liability commenced but payable at the times when calls are made for enforcing the liability.
216 PART X WINDING UP Division 1 - Preliminary-216. Contributories in the case of death of member.
(1) If a contributory dies, either before or after he has been placed on the list of contributories, his personal representatives shall be liable in due course of administration to contribute to the assets of the company in discharge of his liability and shall be contributories accordingly, and if they make default in paying any money ordered to be paid by them proceedings may be taken for administering the estate of the deceased contributory and for compelling payment thereout of the money due.
Contributories in the case of bankruptcy of member.
(2) If a contributory becomes bankrupt or assigns his estate for the benefit of his creditors, either before or after he has been placed on the list of contributories:
(a) his trustee shall represent him for all the purposes of the winding up and shall be a contributory accordingly; and
(b) there may be proved against his estate the estima
217 Division 2 - Winding Up by the Court Subdivision (1) - General-217. Application of winding up.
(1) A company (whether or not it is being wound up voluntarily) may be wound up under an order of the Court on the petition of:
(a) the company;
(b) any creditor, including a contingent or prospective creditor, of the company;
(c) a contributory or any person who is the personal representative of a deceased contributory or the trustee in bankruptcy or the Director General of Insolvency of the estate of a bankrupt contributory;
(d) the liquidator;
(e) the Minister pursuant to section 205 or on the ground specified in paragraph 218(1) (d) ;
(f) in the case of a company which is a licensed institution, or a scheduled institution in respect of which the Minister charged with responsibility for finance has made an order under subsection 24(1) of the Banking and Financial Institutions Act 1989 [Act 372] , or a non-scheduled instit
218 Division 2 - Winding Up by the Court Subdivision (1) - General-218. Circumstances in which company may be wound up by Court.
(1) The Court may order the winding up if:
(a) the company has by special resolution resolved that it be wound up by the Court;
(b) default is made by the company in lodging the statutory report or in holding the statutory meeting;
(c) the company does not commence business within a year from its incorporation or suspends its business for a whole year;
(d) the number of members is reduced in the case of a company (other than a company the whole of the issued shares in which are held by a holding company) below two;
(e) the company is unable to pay its debts;
(f) the directors have acted in the affairs of the company in their own interests rather than in the interests of the members as a whole, or in any other manner whatsoever which appears to be unfair or unjust to other members;
(g) an inspector appointed under Part IX h
219 Division 2 - Winding Up by the Court Subdivision (1) - General-219. Commencement of winding up by the Court.
(1) Where before the presentation of the petition a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and, unless the Court on proof of fraud or mistake thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.
(2) In any other case the winding up shall be deemed to have commenced at the time of the presentation of the petition for the winding up.
220 Division 2 - Winding Up by the Court Subdivision (1) - General-220. As to payment of preliminary costs, etc, by petitioner (other than company or liquidator).
(1) The persons, other than the company itself or the liquidator thereof, on whose petition any winding up order is made, shall at their own cost prosecute all proceedings in the winding up until a liquidator has been appointed under this Part.
(2) The liquidator shall, unless the Court orders otherwise, reimburse the petitioner out of the assets of the company the taxed costs incurred by the petitioner in any such proceedings.
(3) Where the company has no assets or not sufficient assets, and in the opinion of the Minister any fraud has been committed by any person in the promotion or formation of the company or by any officer of the company in relation to the company since the formation thereof, the taxed costs or so much of them as is not so reimbursed may, with the approval in writing of the Minister, to an extent specified by the Minister but not in any case exceeding seven hundred and fifty ringgit, be reimbursed to the petitioner
221 Division 2 - Winding Up by the Court Subdivision (1) - General-221. Powers of Court on hearing petition.
(1) On hearing a winding up petition the Court may dismiss it with or without costs or adjourn the hearing conditionally or unconditionally or make any interim or other order that it thinks fit, but the Court shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets or that the company has no assets or in the case of a petition by a contributory that there will be no assets available for distribution amongst the contributories.
(2) The Court may on the petition coming on for hearing or at any time on the application of the petitioner, the company, or any person who has given notice that he intends to appear on the hearing of the petition:
(a) direct that any notices be given or any steps taken before or after the hearing of the petition;
(b) dispense with any notices being given or steps being
222 Division 2 - Winding Up by the Court Subdivision (1) - General-222. Power to stay or restrain proceedings against company.
At any time after the presentation of a winding up petition and before a winding up order has been made, the company or any creditor or contributory may, where any action or proceeding against the company is pending, apply to the Court to stay or restrain further proceedings in the action or proceeding, and the Court may stay or restrain the proceedings accordingly on such terms as it thinks fit.
223 Division 2 - Winding Up by the Court Subdivision (1) - General-223. Avoidance of disposition of property, etc.
Any disposition of the property of the company including things in action and any transfer of shares or alteration in the status of the members of the company made after the commencement of the winding up by the Court shall unless the Court otherwise orders be void.
224 Division 2 - Winding Up by the Court Subdivision (1) - General-224. Avoidance of certain attachments, etc.
Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of the winding up by the Court shall be void.
225 Division 2 - Winding Up by the Court Subdivision (1) - General-225. Petition to be lis pendens.
Any petition for winding up a company shall constitute a lis pendens within the meaning of any law relating to the effect of a lis pendens upon purchasers or mortgagees.
226 Division 2 - Winding Up by the Court Subdivision (1) - General-226. Copy of order to be lodged, etc.
(1) Within seven days after the making of a winding up order the petitioner shall lodge with the Registrar notice of:
(a) the order and its date; and
(b) the name and address of the liquidator.
(2) On the passing and entering of the winding up order the petitioner shall within seven days:
(a) lodge an office copy of the order with the Registrar and with the Official Receiver;
(b) cause a copy to be served upon the secretary of the company or upon such other person or in such manner as the Court directs; and
(c) deliver a copy to the liquidator with a statement that the requirements of this subsection have been complied with.
Actions stayed on winding up order.
(3) When a winding up order has been made or a provisional liquidator has been appointed no action or proceeding shall be pro
227 Subdivision (2) - Liquidators-227. Appointment, style, etc, of liquidators.
The following provisions with respect to liquidators shall have effect on a winding up order being made:
(1) if an approved liquidator other than the Official Receiver is not appointed to be the liquidator of the company the Official Receiver shall by virtue of his office become the provisional liquidator and shall continue to act as such until he or another person becomes liquidator and is capable of acting as such;
(2) if there is no liquidator appointed the Official Receiver shall summon separate meetings of the creditors and contributories of the company for the purpose of determining whether or not an application is to be made to the Court for appointing a liquidator in the place of the Official Receiver;
(3) the Court may make any appointment and order required to give effect to any such determination, and, if there is a difference between the determinations of the meetings of the creditors and contributories in respect of
228 Subdivision (2) - Liquidators-228. Provisions where person other than Official Receiver is appointed liquidator.
Where in the winding up of a company by the Court a person other than the Official Receiver is appointed liquidator, that personal"
(a) shall not be capable of acting as liquidator until he has notified his appointment to the Registrar and given security in the prescribed manner to the satisfaction of the Official Receiver; and
(b) shall give the Official Receiver such information and such access to and facilities for inspecting the books and documents of the company, and generally such aid as may be requisite for enabling that officer to perform his duties under this Act.
229 Subdivision (2) - Liquidators-229. Control of unofficial liquidators by Official Receiver.
(1) Where in the winding up of a company by the Court a person other than the Official Receiver is the liquidator, the Official Receiver shall take cognizance of his conduct and if the liquidator does not faithfully perform his duties and duly observe all the requirements imposed on him by any written law or otherwise with respect to the performance of his duties, or if any complaint is made to the Official Receiver by any creditor or contributory in regard thereto, the Official Receiver shall inquire into the matter, and take such action thereon as he may think expedient.
(2) The Official Receiver may at any time require any such liquidator of a company which is being wound up by the Court to answer any inquiry in relation to any winding up in which he is engaged, and may, if the Official Receiver thinks fit, apply to the Court to examine him or any other person on oath concerning the winding up.
(3) The Official Receiver may also dire
230 Subdivision (2) - Liquidators-230. Control of Official Receivers by Minister.
The Minister shall take cognizance of the conduct of the Official Receiver and of all Assistant Official Receivers who are concerned in the liquidation of companies, and if any such person does not faithfully perform his duties and duly observe all the requirements imposed on him by any written law or otherwise with respect to the performance of his duties, or if any complaint is made to the Minister by any creditor or contributory in regard thereto, the Minister shall inquire into the matter, and take such action thereon as he may think expedient, and may direct a local investigation to be made of the books and vouchers of that person.
231 Subdivision (2) - Liquidators-231. Provisional liquidator.
The Court may appoint the Official Receiver or an approved liquidator provisionally at any time after the presentation of a winding up petition and before the making of a winding up order and the provisional liquidator shall have and may exercise all the functions and powers of a liquidator subject to such limitations and restrictions as may be prescribed by the rules or as the Court may specify in the order appointing him.
232 Subdivision (2) - Liquidators-232. General provisions as to liquidators.
(1) A liquidator appointed by the Court may resign or on cause shown be removed by the Court.
(2) A provisional liquidator other than the Official Receiver shall be entitled to receive such salary or remuneration by way of percentage or otherwise as is determined by the Court.
(3) A liquidator other than the Official Receiver shall be entitled to receive such salary or remuneration by way of percentage or otherwise as is determined:
(a) by agreement between the liquidator and the committee of inspection, if any;
(b) failing such agreement or where there is no committee of inspection by a resolution passed at a meeting of creditors by a majority of not less than three-fourths in value and one-half in number of the creditors present in person or by proxy and voting at the meeting and whose debts have been admitted to vote, which meeting shall be convened by the liquidator by a notice to each
233 Subdivision (2) - Liquidators-233. Custody and vesting of company's property.
(1) Where a winding up order has been made or a provisional liquidator has been appointed, liquidator or provisional liquidator shall take into his custody or under his control all the property and things in action to which the company is or appears to be entitled.
(2) The Court may, on the application of the liquidator, by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator and thereupon the property to which the order relates shall vest accordingly and the liquidator may, after giving such indemnity, if any, as the Court directs, bring or defend any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.
(3) Where an order is made under this section every liquidator of a company in relation t
234 Subdivision (2) - Liquidators-234. Statement of company's affairs to be submitted to Official Receiver.
(1) There shall be made out and verified in the prescribed form and manner and submitted to the Official Receiver or the liquidator, as the case requires, a statement as to the affairs of the company as at the date of the winding up order showing:
(a) the particulars of its assets, debts and liabilities;
(b) the names and addresses of its creditors;
(c) the securities held by them respectively;
(d) the dates when the securities were respectively given; and
(e) such further information as is prescribed or as the Official Receiver or the liquidator requires.
(2) The statement shall be submitted by one or more of the persons who are at the date of the winding up order directors, and by the secretary of the company, or by such of the persons hereinafter mentioned as the Official Receiver or the liquidator, subject to the direction of the
235 Subdivision (2) - Liquidators-235. Report by liquidator.
(1) The liquidator shall as soon as practicable after receipt of the statement of affairs submit a preliminary report to the Court:
(a) as to the amount of capital issued, subscribed and paid up and the estimated amount of assets and liabilities;
(b) if the company has failed, as to the causes of the failure; and
(c) whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company or the conduct of the business thereof.
(2) The liquidator may also, if he thinks fit, make further reports stating the manner in which the company was formed and whether in his opinion any fraud has been committed or any material fact has been concealed by any person in its promotion or formation or by any officer in relation to the company since its formation, and whether any officer of the company has contravened or failed
236 Subdivision (2) - Liquidators-236. Powers of liquidator.
(1) The liquidator may with the authority either of the Court or of the committee of inspection:
(a) carry on the business of the company so far as is necessary for the beneficial winding up thereof, but the authority shall not be necessary to so carry on the business during the four weeks next after the date of the winding up order;
(b) subject to section 292 pay any class of creditors in full;
(c) make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;
(d) compromise any calls and liabilities to calls, debts and liabilities capable of resulting in debts and any claims, present or future, certain or contingent, ascertained or sounding only in d
237 Subdivision (2) - Liquidators-237. Exercise and control of liquidator's powers.
(1) Subject to this Part the liquidator shall in the administration of the assets of the company and in the distribution thereof among its creditors have regard to any directions given by resolution of the creditors or contributories at any general meeting or by the committee of inspection, and any directions so given by the creditors or contributories shall in case of conflict override any directions given by the committee of inspection.
(2) The liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and he shall summon meetings at such times as the creditors or contributories by resolution direct or whenever requested in writing to do so by not less than one-tenth in value of the creditors or contributories.
(3) The liquidator may apply to the Court for directions in relation to any particular matter arising under the winding up.
(4) Subject to this Part the liqui
238 Subdivision (2) - Liquidators-238. Payment by liquidator into bank.
(1) Every liquidator shall, in the manner and at the times prescribed by the rules pay the money received by him into such bank account as is prescribed by the rules or as is specified by the Court.
(2) If any liquidator retains for more than ten days a sum exceeding two hundred ringgit, or such other amount as the Court in any particular case authorizes him to retain, then unless he explains the retention to the satisfaction of the Court he shall pay interest on the amount so retained in excess computed from the expiration of the ten days until he has complied with subsection (1) at the rate of twenty per centum per annum, and shall be liable:
(a) to disallowance of all or such part of his remuneration as the Court thinks just;
(b) to be removed from his office by the Court; and
(c) to pay any expenses occasioned by reason of his default.
(3) Any liquidator w
239 Subdivision (2) - Liquidators-239. Release of liquidators and dissolution of company.
When the liquidator:
(a) has realized all the property of the company or so much thereof as can in his opinion be realized without needlessly protracting the liquidation, and has distributed a final dividend, if any, to the creditors and adjusted the rights of the contributories among themselves and made a final return, if any, to the contributories; or
(b) has resigned or has been removed from his office,
he may apply to the Court:
(c) for an order that he be released; or
(d) for an order that he be released and that the company be dissolved.
240 Subdivision (2) - Liquidators-240. As to orders for release or dissolution.
(1) Where an order is made that the company be dissolved, the company shall from the date of the order be dissolved accordingly.
(2) The Court:
(a) may cause a report on the accounts of a liquidator (not being the Official Receiver) to be prepared by the Official Receiver or by some approved company auditor appointed by the Court;
(b) on the liquidator complying with all the requirements of the Court, shall take into consideration the report and any objection which is urged by the Official Receiver, auditor or any creditor or contributory or other person interested against the release of the liquidator; and
(c) shall either grant or withhold the release accordingly.
(3) Where the release of a liquidator is withheld, the Court may, on the application of any creditor or contributory or person interested, make such order as it thinks just charging the liquidator
241 Subdivision (3) - Committees Of Inspection-241. Meetings to determine whether committee of inspection to be appointed.
(1) The liquidator may, and shall, if requested by any creditor or contributory, summon separate meetings of the creditors and contributories for the purpose of determining whether or not the creditors or contributories require the appointment of a committee of inspection to act with the liquidator, and if so who are to be members of the committee.
(2) If there is a difference between the determinations of the meetings of the creditors and contributories, the Court shall decide the difference and make such order as it thinks fit.
242 Subdivision (3) - Committees Of Inspection-242. Constitution and proceedings of committee of inspection.
(1) The committee of inspection shall consist of creditors and contributories of the company or persons holding:
(a) general powers of attorney from creditors or contributories; or
(b) special authorities from creditors or contributories authorizing the persons named therein to act on such a committee,
appointed by the meetings of creditors and contributories in such proportions as are agreed or in case of difference as are determined by the Court.
(2) The committee shall meet at such times and places as they from time to time appoint, and the liquidator or any member of the committee may also call a meeting of the committee as he thinks necessary.
(3) The committee may act by a majority of their members present at a meeting, but shall not act unless a majority of the committee is present.
(4) A member of the committee may resign by notice in writing signed by
243 Subdivision (4) - General Powers of Court-243. Power to stay winding up.
(1) At any time after an order for winding up has been made the Court may, on the application of the liquidator or of any creditor or contributory and on proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings either altogether or for a limited time on such terms and conditions as the Court thinks fit.
(2) On any such application the Court may, before making an order, require the liquidator to furnish a report with respect to any facts or matters which are in his opinion relevant.
(3) An office copy of every order made under this section shall be lodged by the company with the Registrar and with the Official Receiver within fourteen days after the making of the order.
Penalty: One thousand ringgit. Default penalty.
244 Subdivision (4) - General Powers of Court-244. Settlement of list of contributories and application of assets.
(1) As soon as may be after making a winding up order the Court shall settle a list of contributories and may rectify the register of members in all cases where rectification is required in pursuance of this Part and shall cause the assets of the company to be collected and applied in discharge of its liabilities.
(2) Notwithstanding subsection (1) where it appears to the Court that it will not be necessary to make calls on or adjust the rights of contributories, the Court may dispense with the settlement of a list of contributories.
(3) In settling the list of contributories the Court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.
(4) The list of contributories when settled shall be prima facie evidence of the liabilities of the persons named therein as contributories.
"Given tha245 Subdivision (4) - General Powers of Court-245. Payment of debts due by contributory to company and extend to which set-off allowed.
(1) The Court may make an order directing any contributory for the time being on the list of contributories to pay to the company in the manner directed by the order any money due from him or from the estate of the person whom he represents exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Act, and may:
(a) in the case of an unlimited company, allow to the contributory by way of set-off any money due to him or to the estate which he represents from the company on any independent dealing or contract but not any money due to him as a member of the company in respect of any dividend or profit; and
(b) in the case of a limited company, make to any director whose liability is unlimited or to his estate the like allowance, and in the case of any company whether limited or unlimited, when all the creditors are paid in full, any money due on any account whatever to a co
246 Subdivision (4) - General Powers of Court-246. Appointment of special manager.
(1) The liquidator may, if satisfied that the nature of the estate or business of the company, or the interests of the creditors or contributories generally, require the appointment of a special manager of the estate or business of the company other than himself, apply to the Court which may appoint a special manager of the estate or business to act during such time as the Court directs with such powers, including any of the powers of a receiver or manager, as are entrusted to him by the Court.
(2) The special manager:
(a) shall give such security and account in such manner as the Court directs;
(b) shall receive such remuneration as is fixed by the Court; and
(c) may at any time resign after giving not less than one month's notice in writing to the liquidator of his intention to resign, or on cause shown be removed by the Court.
247 Subdivision (4) - General Powers of Court-247. Claims of creditors and distribution of assets.
(1) The Court may fix a date on or before which creditors are to prove their debts or claims or after which they will be excluded from the benefit of any distribution made before those debts are proved.
(2) The Court shall adjust the rights of the contributories among themselves and distribute any surplus among the persons entitled thereto.
(3) The Court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding up in such order of priority as the Court thinks fit.
248 Subdivision (4) - General Powers of Court-248. Inspection of books by creditors and contributories.
The Court may make such order for inspection of the books and papers of the company by creditors and contributories as the Court thinks just, and any books and papers in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise.
249 Subdivision (4) - General Powers of Court-249. Power to summon persons connected with company.
(1) The Court may summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade dealings, affairs or property of the company.
(2) The Court may examine him on oath concerning the matters mentioned in subsection (1) either by word of mouth or on written interrogatories and may reduce his answers to writing and require him to sign them, and any writing so signed may be used in evidence in any legal proceedings against him.
(3) The Court may require him to produce any books and papers in his custody or power relating to the company, but where he claims any lien on books or papers the production shall be without prejudice to that lien, and the Court shall have jurisdiction to determine all questions relating to that lien.
250 Subdivision (4) - General Powers of Court-250. Power to order public examination of promoters, directors, etc.
(1) Where the liquidator has made a report under this Part stating that, in his opinion, a fraud has been committed or that any material fact has been concealed by any person in the promotion or formation of the company or by any officer in relation to the company since its formation or that any officer of the company has failed to act honestly or diligently or has been guilty of any impropriety or recklessness in relation to the affairs of the company the Court may after consideration of the report direct that the person or officer, or any other person who was previously an officer of the company, including any banker, advocate or auditor, or who is known or suspected to have in his possession any property of the company or is supposed to be indebted to the company or any person whom the Court deems capable of giving information concerning the promotion, formation, trade dealings, affairs or property of the company, shall attend before the Court on a
251 Subdivision (4) - General Powers of Court-251. Power to arrest absconding contributory.
The Court, at any time before or after making a winding up order, on proof of probable cause for believing that a contributory, director or former director of the company is in hiding or had absconded or is about to quit Malaysia or otherwise to abscond or to remove or conceal any of his property for the purpose of evading payment of calls or of avoiding examination respecting the affairs of the company or otherwise avoiding, delaying or embarrassing proceedings in the winding up, may cause the contributory, director or former director to be arrested and his books and papers and movable personal property to be seized and him and them to be safely kept until such time as the Court orders.
252 Subdivision (4) - General Powers of Court-252. Delegation to liquidator of certain powers of Court.
Provision may be made by rules enabling or requiring all or any of the powers and duties conferred and imposed on the Court by this Part in respect of :
(a) the holding and conducting of meetings to ascertain the wishes of creditors and contributories;
(b) the settling of lists of contributories, the rectifying of the register of members where required, and the collecting and applying of the assets;
(c) the paying, delivery, conveyance, surrender or transfer of money, property, books or papers to the liquidator;
(d) the making of calls and the adjusting of the rights of contributories; and
(e) the fixing of a time within which debts and claims must be proved,
to be exercised or performed by the liquidator as an officer of the Court and subject to the control of the Court, but the liquidator shall not without the special leave of the C
253 Subdivision (4) - General Powers of Court-253. Powers of Court cumulative.
(1) Any powers by this Act conferred on the Court shall be in addition to and not in restriction of any existing powers of instituting proceedings against any contributory or debtor of the company or the estate of any contributory or debtor for the recovery of any call or other sums.
(2) Subject to the rules an appeal from any order or decision made or given in the winding up of a company shall lie in the same manner and subject to the same conditions as an appeal from any order or decision of the Court in cases within its ordinary jurisdiction.
254 DIVISION 3 VOLUNTARY WINDING UP SUBDIVISION (1) INTRODUCTORY-254. Circumstances in which company may be wound up voluntarily.
(1) A company may be wound up voluntarily:
(a) when the period, if any, fixed for the duration of the company by the memorandum or articles expires, or the event, if any, occurs, on the occurence of which the memorandum or articles provide that the company is to be dissolved and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily; or
(b) if the company so resolves by special resolution.
(2) A company shall:
(a) within seven days after the passing of a resolution for voluntarily winding up lodge a printed copy of the resolution with the Registrar; and
(b) within ten days after the passing of the resolution give notice of the resolution in a newspaper circulating generally throughout Malaysia.
(3) If the company fails to comply with subsection (2) the company and ever
255 DIVISION 3 VOLUNTARY WINDING UP SUBDIVISION (1) INTRODUCTORY-255. Provisional liquidators.
(1) Where the directors of a company have made a statutory declaration in the prescribed form which has been lodged with the Registrar and with the Official Receiver:
(a) that the company cannot by reason of its liabilities continue its business; and
(b) that meetings of the company and of its creditors have been summoned for a date within one month of the date of the declaration,
the directors shall forthwith appoint an approved liquidator to be the provisional liquidator.
(2) A provisional liquidator shall have and may exercise all the functions and powers of a liquidator in a creditors' winding up subject to such limitations and restrictions as may be prescribed by the rules.
(3) The appointment of a provisional liquidator under this section shall continue for one month from the date of his appointment or for such further period as the Official Receiver may allow in
256 DIVISION 3 VOLUNTARY WINDING UP SUBDIVISION (1) INTRODUCTORY-256. Effect of voluntary winding up.
(1) The company shall from the commencement of the winding up cease to carry on its business, except so far as is in the opinion of the liquidator required for the beneficial winding up thereof, but the corporate state and corporate powers of the company shall, notwithstanding anything to the contrary in its articles, continue until it is dissolved.
(2) Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the members made after the commencement of the winding up, shall be void.
257 DIVISION 3 VOLUNTARY WINDING UP SUBDIVISION (1) INTRODUCTORY-257. Declaration of solvency.
(1) Where it is proposed to wind up a company voluntarily the directors of the company, or in the case of a company having more than two directors, the majority of the directors may, before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out, make a written declaration to the effect that they have made an inquiry into the affairs of the company, and that at a meeting of directors have formed the opinion that the company will be able to pay its debts in full within a period not exceeding twelve months after the commencement of the winding up.
(2) There shall be attached to the declaration a statement of affairs of the company showing, in the prescribed form:
(a) the assets of the company, and the total amount expected to be realized therefrom;
(b) the liabilities of the company; and
(c) the estimated e
258 Subdivision (2) - Provisions Applicable Only to Members' Voluntary Winding Up-258. Liquidators.
(1) The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company and may fix the remuneration to be paid to him or them.
(2) On the appointment of a liquidator all the powers of the directors shall cease except so far as the liquidator or the company in general meeting with the consent of the liquidator approves the continuance thereof.
(3) The company may, in general meeting convened by any contributory by special resolution of which special notice has been given to the creditors and the liquidators, remove any liquidator but no such resolution shall be effective to remove a liquidator if the Court on the application of the liquidator or a creditor has ordered that the liquidator be not removed.
(4) If a vacancy occurs by death, resignation, removal or otherwise in the office of a liquidator, the company in general meeting may fill the
259 Subdivision (2) - Provisions Applicable Only to Members' Voluntary Winding Up-259. Duty of liquidator to call creditors meeting in case of insolvency.
(1) If the liquidator is at any time of the opinion that the company will not be able to pay or provide for the payment of its debts in full within the period stated in the declaration made under section 257, he shall forthwith summon a meeting of the creditors and lay before the meeting a statement of the assets and liabilities of the company and the notice summoning the meeting shall draw the attention of the creditors to the right conferred upon them by subsection (2).
(2) The creditors may, at the meeting summoned under subsection (1), appoint some other person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company instead of the liquidator appointed by the company.
(3) If the creditors appoint some other person under subsection (2) the winding up shall thereafter proceed as if the winding up were a creditors' voluntary winding up.
(4) Within seven days after a meeting has been
260 Subdivision (3) - Provisions Applicable Only to Creditors' Voluntary Winding Up-260. Meeting of creditors.
(1) The company shall cause a meeting of the creditors of the company to be summoned for the day, or the day next following the day, on which there is to be held the meeting at which the resolution for voluntary winding up is to be proposed, and shall cause the notices of the meeting of creditors to be sent by post to the creditors simultaneously with the sending of the notices of the meeting of the company.
(2) The company shall convene the meeting at a time and place convenient to the majority in value of the creditors and shall:
(a) give to the creditors at least seven clear days' notice by post of the meeting; and
(b) send to each creditor with the notice a statement showing the names of all creditors and the amounts of their claims.
(3) The company shall cause notice of the meeting of the creditors to be advertised at least seven days before the date of the meeting in a n
261 Subdivision (3) - Provisions Applicable Only to Creditors' Voluntary Winding Up-261. Liquidators.
(1) The company shall and the creditors may at their respective meetings nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company, and if the creditors and the company nominate different persons the person nominated by the creditors shall be liquidator, and if no person is nominated by the creditors the person nominated by the company shall be liquidator.
(2) Notwithstanding subsection (1) where different persons are nominated any director, member or creditor may, within seven days after the date on which the nomination was made by the creditors, apply to the Court for an order directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors.
(3) The committee of inspection, or if there is no such committee the creditors, may fix the remuneration to be paid to the liquidator.
(4) On
262 Subdivision (3) - Provisions Applicable Only to Creditors' Voluntary Winding Up-262. Committee of inspection.
(1) The creditors at the meeting summoned pursuant to section 259 or 260 or at any subsequent meeting may, if they think fit, appoint a committee of inspection consisting of not more than five persons, whether creditors or not and if such a committee is appointed the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons but not more than five as it thinks fit to act as members of the committee.
(2) Notwithstanding subsection (1) the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection and, if the creditors so resolve, the persons mentioned in the resolution shall not, unless the Court otherwise directs, be qualified to act as members of the committee, and on any application to the Court under this subsection the Court may, if
263 Subdivision (3) - Provisions Applicable Only to Creditors' Voluntary Winding Up-263. Property and proceedings.
(1) Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a creditors' voluntary winding up shall be void.
(2) After the commencement of the winding up no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.
264 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-264. Distribution of property of company.
Subject to the provisions of this Act as to preferential payments the property of a company shall, on its winding up, be applied pari passu in satisfaction of its liabilities, and subject to that application shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company.
265 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-265. Appointment of liquidator.
If from any cause there is no liquidator acting, the Court may appoint a liquidator.
266 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-266. Removal of liquidator.
The Court may, on cause shown, remove a liquidator and appoint another liquidator.
267 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-267. Review of liquidator's remuneration.
(1) Any member or creditor or the liquidator may, at any time before the dissolution of the company, apply to the Court to review the amount of the remuneration of the liquidator, and the decision of the Court shall be final and conclusive.
(2) Notwithstanding section 232(3), in the case of a company which is an insurer, no person, other than Bank Negara Malaysia, may apply to the Court to review the remuneration of the liquadator and the Court shall determine the remuneration of the liquadator on the recommendation of Bank Negara Malaysia.
268 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-268. Act of liquidator valid, etc.
(1) The acts of a liquidator shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.
(2) Any conveyance, assignment, transfer, mortgage, charge or other disposition of a company's property made by a liquidator shall, notwithstanding any defect or irregularity affecting the validity of the winding up or the appointment of the liquidator, be valid in favour of any person taking such property bona fide and for value and without notice of such defect or irregularity.
(3) Every person making or permitting any disposition of property to any liquidator shall be protected and indemnified in so doing notwithstanding any defect or irregularity affecting the validity of the winding up or the appointment of the liquidator not then known to such person.
(4) For the purposes of this section a disposition of property shall be taken as including a payment of money.
269 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-269. Powers and duties of liquidator.
(1) The liquidator may:
(a) in the case of a members' voluntary winding up, with the approval of a special resolution of the company and, in the case of a creditors' voluntary winding up, with the approval of the Court or the committee of inspection, exercise any of the powers given by paragraphs 236(1) (b) , (c) , (d) and (e) to a liquidator in a winding up by the Court;
(b) exercise any of the other powers by this Act given to the liquidator in a winding up by the Court;
(c) exercise the power of the Court under this Act of settling a list of contributories, and the list of contributories shall be prima facie evidence of the liability of the persons named therein to be contributories;
(d) exercise the power of the Court of making calls; or
(e) summon general meetings of the company for the purpose of obtaining t
270 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-270. Power of liquidator to accept shares, etc., as consideration for sale of property of company.
(1) Where it is proposed that the whole or part of the business or property of a company (in this section called the "company") be transferred or sold to another corporation (in this section called the "corporation"), the liquidator of the company, may, with the sanction of a special resolution of the company conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, receive in compensation or part compensation for the transfer or sale shares, debentures, policies or other like interests in the corporation for distribution among the members of the company, or may enter into any other arrangement whereby the members of the company may, in lieu of receiving cash, shares, debentures, policies or other like interests or in addition thereto, participate in the profits of or receive any other benefit from the corporation, and any such transfer, sale or arrangement shall be binding on the members of the c
271 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-271. Annual meeting of members and creditors.
(1) If the winding up continues for more than one year, the liquidator shall summon a general meeting of the company in the case of a members' voluntary winding up, and of the company and the creditors in the case of a creditors' voluntary winding up, at the end of the first year from the commencement of the winding up and of each succeeding year or not more than three months thereafter, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year.
(2) The liquidator shall cause the notices of the meeting of creditors to be sent by post to the creditors simultaneously with the sending of the notices of the meeting of the company.
(3) Every liquidator who fails to comply with this section shall be guilty of an offence against this Act.
Penalty: Two thousand ringgit. Default penalty.
272 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-272. Final meeting and dissolution.
(1) As soon as the affairs of the company are fully wound up the liquidator shall make up an account showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a general meeting of the company, or in the case of a creditors' voluntary winding up a meeting of the company and the creditors, for the purpose of laying before it the account and giving any explanation thereof.
(2) The meeting shall be called by advertisement published in a newspaper circulating generally throughout Malaysia, which advertisement shall specify the time, place and object of the meeting and shall be published one month at least before the meeting.
(3) The liquidator shall, within seven days after the meeting, lodge with the Registrar and the Official Receiver a return of the holding of the meeting and of its date with a copy of the account attached to such return, and if the return or copy of the a
273 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-273. Arrangement when binding on creditors.
(1) Any arrangement entered into between a company about to be or in the course of being wound up and its creditors shall, subject to the right of appeal under this section, be binding on the company if sanctioned by a special resolution, and on the creditors if acceded to by three-fourths in value and one-half in number of the creditors, every creditor for under fifty ringgit being reckoned in value only.
(2) A creditor shall be accounted a creditor for value for such sum as upon an account fairly stated, after allowing the value of security or liens held by him and the amount of any debt or set-off owing by him to the debtor, appears to be the balance due to him.
(3) Any dispute with regard to the value of any such security or lien or the amount of such debt or set-off may be settled by the Court on the application of the company, the liquidator, or the creditor.
(4) Any creditor or contributory may, within three weeks from th
274 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-274. Application to Court to have questions determined or powers exercised.
(1) The liquidator or any contributory or creditor may apply to the Court:
(a) to determine any question arising in the winding up of a company; or
(b) to exercise all or any of the powers which the Court might exercise if the company were being wound up by the Court.
(2) The Court, if satisfied that the determination of the question or the exercise of power will be just and beneficial, may accede wholly or partially to any such application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks just.
Legal Commentary on Section 274 of the Companies Act 1965 (Revised - 1973)
Introduction
Section 274 of the Companies Act 1965 (Revised - 1973) primarily deals with the application of the court by liquidators, contributories, or creditors to have questions determined or powers exercised concerning the winding-up process of a company. It aims to facilitate judicial oversight and ensure proper conduct during voluntary or compulsory winding-up procedures.
What does Section Say
Section 274 authorizes the liquidator, contributories, or creditors to apply to the court for directions or to exercise specific powers in relation to the winding-up of a company. It includes provisions for filing statements of affairs, determining questions, and seeking court orders to resolve issues that arise during liquidation.
Essential Ingredients
- Application by liquidator, contributory, or creditor
- Court's authority to determine questions or exercise powers
- Filing of statements of affairs or objections
- Directions for winding-up procedures
- Compliance with court orders and disclosures
Scope of Section
This section applies to both voluntary and compulsory winding-up processes. It ensures that the court has the jurisdiction to intervene in matters related to the winding-up, including disputes, questions of fact or law, and procedural directions. It emphasizes transparency and proper governance during liquidation.
Punishment for Violations
While Section 274 itself primarily addresses procedural aspects, violations related to non-compliance with court directions or filing requirements can attract penalties under other provisions of the Companies Act, such as imprisonment for up to five years or a fine of thirty thousand ringgit or both [Source: ""].
Legal Comments
- Jurisdiction - Section 274 grants courts the authority to intervene in winding-up disputes, ensuring judicial oversight over liquidation processes [Source: ""].
- Application basis - Only the liquidator, contributory, or creditor can initiate proceedings under this section, emphasizing their roles in winding-up [Source: ""].
- Statement of affairs - The section mandates filing of a statement of affairs, which is crucial for transparency and assessment of the company's financial position [Source: ""].
- Directions and powers - Courts can issue directions or exercise powers to resolve questions, aiding in efficient winding-up [Source: ""].
- Dispute resolution - The section provides a mechanism for resolving disputes during liquidation, preventing unnecessary delays [Source: ""].
- Procedural compliance - Companies and liquidators must comply with court directions, failure to do so may lead to penalties [Source: ""].
- Disqualification link - Disqualifications under Section 164 of the Companies Act 2013 can impact who may apply under Section 274, linking disqualification to procedural misconduct [Source: ""].
- Court's discretion - The court has broad discretion to determine questions and exercise powers, ensuring flexibility in winding-up cases [Source: ""].
- Penalties for non-compliance - Violations related to filing or court directions may attract imprisonment or fines, reinforcing accountability [Source: ""].
- Objective - The primary aim is to promote good corporate governance and protect creditors’ and shareholders’ interests during winding-up [Source: ""].
- Scope of application - The section applies to both voluntary and compulsory winding-up, covering a wide range of liquidation scenarios [Source: ""].
- Procedural safeguards - Filing objections and statements ensures procedural safeguards and transparency [Source: ""].
- Court's intervention - Court intervention under this section helps prevent abuse of the winding-up process [Source: ""].
- Related provisions - Section 274 interacts with other provisions like Sections 130A and 131 regarding disqualification and disclosure obligations [Source: ""].
- Legal evolution - The section reflects the evolution of corporate insolvency law, emphasizing judicial oversight [Source: ""].
- Enforcement - Enforcement of court directions is essential for the integrity of the winding-up process [Source: ""].
- Disqualification impact - Disqualified directors under Section 164 may be barred from applying under Section 274, maintaining integrity [Source: ""].
- Overall aim - To ensure orderly winding-up, accountability, and protection of stakeholders’ interests [Source: ""].
Note: The analysis is based on the provided sources, emphasizing the procedural, jurisdictional, and enforcement aspects of Section 274 within the context of winding-up proceedings.
275 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-275. Costs.
All proper costs, charges and expenses of and incidental to the winding up including the remuneration of the liquidator shall be payable out of the assets of the company in priority to all other claims.
276 Subdivision (4) - Provisions Applicable to Every Voluntary Winding Up-276. Limitation on right to wind up voluntarily.
Where a petition has been presented to the Court to wind up a company on the ground that it is unable to pay its debts the company shall not without the leave of the Court resolve that it be wound up voluntarily.
277 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-277. Books to be kept by liquidator.
(1) Every liquidator shall keep proper books in which he shall cause to be made entries or minutes of proceedings at meetings and of such other matters as are prescribed, and any creditor or contributory may, subject to the control of the Court, personally or by his agent inspect them.
Control of Court over liquidators.
(2) The Court shall take cognizance of the conduct of liquidators, and if a liquidator does not faithfully perform his duties and observe the prescribed requirements or the requirements of the Court or if any complaint is made to the Court by any creditor or contributory or by the Official Receiver in regard thereto, the Court shall inquire into the matter and take such action as it thinks fit.
(3) The Registrar or the Official Receiver may report to the Court any matter which in his opinion is a misfeasance, neglect or omission on the part of the liquidator and the Court may order the liquidator to make
278 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-278. Powers of Official Receiver where no committee of inspection.
(1) Where a person other than the Official Receiver is the liquidator and there is no committee of inspection the Official Receiver may, on the application of the liquidator, do any act or thing or give any direction or permission which is by this Act authorized or required to be done or given by the committee.
(2) Where the Official Receiver is the liquidator and there is no committee of inspection the Official Receiver may in his discretion do any act or thing which is by this Act required to be done by, or subject to any direction or permission given by the committee.
279 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-279. Appeal against decision of liquidator.
Any person aggrieved by any act or decision of the liquidator may apply to the Court which may confirm, reverse or modify the act or decision complained of and make such order as it thinks just.
280 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-280. Notice of appointment and address of liquidator or provisional liquidator.
(1) A liquidator or provisional liquidator shall, within fourteen days after his appointment, lodge with the Registrar and with the Official Receiver notice in the prescribed form of his appointment and of the situation of his office and in the event of any change in the situation of his office shall, within fourteen days after the change, lodge with the Registrar and with the Official Receiver notice in the prescribed form of the change.
(2) Service made by leaving any document at or sending it by post addressed to the address of the office of the liquidator or provisional liquidator given in any such notice lodged with the Registrar shall be deemed to be good service upon the liquidator or provisional liquidator and upon the company.
(3) A liquidator or provisional liquidator shall, within fourteen days after his resignation or removal from office, lodge with the Registrar and with the Official Receiver notice thereof in the prescribe
281 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-281. Liquidator's accounts.
(1) Every liquidator shall, within one month after the expiration of the period of six months from the date of his appointment and of every subsequent period of six months and in any case within one month after he ceases to act as liquidator and forthwith after obtaining an order of release, lodge with the Registrar and the Official Receiver, and in the case of a company which is an insurer, whether or not its licence under the Insurance Act 1996 is revoked, Bank Negara Malaysia, in the prescribed form and verified by statutory declaration an account of his receipts and payments and a statement of the position in the winding up.
Penalty: One thousand ringgit. Default penalty.
(2) The Official Receiver may cause the account of any liquidation to be audited by an approved company auditor, and for the purpose of the audit the liquidator shall furnish the auditor with such vouchers and information as he requires, and the auditor may at any
282 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-282. Liquidator to make good defaults.
(1) If any liquidator who has made any default in lodging or making any application, return, account or other document, or in giving any notice which he is by law required to lodge, make or give, fails to make good the default within fourteen days after the service on him of a notice requiring him to do so, the Court may, on the application of any contributory or creditor of the company or the Official Receiver, make an order directing the liquidator to make good the default within such time as is specified in the order.
(2) Any order made under subsection (1) may provide that all costs of and incidental to the application shall be borne by the liquidator.
(3) Nothing in subsection (1) shall prejudice the operation of any written law imposing penalties on a liquidator in respect of any such default.
283 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-283. Notification that a company is in liquidation.
(1) Where a company is being wound up every invoice, order for goods or business letter issued by or on behalf of the company or a liquidator of the company or a receiver or manager of the property of the company, being a document on or in which the name of the company appears, shall have the words "in liquidation" added after the name of the company where it first appears therein.
(2) If default is made in complying with this section the company, and every officer of the company or liquidator and every receiver or manager who knowingly and wilfully authorizes or permits the default shall be guilty of an offence against this Act.
Penalty: Five hundred ringgit.
284 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-284. Books of company.
(1) Where a company is being wound up all books and papers of the company and of the liquidator that are relevant to the affairs of the company at or subsequent to the commencement of the winding up of the company shall, as between the contributories of the company, be prima facie evidence of the truth of all matters purporting to be therein recorded.
(2) When a company has been wound up the liquidator shall retain the books and papers referred to in subsection (1) for a period of five years from the date of dissolution of the company and at the expiration of that period may destroy them.
Penalty: Two thousand ringgit.
(3) Notwithstanding subsection (2), when a company has been wound up the books and papers referred to in subsection (1) may be destroyed within a period of five years after the dissolution of the company:
(a) in the case of a winding up by the Court, in accordance with the di
285 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-285. Investment of surplus funds on general account.
(1) Whenever the cash balance standing to the credit of any company in liquidation is in excess of the amount which, in the opinion of the committee of inspection, or, if there is no committee of inspection, of the liquidator, is required for the time being to answer demands in respect of the estate of the company, the liquidator, if so directed in writing by the committee of inspection, or, if there is no committee of inspection, the liquidator himself, may, unless the Court on application by any creditor thinks fit to direct otherwise and so orders, invest the sum or any part thereof in securities issued by the Government of Malaysia or of any State of Malaysia or place it on deposit at interest with any bank, and any interest received in respect thereof shall form part of the assets of the company.
(2) Whenever any part of the money so invested is, in the opinion of the committee of inspection, or, if there is no committee of inspection, of
286 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-286. Unclaimed assets to be paid to receiver of revenue.
(1) Where a liquidator has in his hands or under his control:
(a) any unclaimed dividend or other moneys which have remained unclaimed for more than six months from the date when the dividend or other moneys became payable; or
(b) after making final distribution, any unclaimed or undistributed moneys arising from the property of the company,
he shall forthwith pay those moneys to the Official Receiver to be placed to the credit of the Companies Liquidation Account and shall be entitled to the prescribed certificate of receipt for the moneys so paid and that certificate shall be an effectual discharge to him in respect thereof.
(2) The Court may, at any time on the application of the Official Receiver, order any liquidator to submit to it an account of any unclaimed or undistributed funds, dividends or other moneys in his hands or under his control verified by affidavit and may
287 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-287. Expenses of winding up where assets insufficient.
(1) Unless expressly directed to do so by the Official Receiver, a liquidator shall not be liable to incur any expense in relation to the winding up of a company unless there are sufficient available assets.
(2) The Official Receiver may, on the application of a creditor or a contributory, direct a liquidator to incur a particular expense on condition that the creditor or contributory indemnifies the liquidator in respect of the recovery of the amount expended and if the Official Receiver so directs gives such security to secure the amount of the indemnity as the Official Receiver thinks reasonable.
288 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-288. Resolutions passed at adjourned meetings of creditors and contributories.
Subject to subsection 260 (9) where a resolution is passed at an adjourned meeting of any creditors or contributories of a company, the resolution shall for all purposes be treated as having been passed on the date on which it was in fact passed and not on any earlier date.
289 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-289. Meetings to ascertain wishes of creditors on contributories.
(1) The Court may, as to all matters relating to the winding up of a company, have regard to the wishes of the creditors or contributories as proved to it by any sufficient evidence, and may, if it thinks fit for the purpose of ascertaining those wishes, direct meetings of the creditors or contributories to be called, held and conducted in such manner as the Court directs, and may appoint a person to act as chairman of any such meeting and to report the result thereof to the Court.
(2) In the case of creditors regard shall be had to the value of each creditor's debt.
(3) In the case of contributories regard shall be had to the number of votes conferred on each contributory by this Act or the articles.
290 Division 4 - Provisions Applicable To Every Mode Of Winding Up Subdivision (1) - General-290. Special commission for receiving evidence.
(1) The Sessions Court Judges shall be commissioners for the purpose of taking evidence under this Part, and the Court may refer the whole or any part of the examination of any witnesses under this Part to any person hereby appointed commissioner.
(2) Every commissioner shall, in addition to any powers which he might lawfully exercise as a Sessions Court Judge, have in the matter so referred to him the same powers as the Court of summoning and examining witnesses, of requiring the production or delivery of documents, of punishing defaults by witnesses and of allowing costs and expenses to witnesses.
(3) Unless otherwise ordered by the Court the taking of evidence by commissioners shall be in open court and shall be open to the public.
(4) The examination so taken shall be returned or reported to the Court in such manner as the Court directs.
291 Subdivision (2) - Proof and Ranking of Claims-291. Proof of debts.
(1) In every winding up, subject in the case of insolvent companies to the application in accordance with this Act of the law relating to bankruptcy, all debts payable on a contingency and all claims against the company present or future, certain or contingent, ascertained or sounding only in damages shall be admissible to proof against the company, a just estimate being made so far as possible of the value of such debts or claims as are subject to any contingency or sound only in damages or for some other reason do not bear a certain value.
(2) Subject to section 292, in the winding up of an insolvent company the same rules shall prevail and be observed with regard to the respective rights of secured and unsecured creditors and debts provable and the valuation of annuities and future and contingent liabilities as are in force for the time being under the law relating to bankruptcy in relation to the estates of bankrupt persons, and all persons
292 Subdivision (2) - Proof and Ranking of Claims-292. Priorities.
(1) Subject to this Act, in a winding up there shall be paid in priority to all other unsecured debts:
(a) firstly, the costs and expenses of the winding up including the taxed costs of a petitioner payable under section 220, the remuneration of the liquidator and the costs of any audit carried out pursuant to section 281;
(b) secondly, all wages or salary (whether or not earned wholly or in part by way of commission) including any amount payable by way of allowance or reimbursement under any contract of employment or award or agreement regulating conditions of employment, of any employee not exceeding one thousand five hundred ringgit or such other amount as may be prescribed from time to time whether for time or piecework in respect of services rendered by him to the company within a period of four months before the commencement of the winding up;
(c) thirdly, all amounts due in respect
293 Subdivision (3) - Effect on Other Transactions-293. Undue preference.
(1) Any transfer, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company which, had it been made or done by or against an individual, would in his bankruptcy under the law of bankruptcy be void or voidable shall, in the event of the company being wound up, be void or voidable in like manner.
(2) For the purposes of this section the date which corresponds with the date of presentation of the bankruptcy petition in the case of an individual shall be:
(a) in the case of a winding up by the Court:
(i) the date of the presentation of the petition; or
(ii) where before the presentation of the petition a resolution has been passed by the company for voluntary winding up the date upon which the resolution to wind up the company voluntarily, is passed,
whichever is the earlier; and
(b) in the c
294 Subdivision (3) - Effect on Other Transactions-294. Effect of floating charge.
A floating charge on the undertaking or property of the company created within six months of the commencement of the winding up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid except to the amount of any cash paid to the company at the time of or subsequently to the creation of and in consideration for the charge together with interest on that amount at the rate of five per centum per annum.
295 Subdivision (3) - Effect on Other Transactions-295. Liquidator's right to recover in respect of certain sales to or by company.
(1) Where any property, business or undertaking has been acquired by a company for a cash consideration within a period of two years before the commencement of the winding up of the company:
(a) from a person who was at the time of the acquisition a director of the company; or
(b) from a company of which, at the time of the acquisition, a person was a director who was also a director of the first-mentioned company,
the liquidator may recover from the person or company from which the property, business or undertaking was acquired any amount by which the cash consideration for the acquisition exceeded the value of the property, business or undertaking at the time of its acquisition.
(2) Where any property, business or undertaking has been sold by a company for a cash consideration within a period of two years before the commencement of the winding up of the company:
296 Subdivision (3) - Effect on Other Transactions-296. Disclaimer of onerous property.
(1) Where any part of the property of a company consists of:
(a) any estate or interest in land which is burdened with onerous covenants;
(b) shares in corporations;
(c) unprofitable contracts; or
(d) any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money,
the liquidator of the company, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may, with the leave of the Court or the committee of inspection and subject to this section, by writing signed by him, at any time within twelve months after the commencement of the winding up or such extended period as is allowed by the Court, disclaim the property; but where any such property has
297 Subdivision (3) - Effect on Other Transactions-297. Interpretation.
For the purposes of sections 298 and 299:
"bailiff" includes any officer charged with the execution of a writ or other process;
"goods" includes all movable property. 298 Subdivision (3) - Effect on Other Transactions-298. Restriction of rights of creditor as to execution or attachment.
(1) Where a creditor has issued execution against the goods or land of a company or has attached any debt due to the company and the company is subsequently wound up, he shall not be entitled to retain the benefit of the execution or attachment against the liquidator unless he has completed the execution or attachment before the date of the commencement of the winding up, but:
(a) where any creditor has had notice of a meeting having been called at which a resolution for voluntary winding up is to be proposed, the date on which the creditor so had notice shall for the purposes of this section be substituted for the date of the commencement of the winding up;
(b) a person who purchases in good faith under a sale by the bailiff any goods of a company on which an execution has been levied shall in all cases acquire a good title to them against the liquidator; and
(c) the rights conferred by t
299 Subdivision (3) - Effect on Other Transactions-299. Duties of bailiff as to goods taken in execution.
(1) Subject to subsection (3) where any goods of a company are taken in execution and, before the sale thereof or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the bailiff that a provisional liquidator has been appointed or that a winding up order has been made or that a resolution for voluntary winding up has been passed, the bailiff shall, on being so required, deliver the goods, and any money seized or received in part satisfaction of the execution to the liquidator, but the costs of the execution shall be a first charge on the goods or moneys so delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the purpose of satisfying that charge.
(2) Subject to subsection (3) where under an execution in respect of a judgment for a sum exceeding one hundred ringgit the goods of a company are sold or money is paid in order to avoid sale, the bailiff shall ded
300 Subdivision (4) - Offences-300. Offences by officers of companies in liquidation.
(1) Every person who, being a past or present officer or a contributory of a company which is being wound up:
(a) does not to the best of his knowledge and belief fully and truly discover to the liquidator all the property movable and immovable of the company, and how and to whom and for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company;
(b) does not deliver up to the liquidator, or as he directs:
(i) all the movable and immovable property of the company in his custody or under his control and which he is required by law to deliver up; or
(ii) all books and papers in his custody or under his control belonging to the company and which he is required by law to deliver up;
(c) within twelve months next before the commencement of the winding
301 Subdivision (4) - Offences-301. Inducement to be appointed liquidator.
Any person who gives or agrees or offers to give to any member or creditor of a company any valuable consideration with a view of securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the company's liquidator shall be guilty of an offence against this Act.
Penalty: Imprisonment for one year or one thousand ringgit.
302 Subdivision (4) - Offences-302. Penalty for falsification of books.
Every officer or contributory of any company being wound up who destroys, mutilates, alters or falsifies any books, papers or securities, or makes or is privy to the making of any false or fraudulent entry in any register or book of account or document belonging to the company with intent to defraud or deceive any person shall be guilty of an offence against this Act.
Penalty: Imprisonment for five years or thirty thousand ringgit.
303 Subdivision (4) - Offences-303. Liability where proper accounts not kept.
(1) If, on an investigation under any other Part or where a company is wound up, it is shown that proper books of account were not kept by the company throughout the period of two years immediately preceding the commencement of the investigation or winding up or the period between the incorporation of the company and the commencement of the investigation or winding up (whichever is the lesser) every officer who is in default shall, unless he acted honestly and shows that in the circumstances in which the business of the company was carried on the default was excusable, be guilty of an offence against this Act.
Penalty: Imprisonment for three years or ten thousand ringgit.
(2) For the purposes of this section, proper books of account shall be deemed not to have been kept in the case of any company if there have not been kept such books or accounts as are necessary to exhibit and explain the transactions and financial position of the trad
304 Subdivision (4) - Offences-304. Responsibility for fraudulent trading.
(1) If in the course of the winding up of a company or in any proceedings against a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court on the application of the liquidator or any creditor or contributory of the company, may, if it thinks proper so to do, declare that any person who was knowingly a party to the carrying on of the business in that manner shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court directs.
(2) Where a person has been convicted of an offence under subsection 303(3) in relation to the contracting of such a debt as is referred to in that section the Court, on the application of the liquidator or any creditor or contributory of the company, may, if it thinks proper so to do, declare that the
305 Subdivision (4) - Offences-305. Power of Court to assess damages against delinquent officers, etc.
(1) If in the course of winding up it appears that any person who has taken part in the formation or promotion of the company or any past or present liquidator or officer has misapplied or retained or become liable or accountable for any money or property of the company or been guilty of any misfeasance or breach of trust or duty in relation to the company, the Court may on the application of the liquidator or of any creditor or contributory examine into the conduct of that person, liquidator or officer and compel him to repay or restore the money or property or any part thereof with interest at such rate as the Court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust or duty as the Court thinks just.
(2) This section shall extend and apply to and in respect of the receipt of any money or property by any officer of the company duri
306 Subdivision (4) - Offences-306. Prosecution of delinquent officers and members of company.
(1) If it appears to the Court, in the course of a winding up by the Court, that any past or present officer, or any member, of the company has been guilty of an offence in relation to the company for which he is criminally liable, the Court may, either on the application of any person interested in the winding up or of its own motion, direct the liquidator either himself to prosecute the offender or to refer the matter to the Minister.
(2) If it appears to the liquidator, in the course of a voluntary winding up, that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, he shall forthwith report the matter to the Minister and shall, in respect of information or documents in his possession or under his control which relate to the matter in question, furnish the Minister with such information and give to him such access to and facilities for inspect
307 Subdivision (5) - Dissolution-307. Power of Court to declare dissolution of company void.
(1) Where a company has been dissolved the Court may, at any time within two years after the date of dissolution, on application of the liquidator of the company or of any other person who appears to the Court to be interested, make an order upon such terms as the Court thinks fit declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.
(2) The person on whose application the order was made, shall, within seven days after the making of the order or such further time as the Court allows, lodge with the Registrar and with the Official Receiver an office copy of the order and if he fails so to do shall be guilty of an offence against this Act.
Penalty: One thousand ringgit.
308 Subdivision (5) - Dissolution-308. Power of Registrar to strike defunct company off register.
(1) Where the Registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, he may send to the company by post a letter to that effect and stating that if an answer showing cause to the contrary is not received within one month from the date thereof a notice will be published in the Gazette with a view to striking the name of the company off the register.
(2) Unless the Registrar receives an answer within one month from the date of the letter to the effect that the company is carrying on business or is in operation, he may publish in the Gazette and send to the company by registered post a notice that at the expiration of three months from the date of that notice the name of the company mentioned therein will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved.
(3) If in any case where a company is being wound up the Registr
309 Subdivision (5) - Dissolution-309. Registrar to act as representative of defunct company in certain events.
(1) Where after a company has been dissolved, it is proved to the satisfaction of the Registrar:
(a) that the company if still existing would be legally or equitably bound to carry out, complete or give effect to some dealing, transaction or matter; and
(b) that in order to carry out, complete or give effect thereto some purely administrative act, not discretionary, should have been done by or on behalf of the company, if still existing,
the Registrar may, as representing the company or its liquidator under this section, do or cause to be done any such act.
(2) The Registrar may execute or sign any relevant instrument or document adding a memorandum stating that he has done so in pursuance of this section, and the execution or signature shall have the same force, validity and effect as if the company if existing had duly executed such instrument or document.
310 Subdivision (5) - Dissolution-310. Outstanding assets of defunct company to vest in Registrar.
(1) Where, after a company has been dissolved, there remains any outstanding property, movable or immovable, including things in action and whether within or outside Malaysia which was vested in the company or to which it was entitled, or over which it had a disposing power at the time it was so dissolved, but which was not got in, realized upon or otherwise disposed of or dealt with by the company or its liquidator, the property except called and uncalled capital shall, for the purposes of the following sections of this Subdivision and notwithstanding any written law or rule of law to the contrary, by the operation of this section be and become vested in the Registrar for all the estate and interest therein, legal or equitable, of the company or its liquidator at the date the company was dissolved, together with all claims, rights and remedies which the company or its liquidator then had in respect thereof.
(2) Where any claim, right or remedy
311 Subdivision (5) - Dissolution-311. Outstanding interests in property how disposed of.
(1) Upon proof to the satisfaction of the Registrar that there is vested in him by operation of section 310 or by operation of any corresponding previous written law or of a law of a designated country corresponding with section 318 any estate or interest in property, whether solely or together with any other person, of a beneficial nature and not merely held in trust, the Registrar may sell or otherwise dispose of or deal with such estate or interest or any part thereof as he sees fit.
(2) The Registrar may sell or otherwise dispose of or deal with the property either solely or in concurrence with any other person in such manner for such consideration by public auction, public tender or private contract upon such terms and conditions as he thinks fit, with power to rescind any contract and resell or otherwise dispose of or deal with such property as he thinks expedient, and may make, execute, sign and give such contracts, instruments and docum
312 Subdivision (5) - Dissolution-312. Liability of Registrar and Government as to property vested in Registrar.
Property vested in the Registrar by operation of this Subdivision or by operation of any corresponding previous written law shall be liable and subject to all charges, claims and liabilities imposed thereon or affecting the property by reason of any statutory provision as to rates, taxes, charges or any other matter or thing to which the property would have been liable or subject had the property continued in the possession, ownership or occupation of the company; but there shall not be imposed on the Registrar or the Government any duty, obligation or liability whatsoever to do or suffer any act or thing required by any such statutory provision to be done or suffered by the owner or occupier other than the satisfaction or payment of any such charges, claims or liabilities out of the assets of the company so far as they are in the opinion of the Registrar properly available for and applicable to the payment.
313 Subdivision (5) - Dissolution-313. Accounts and audit.
(1) The Registrar shall:
(a) record in the register of companies a statement of any property coming to his hand or under his control or to his knowledge vested in him by operation of this Subdivision and of his dealings therewith;
(b) keep accounts of all moneys arising therefrom and of how they have been disposed of; and
(c) keep all accounts, vouchers, receipts and papers relating to the property and moneys.
(2) The Auditor General shall have all the powers in respect of those accounts as are conferred upon him by any Act relating to audit of public accounts.
314 Division 5 - Winding Up Of Unregistered Companies-314. "Unregistered company".
(1) For the purposes of this Division
"unregistered company" includes a foreign company and any partnership, association or company consisting of more than five members but does not include a company incorporated under this Act or under any corresponding previous written law .Provisions of Division cumulative.
(2) The provisions of this Division shall be in addition to and not in restriction of any provisions contained in this or any other Act with respect to winding up companies by the Court and the Court or liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies.
315 Division 5 - Winding Up Of Unregistered Companies-315. Winding up of unregistered companies.
(1) Subject to this Division any unregistered company may be wound up under this Part, which Part shall apply to an unregistered company with the following adaptations:
(a) the principal place of business of the company in Malaysia shall for all the purposes of the winding up be the registered office of the company;
(b) no such company shall be wound up voluntarily; and
(c) the circumstances in which the company may be wound up are:
(i) if the company is dissolved or has ceased to have a place of business in Malaysia or has a place of business in Malaysia only for the purpose of winding up its affairs or has ceased to carry on business in Malaysia;
(ii) if the company is unable to pay its debts; and
(iii) if the Court is of opinion that it is just and equitable that the company should be wound up.
(2) An unregistered
316 Division 5 - Winding Up Of Unregistered Companies-316. Contributories in winding up of unregistered company.
(1) On an unregistered company being wound up every person shall be a contributory:
(a) who is liable to pay or contribute to the payment of:
(i) any debt or liability of the company;
(ii) any sum for the adjustment of the rights of the members among themselves; or
(iii) the costs and expenses of winding up; or
(b) where the company has been dissolved in the place in which it is formed or incorporated, who immediately before the dissolution was so liable,
and every contributory shall be liable to contribute to the assets of the company all sums due from him in respect of any such liability.
(2) On the death or bankruptcy of any contributory the provisions of this Act with respect to the personal representatives of deceased contributories and the assignees and trustees of bankrupt contributories respectively shall apply.
317 Division 5 - Winding Up Of Unregistered Companies-317. Power of Court to stay or restrain proceedings.
(1) The provisions of this Act with respect to staying and restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order shall, in the case of an unregistered company where the application to stay or restrain is by a creditor, extend to actions and proceedings against any contributory of the company.
(2) Where an order has been made for winding up an unregistered company, no action or proceeding shall be proceeded with or commenced against any contributory of the company in respect of any debt of the company except by leave of the Court and subject to such terms as the Court imposes.
318 Division 5 - Winding Up Of Unregistered Companies-318. Outstanding assets of defunct unregistered company.
(1) Where an unregistered company, the place of incorporation or origin of which is in a designated country, has been dissolved and there remains in Malaysia any outstanding property, movable or immovable, including things in action which was vested in the company or to which it was entitled or over which it had a disposing power at the time it was dissolved, but which was not got in, realized upon or otherwise disposed of or dealt with by the company or its liquidator before the dissolution, the property, except called and uncalled capital, shall, by the operation of this section, be and become vested, for all the estate and interest therein, legal or equitable, of the company or its liquidator at the date the company was dissolved, in such person as is entitled thereto according to the law of the place of incorporation or origin of the company.
(2) Where the place of origin of an unregistered company is Malaysia, sections 309 to 313 shall, wi
319 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-319. Interpretation.
(1) In this Division unless inconsistent with the context or subject matter:
"investment company" means a corporation (not being a private company) for the time being declared by order of the Minister to be an investment company;
"net tangible assets" means tangible assets at book values less total liabilities at book values and less any aggregate amount by which the book value of the marketable securities held by the corporation exceeds their market value. Order of investment companies.
(2) The Minister may, by order published in the Gazette , declare to be an investment company any corporation which is engaged primarily in the making of investments in marketable securities for the purpose of revenue and for profit and not for the purpose of exercising control, and the Minister may by like
320 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-320. Restriction on borrowing by investment companies.
An investment company shall not borrow an amount if that amount or the sum of that amount and any amounts previously borrowed by it and not repaid exceeds an amount equivalent to twice its net tangible assets.
321 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-321. Restriction on investments of investment companies.
(1) An investment company shall not invest an amount in a corporation if that amount, or the sum of that amount and amounts previously invested by it in that corporation and still so invested exceeds an amount equivalent to ten per centum of the net tangible assets of the investment company.
(2) An investment company shall not invest an amount in the ordinary shares of a corporation if that amount, or the sum of that amount and amounts previously invested by it in the ordinary shares of that corporation and still so invested exceeds an amount equivalent to ten per centum of the subscribed ordinary share capital of the corporation.
(3) Subsection (2) shall not apply in respect of a wholly-owned subsidiary of an investment company for the purpose of carrying out nominee, underwriting, dealing or other functions incidental to the business of an investment company.
322 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-322. Restriction on underwriting by investment companies.
(1) An investment company shall not underwrite any issue of authorized securities to an amount that, when added to the amount or amounts, if any, to which it has previously underwritten a current issue or issues of other authorized securities (not being an amount or amounts in respect of which the underwriting obligation has been discharged), exceeds an amount equivalent to fourty per centum of its net tangible assets.
(2) An investment company shall not underwrite any issue of non-authorized securities to an amount that, when added to the amount or amounts, if any, to which it has previously underwritten a current issue or issues of other non-authorized securities (not being an amount or amounts in respect of which the underwriting obligation has been discharged), exceeds an amount equivalent to twenty per centum of its net tangible assets.
Provisions for unloading securities underwritten and not taken up.
(3) Where:
323 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-323. Special requirements as to articles and prospectus.
An investment company shall not issue a prospectus or permit a prospectus to be issued on its behalf unless the prospectus specifies:
(a) the type of security in which it is among the objects of the company to invest; and
(b) whether it is among the objects of the company to invest within Malaysia or outside Malaysia or both.
324 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-324. Not to hold shares in other investment companies.
No investment company shall purchase or after the expiration of three years after it is declared to be an investment company hold any shares in or debentures of:
(a) any other investment company; or
(b) any corporation incorporated outside Malaysia which is engaged primarily in the making of investments in marketable securities for the purpose of revenue and for profit and not for the purpose of exercising control and which is specified by order of the Minister.
[Am. by Act A1022]
325 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-325. Not to speculate in commodities.
(1) No investment company shall for the purpose of profit buy or sell or deal in any raw materials or manufactured goods, whether in existence or not, otherwise than by investing in companies trading in those materials or goods.
(2) Subsection (1) shall not apply to or in relation to:
(a) any buying, selling or dealing by an investment company in pursuance of a contract entered into by the investment company before it was declared to be an investment company; or
(b) the selling of or the dealing in raw materials or manufactured goods acquired by the investment company before it was so declared.
326 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-326. Balance sheets and accounts.
(1) An investment company shall attach to its balance sheet a complete list of all the investments of the company as at the date of the balance sheet showing the descriptions and quantities of those investments.
(2) An investment company shall show separately in the profit and loss account, in addition to any other matters required to be shown therein, income from underwriting (including sub-underwriting).
327 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-327. Investment fluctuation reserve.
The net profits and losses of an investment company from the purchase and sale of securities shall be respectively credited and debited by the company to a reserve account to be kept by it and to be called the "investment fluctuation reserve".
328 PART XI VARIOUS TYPES OF COMPANIES, ETC. Division 1 - Investment Companies-328. Penalties.
(1) If default is made by an investment company in complying with this Division the investment company and every officer of the investment company who is in default shall be guilty of an offence against this Act.
Penalty: Imprisonment for five years or thirty thousand ringgit. Default penalty. Five hundred ringgit.
(2) No transaction entered into by the company shall be invalid by reason only of the default.
329 Division 2 - Foreign Companies-329. Foreign companies to which this Division applies.
This Division applies to a foreign company only if it has a place of business or is carrying on business within Malaysia.
330 Division 2 - Foreign Companies-330. Interpretation.
(1) In this Division, unless the contrary intention appears:
"agent" means the person named in a memorandum of appointment or power of attorney lodged under paragraph 332 (1) (e) or subsection 333 (6) or under any corresponding previous written law;
"carrying on business" includes establishing or using a share transfer or share registration office or administering, managing or otherwise dealing with property situated in Malaysia as an agent, legal personal representative, or trustee, whether by servants or agents or otherwise, and "to carry on business" has a corresponding meaning. (2) Notwithstanding subsection (1), a foreign company shall not be regarded as carrying on business within Malaysia for the reason only that within Malaysia it:
(a) is or becomes a party to any action or suit or any administrat
331 Division 2 - Foreign Companies-331. Power of foreign companies to hold immovable property.
Subject to and in accordance with any written law a foreign company registered under this Division shall have power to hold immovable property in Malaysia.
332 Division 2 - Foreign Companies-332. Documents etc, to be lodged by foreign companies having place of business in Malaysia.
(1) Every foreign company desiring to establish a place of business or to carry on business within Malaysia shall lodge with the Registrar for registration:
(a) a certified copy of the certificate of its incorporation or registration in its place of incorporation or origin or a document of similar effect;
(b) a certified copy of its charter, statute or memorandum and articles or other instrument constituting or defining its constitution;
(c) a list of its directors containing similar particulars with respect to its directors as are by this Act required to be contained in the register of the directors, managers and secretaries of a company incorporated under this Act;
(d) where the list includes directors resident in Malaysia who are members of the local board of directors, a memorandum duly executed by or on behalf of the foreign company stating the powers of the local dir
332A Division 2 - Foreign Companies-332A. Annual return.
(1) A foreign company shall lodge with the Registrar once in every calendar year a return in the form prescribed by regulations made up to the date of its annual general meeting.
(2) The return shall be lodged within a period of one month after the date to which it is made up or within such further period as the Registrar, in special circumstances, allows.
333 Division 2 - Foreign Companies-333. As to registered office and agents of foreign companies.
(1) A foreign company shall have a registered office within Malaysia to which all communications and notices may be addressed and which shall be open and accessible to the public for not less than five hours between the hours of nine o'clock in the morning and five o'clock in the evening each day, Saturdays, weekly and public holidays excepted.
(1A) Every foreign company shall, within one month after it establishes a place of business or commences to carry on business within Malaysia, lodge with the Registrar for registration notice in the prescribed form, of the situation of its registered office in Malaysia and, unless the office is open and accessible to the public during ordinary business hours on each day (weekly and public holidays excepted), the days and hours during which it is open and accessible to the public.
(2) An agent, until he ceases to be an agent in accordance with subsection (4), shall:
(a)
334 Division 2 - Foreign Companies-334. Transitory provision.
(1) On the lodging with the Registrar of particulars of a change or alteration in a matter referred to in paragraph 335(1) (f) , the Registrar shall issue a certificate in the prescribed form under his hand and seal, which certificate shall be prima facie evidence in all courts of the particulars mentioned in the certificate.
(2) Nothing in this Division shall require a foreign company which was registered under any of the repealed written laws immediately before the commencement of this Act as a foreign company to register pursuant to this Division but such a company shall comply with paragraphs 332(1) (d) and (f) within one month after the commencement of this Act.
335 Division 2 - Foreign Companies-335. Return to be filed where documents, etc, altered.
(1) Where any change or alteration is made in:
(a) the charter, statutes, memorandum or articles of the foreign company or other instrument lodged with the Registrar;
(b) the directors of the foreign company or in the name or address of any director;
(c) the agent or agents of the foreign company or the name or address of any agent;
(d) the situation of the registered office of the foreign company in Malaysia or of the days or hours during which it is open and accessible to the public;
(e) the address of the registered office of the foreign company in its place of incorporation or origin;
(f) the name of the foreign company; or
(g) the powers of any directors resident in Malaysia who are members of the local board of directors of the foreign company,
the foreign company shall, within one month or with
336 Division 2 - Foreign Companies-336. Balance sheets.
(1) Subject to this section a foreign company shall, within two months of its annual general meeting, lodge with the Registrar a copy of its balance sheet made up to the end of its last financial year in such form and containing such particulars and accompanied by copies of such documents as the company is required to annex, attach or send with its balance sheet by the law for the time being applicable to that company in the place of its incorporation or origin, together with a statutory declaration in the prescribed form verifying that the copies are true copies of the documents so required.
(2) The Registrar may, if he is of the opinion that the balance sheet and other documents referred to in subsection (1) do not sufficiently disclose the company's financial position, require the company to lodge a balance sheet within such period, in such form and containing such particulars and to annex thereto such documents as the Registrar by notice in
336A Division 2 - Foreign Companies-336A. Accounts to be kept by foreign companies.
(1) Every foreign company and the directors and managers thereof shall cause to be kept such accounting and other records in Malaysia as will sufficiently explain the transactions and financial position of the foreign company (arising out of its operations in Malaysia) and shall cause those records to be kept in such a manner as to enable them to be conveniently and properly audited.
(1A) The records referred to in subsection (1) shall be audited by a person approved under section 8.
(2) Every foreign company and the directors and managers thereof shall cause appropriate entries to be made in the accounting and other records within sixty days of the completion of the transactions to which they relate.
(3) Subsections 167(2), (3), (6) and (7) shall apply to foreign companies as if for references to "company" there were substituted references to "foreign company".
337 Division 2 - Foreign Companies-337. As to fee payable on registration of foreign company because of establishment of a share register in Malaysia.
(1) Where, on the registration of a company as a foreign company or on the lodging by a foreign company of a notice under subsection 335(2), the Registrar certifies in writing that he is satisfied that the company has established in Malaysia a share transfer or share registration office but has not otherwise carried on, is not otherwise carrying on and does not propose otherwise to carry on business in Malaysia, the liability to pay such part, if any, of the fee payable under item 18 or 19 of the Second Schedule in respect of the registration or the lodging of the notice as exceeds one thousand ringgit is, by force of this section, suspended until the company commences otherwise to carry on business in Malaysia or fails to comply with subsection (2), whichever first occurs, but thereupon the company is liable to pay to the Registrar that part of that fee.
(2) A company shall, so long as a suspension under subsection (1) of liability to pay a fe
338 Division 2 - Foreign Companies-338. Obligation to state name of foreign company, whether limited, and place where incorporated.
(1) A foreign company shall:
(a) conspicuously exhibit outside its registered office and every place of business established by it in Malaysia in romanised letters its name and the place where it is formed or incorporated;
(b) cause its name, company number and the place where it is formed or incorporated to be stated in legible romanised letters on all its bill-heads and letter paper and in all its notices, prospectuses and other official publications; and
(c) if the liability of its members is limited (unless the last word of its name is the word " Berhad " or "Limited" or the abbreviation " Bhd ." or "Ltd."), cause notice of that fact:
(i) to be stated in legible characters in every prospectus issued by it and in all its billheads, letter paper, notices, and other official publications in Malaysia; and
(ii) except in the case of a banking corpo
339 Division 2 - Foreign Companies-339. Service of notice.
Any document required to be served on a foreign company shall be sufficiently served:
(a) if addressed to the foreign company and left at or sent by post to its registered office in Malaysia;
(b) if addressed to an agent of the company and left at or sent by post to his registered address; or
(c) in the case of a foreign company which has ceased to maintain a place of business in Malaysia if addressed to the foreign company and left at or sent by post to its registered office in the place of its incorporation.
340 Division 2 - Foreign Companies-340. Cesser of business in Malaysia.
(1) If a foreign company ceases to have a place of business or to carry on business in Malaysia, it shall, within seven days after so ceasing, lodge with the Registrar notice of that fact, and as from the day on which the notice is so lodged its obligation to lodge any document (not being a document that ought to have been lodged before that day) with the Registrar shall cease, and the Registrar shall, upon the expiration of twelve months after the lodging of the notice, remove the name of that foreign company from the register.
(2) If a foreign company goes into liquidation or is dissolved in its place of incorporation or origin:
(a) each person who, immediately prior to the commencement of the liquidation proceedings, was an agent shall, within one month after the commencement of the liquidation or the dissolution or within such further time as the Registrar in special circumstances allows, lodge or cause to be l
341 Division 2 - Foreign Companies-341. Restriction on use of certain names.
(1) Except with the consent of the Minister, a foreign company shall not be registered by a name that, in the opinion of the Registrar, is undesirable or is a name, or a name of a kind, that the Minister has directed the Registrar not to accept for registration.
(2) Except with the consent of the Minister, any change in the name of a foreign company shall not be registered if in the opinion of the Registrar the new name of the company is undesirable or is a name, or a name of a kind, that the Minister has directed the Registrar not to accept for registration, notwithstanding that particulars of the change have been lodged in accordance with section 335.
(3) No foreign company to which this Division applies shall use in Malaysia any name other than that under which it is registered under this Division.
(4) If default is made in complying with subsection (3) the foreign company, every officer of the company who is in default and e
342 Division 2 - Foreign Companies-342. The branch register.
(1) Subject to this section, a foreign company which has a share capital and has any member who is resident in Malaysia, shall keep at its registered office in Malaysia or at some other place in Malaysia a branch register for the purpose of registering shares of members resident in Malaysia who apply to have the shares registered therein.
(2) The company shall not be obliged to keep a branch register pursuant to subsection (1) until after the expiration of two months from the receipt by it of an application in writing by a member resident in Malaysia for registration in its branch register in Malaysia of the shares held by the member.
(3) If default is made in complying with subsection (1) the foreign company, every officer of the company who is in default and every agent of the company who knowingly and wilfully authorizes or permits the default shall be guilty of an offence against this Act.
Penalty: Two hundred and fifty ring
343 Division 2 - Foreign Companies-343. Registration of shares in branch register.
Subject to this Act, on application in that behalf by a member resident in Malaysia, the foreign company shall register in a branch register of the company the shares held by a member which are registered in any other register kept by the company.
344 Division 2 - Foreign Companies-344. Removal of shares from branch register.
Subject to this Act, on application in that behalf by a member holding shares registered in a branch register, the foreign company shall remove the shares from the branch register and register them in such other register within Malaysia as is specified in the application.
345 Division 2 - Foreign Companies-345. Index of members, inspection and closing of branch registers.
Sections 158, 159 and 160 shall, with such adaptations as are necessary, apply respectively to the index of persons holding shares in a branch register and to the inspection and the closing of the register.
346 Division 2 - Foreign Companies-346. Application of provisions of Act relating to transfer.
Sections 103 and 104, subsections 105(1), 107 (1) and (3) and section 162 shall apply with necessary adaptations with respect to the transfer of shares on and the rectification of the branch register of a foreign company.
347 Division 2 - Foreign Companies-347. Branch register to be prima facie evidence.
A branch register shall be prima facie evidence of any matters by this Division directed or authorized to be inserted therein.
348 Division 2 - Foreign Companies-348. Certificate, re share holding.
A certificate under the seal of a foreign company specifying any shares held by any member of that company and registered in the branch register shall be prima facie evidence of the title of the member to the shares and the registration of the shares in the branch register.
349 Division 2 - Foreign Companies-349. Penalties.
If default is made by any foreign company in complying with any provision of this Division other than a provision in which a penalty or punishment is expressly mentioned, the company and every officer of the company who is in default and every agent of the company who knowingly and wilfully authorizes or permits the default shall be guilty of an offence against this Act.
Penalty: One thousand ringgit. Default penalty.
350 PART XII GENERAL Division 1 - Enforcement of Act-350. Service of documents on company.
A document may be served on a company by leaving it at or sending it by registered post to the registered office of the company.
351 PART XII GENERAL Division 1 - Enforcement of Act-351. Security for costs.
(1) Where a company is plaintiff in any action or other legal proceeding the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
Costs.
(2) The costs of any proceeding before a court under this Act shall be borne by such party to the proceedings as the court may, in its discretion, direct.
352 PART XII GENERAL Division 1 - Enforcement of Act-352. As to rights of witnesses to legal representation.
Any person summoned for examination under Part IX or under section 249 or 250 may at his own cost employ an advocate who shall be at liberty to put to him such questions as the inspector, Court, Sessions Court Judge or magistrate deems just for the purpose of enabling him to explain or qualify any answers given by him.
353 PART XII GENERAL Division 1 - Enforcement of Act-353. Disposal of shares of shareholder whose whereabouts unknown.
(1) Where by the exercise of reasonable diligence a company is unable to discover the whereabouts of a shareholder for a period of not less than ten years the company may cause an advertisement to be published in a newspaper circulating in the place shown in the register of members as the address of the shareholder stating that the company after the expiration of one month from the date of the advertisement intends to transfer the shares to the Minister charged with responsibility for finance.
(2) If after the expiration of one month from the date of the advertisement the whereabouts of the shareholder remain unknown, the company may transfer the shares held by the shareholder in the company to the Minister charged with responsibility for finance and for that purpose may execute for and on behalf of the owner a transfer of those shares to the Minister charged with responsibility for finance.
(3) The Minister shall sell or dispose of any
354 PART XII GENERAL Division 1 - Enforcement of Act-354. Power to grant relief.
(1) If in any proceeding for negligence, default, breach of duty or breach of trust against a person to whom this section applies it appears to the Court before which the proceedings are taken that he is or may be liable in respect thereof but that he has acted honestly and reasonably and that, having regard to all the circumstances of the case including those connected with his appointment, he ought fairly to be excused for the negligence, default or breach the Court may relieve him either wholly or partly from his liability on such terms as the Court thinks fit.
(2) Where any person to whom this section applies has reason to apprehend that any claim will or might be made against him in respect of any negligence, default, breach of duty or breach of trust he may apply to the Court for relief, and the Court shall have the same power to relieve him as under this section it would have had if it had been a Court before which proceedings against hi
355 PART XII GENERAL Division 1 - Enforcement of Act-355. Irregularities in proceedings.
(1) No proceeding under this Act shall be invalidated by any defect, irregularity or deficiency of notice or time unless the Court is of opinion that substantial injustice has been or may be caused thereby which cannot be remedied by any order of the Court.
(2) The Court may if it thinks fit make an order declaring that the proceeding is valid notwithstanding any such defect, irregularity or deficiency.
(3) Without affecting the generality of subsections (1) and (2) or of any other provision of this Act, where any omission, defect, error or irregularity (including the absence of a quorum at any meeting of the company or of the directors) has occurred in the management or administration of a company whereby any breach of this Act has occurred, or whereby there has been default in the observance of the memorandum or articles of the company or whereby any proceedings at or in connection with any meeting of the company or of the directors t
356 PART XII GENERAL Division 1 - Enforcement of Act-356. Privileged communications.
No inspector appointed under this Act shall require disclosure by an advocate of any privileged communication made to him in that capacity, except as respects the name and address of his client.
357 PART XII GENERAL Division 1 - Enforcement of Act-357. [Repealed by Act A836].
[Repealed by Act A836] .
358 PART XII GENERAL Division 1 - Enforcement of Act-358. Form of registers, etc.
(1) For the purposes of this Act any register, index, minute book or book of account may be kept either by making entries in a bound book or by recording the matters in question in any other permanent manner.
(2) Where any register, index, minute book or book of account required by this Act to be kept is not kept by making entries in a bound book, but by some other means:
(a) reasonable precautions shall be taken for guarding against falsification and for facilitating the discovery of any falsification; and
(b) proper facilities shall be provided to enable the register, index, minute book or book of account to be inspected,
and where default is made in complying with this subsection the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: Two thousand ringgit. Default penalty.
358A PART XII GENERAL Division 1 - Enforcement of Act-358A. Use of computers and other means for company records.
(1) The power conferred on a company by section 358 to keep a register and other records by recording the matters in question otherwise than by making entries in bound books includes the power to keep the register or other record (other than the minute books kept pursuant to section 156) by recording those matters in question otherwise than in a legible form, so long as the recording is capable of being reproduced in a legible form.
(2) Any provision of an instrument made by a company before the commencement of this Act which requires a register of holders of debentures of the company to be kept in a legible form shall be construed as requiring the register to be kept in a legible or non-legible form, provided, however, that a register kept in a non-legible form shall be capable of being reproduced in a legible form.
(3) If any such register or other record of a company is kept by the company by recording the matters in question otherwi
359 PART XII GENERAL Division 1 - Enforcement of Act-359. Inspection of registers.
(1) Any register, minute book or document of a corporation which is by this Act required to be available for inspection shall, subject to and in accordance with this Act, be available for inspection at the place where in accordance with this Act it is kept during the hours in which the registered office of the corporation is accessible to the public.
(2) Any person permitted by this Act to inspect any register, minute book or document of a corporation may make copies of or take extracts from it and any officer of the corporation who fails to allow any person so permitted to make a copy of or take extracts from the register, minute book or document, as the case may be, shall be guilty of an offence against this Act.
360 PART XII GENERAL Division 1 - Enforcement of Act-360. Translations of instruments.
(1) Where under this Act a corporation is required to lodge with the Registrar any instrument, certificate, contract or document or a certified copy thereof and the same is not written in the National Language or in English the corporation shall lodge at the same time with the Registrar a certified translation thereof either in the National Language or in English.
(2) Where under this Act a corporation is required to make available for public inspection any instrument, certificate, contract or document and the same is not written in the National Language or in English the corporation shall keep at its registered office in Malaysia a certified translation thereof either in the National Language or in English.
(3) Where any accounts, minute books or other records of a corporation required by this Act to be kept are not kept in the National Language or in English, the directors of the corporation shall cause a true translation of such acco
361 PART XII GENERAL Division 1 - Enforcement of Act-361. Certificate of incorporation conclusive evidence.
A certificate of incorporation under the hand and seal of the Registrar shall be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental thereto have been complied with, and that the company referred to therein is duly incorporated under this Act.
362 PART XII GENERAL Division 1 - Enforcement of Act-362. Court may compel compliance.
(1) If any person in contravention of this Act Court refuses or fails to permit the inspection of any register, minute book or document or to supply a copy of any register, minute book or document the Court may by order compel an immediate inspection of the register, minute book or document or order the copy to be supplied.
(2) If any officer or former officer of a company has failed or omitted to do any act, matter or thing which by or under this Act he is or was required or directed to do, the Court on the application of the Registrar or any member of the company or the Official Receiver or liquidator may by order require that officer or former officer to do the act, matter or thing forthwith or within such time as is allowed by the order, and for the purpose of complying with any such order a former officer shall be deemed to have the same status, powers and duties as he had at the time the act, matter or thing should have been done.
363 Division 2 - Offences-363. Restriction on offering shares, debentures, etc, for subscription or purchase.
(1) A person shall not, whether by appointment or otherwise, go from place to place:
(a) offering shares for subscription or purchase to the public or any member of the public; or
(b) seeking or receiving offers to subscribe for or to purchase shares from the public or from any member of the public;
Provided that this section shall not apply to an offer for subscription or purchase or invitation to subscribe for or purchase or recommendation to which the Securities Commission Act 1993 applies.
[Am. by Act A1081]
(2) Subsection (1) shall not apply in the case of the shares of any corporation which, after notice of intention in the form prescribed to apply for exemption from subsection (1) has been advertised in a newspaper circulating generally throughout Malaysia, has applied to the Yang di-Pertuan Agong for exemption and the application has on t
364 Division 2 - Offences-364. False and misleading statements.
(1) Every corporation which advertises, circulates or publishes any statement of the amount of its capital which is misleading or in which the amount of nominal or authorized capital is stated without the words "nominal" or "authorized", or in which the amount of capital or authorized or subscribed capital is stated but the amount of paid-up capital or the amount of any charge on uncalled capital is not stated as prominently as the amount of authorized or subscribed capital is stated, and every officer of the corporation who knowingly authorizes, directs or consents to the advertising, circulation or publication shall be guilty of an offence against this Act.
(2) Every person who in any return, report, certificate, balance sheet or other document required by or for the purposes of this Act makes or authorizes the making of a statement false or misleading in any material particular knowing it to be false or misleading or intentionally omits or a
364A Division 2 - Offences-364A. False reports.
(1) An officer of a corporation who, with intent to deceive, makes or furnishes or knowingly and wilfully authorizes or permits the making or furnishing of, any false or misleading statement or report to:
(a) a director, auditor, member, debenture holder or trustee for debenture holders of the corporation;
(b) in the case of a corporation that is a subsidiary, an auditor of the holding company;
(c) a prescribed Stock Exchange whether within or without Malaysia or an officer thereof; or
(d) the Securities Commission established under the Securities Commission Act 1993 [Act 498],
relating to the affairs of the corporation shall be guilty of an offence against this Act.
Penalty: Imprisonment for ten years or two hundred and fifty thousand ringgit or both.
(2) In subsection (1) "officer" includes a person who at a
365 Division 2 - Offences-365. Dividends payable from profits only.
(1) No dividend shall be payable to the shareholders of any company except out of profits or pursuant to section 60.
(1A)-(1D) [Deleted by Act A1081] .
(2) Every director or manager of a company who wilfully pays or permits to be paid any dividend out of what he knows is not profits except pursuant to section 60:
[Am. by Act A1081]
(a) shall without prejudice to any other liability be guilty of an offence against this Act; and
(b) shall also be liable to the creditors of the company for the amount of the debts due by the company to them respectively to the extent by which the dividends so paid have exceeded the profits and that amoun t may be recovered by the creditors or the liquidator suing on behalf of the creditors.
Penalty: Imprisonment for ten years or two hundred and fifty thousand ringgit o
366 Division 2 - Offences-366. Fraudulently inducing persons to invest money.
(1) Any person who, by any statement, promise or forecast which he knows to be misleading, false or deceptive or by any dishonest concealment of material facts or by the reckless making of any statement, promise or forecast which is misleading, false or deceptive, induces or attempts to induce another person to enter into or offer to enter into:
(a) any agreement for or with a view to acquiring, disposing of, subscribing in or underwriting marketable securities or lending or depositing money to or with any corporation; or
(b) any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of marketable securities or by reference to fluctuations in the value of marketable securities,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for ten years or two hundred and fifty thousand ringgit or both.
367 Division 2 - Offences-367. Penalty for improper use of words "Limited" and "Berhad".
(1) If any person carries on business under any name or title of which " Berhad " or any abbreviation thereof or "Limited" or any abbreviation thereof is the final word or abbreviation the person shall, unless duly incorporated with limited liability, be guilty of an offence against this Act.
Penalty: Imprisonment for three years or fifty thousand ringgit or both. Default penalty.
Restriction on use of word " Sendirian ".
(2) A company shall not use the word " Sendirian " or any abbreviation thereof as part of its name if it does not fulfil the requirements required by this Act to be fulfilled by private companies.
(3) Every company and every officer of a company who is in default shall be guilty of an offence against this Act.
Penalty: Imprisonment for three years or fifty thousand ringgit or both. Default penalty.
(4) Subject to section 35 and for the purpose of this sectio
368 Division 2 - Offences-368. Frauds by officers.
Every person who while an officer of a company:
(a) has by deceitful or fraudulent or dishonest means or by means of any other fraud induced any person to give credit to the company;
(b) with intent to defraud creditors of the company, has made or caused to be made any gift or transfer of or charge on, or has caused or connived at the levying of any execution against, the property of the company; or
(c) with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since or within two months before the date of any unsatisfied judgment or order for payment of money obtained against the company,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for ten years or two hundred and fifty thousand ringgit or both.
368A Division 2 - Offences-368A. Injunctions.
(1) Where a person has engaged, is engaging or intends to engage in conduct that constituted, constitutes or would constitute:
(a) a contravention of this Act;
(b) an attempt to contravene this Act;
(c) an attempt that aids, abets, advises or procures a person to contravene this Act;
(d) an attempt to induce, whether by threats, promises or otherwise, a person to contravene this Act;
(e) an attempt by which any person would be in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of this Act; or
(f) an attempt of conspiracy with others to contravene this Act, the Court may, on the application of the Registrar, or of a person whose interests have been, are or would be affected by the conduct, grant an injunction, on such terms as the Court thinks appropriate, restraining the first-mentioned p
368B Division 2 - Offences-368B. Protection to certain officers who make disclosures.
(1) Where an officer of a company in the course of performance of his duties has reasonable belief of any matter which may or will constitute a breach or non-observance of any requirement or provision of this Act or its regulations, or has reason to believe that a serious offence involving fraud or dishonesty, as defined under paragraph 174(8C) (b) has been, is being or is likely to be committed against the company or this Act by other officers of the company, he may report the matter in writing to the Registrar.
(2) The company shall not remove, demote, discriminate against, or interfere with the lawful employment or livelihood of such officer of the company by reason of the report submitted under subsection (1).
(3) No officer of a company shall be liable to be sued in any court nor be subject to any tribunal process, including disciplinary action for any report submitted by him under subsection (1) in good faith and in the in
369 Division 2 - Offences-369. General penalty provisions.
(1) A person who:
(a) does that which by or under this Act he is forbidden to do;
(b) does not do that which by or under this Act he is required or directed to do; or
(c) otherwise contravenes or fails to comply with any provision of this Act,
shall be guilty of an offence against this Act.
(2) A person who is guilty of an offence against this Act shall be liable on conviction to a penalty or punishment not exceeding the penalty or punishment expressly mentioned as the penalty or punishment for the offence, or if a penalty or punishment is not so mentioned, to a penalty not exceeding five thousand ringgit.
(3) The penalty or punishment, pecuniary or other, set out in, or at the foot of, any section or part of a section of this Act shall indicate that the offence is punishable upon conviction by a penalty or punishment not exceeding that so set out and
370 Division 2 - Offences-370. Default penalties.
(1) Where in, or at the foot of, any section or part of a section of this Act there appears the expression "Default penalty" it shall indicate that any person who is convicted of an offence against this Act in relation to that section or part shall be guilty of a further offence against this Act if the offence continues after he is so convicted and liable to an additional penalty for each day during which the offence so continues of not more than the amount expressed in the section or part as the amount of the default penalty or, if an amount is not so expressed, of not more than two hundred ringgit.
(2) Where any offence is committed by a person by reason of his failure to comply with any provision of this Act by or under which he is required or directed to do anything within a particular period, that offence, for the purposes of subsection (1) shall be deemed to continue so long as the thing so required or directed to be done by him remains u
371 Division 2 - Offences-371. Proceedings how and when taken.
(1) Except where provision is otherwise made in this Act proceedings, for any offence against this Act may be taken by the Registrar or, with the written consent of the Minister, by any person.
(2) Notwithstanding anything in any Act proceedings for any offence against this Act may be brought within the period of seven years after the commission of the alleged offence or, with the consent of the Minister, at any later time.
(3) Proceedings for any offence against this Act other than an offence punishable with imprisonment for a term exceeding three years may be prosecuted in a Magistrate's Court and in the case of an offence punishable with imprisonment for a term of three years or more shall be prosecuted in the Sessions Court or in the High Court.
(4) [Repealed by Act A836] .
(4A) [Repealed by Act A836] .
(5) Any punishment authorized by this Act may be imposed by a Sessions Court notwithstandin
371A Division 2 - Offences-371A. Compounding of offences.
(1) The Registrar may, in a case where he deems fit to do so, compound any offence committed by any person under this Act, by making a written offer to such person to compound the offence by paying to the Registrar such sum of money within such time as may be specified in the offer.
(2) An offer under subsection (1) may be made at any time after the offence has been committed, but before any prosecution for it has been instituted, and where the amount specified in the offer is not paid within the time specified in the offer, or within such extended period as the Registrar may grant, prosecution for the offence may be instituted at any time thereafter against the person to whom the offer was made.
(3) Where an offence has been compounded under subsection (1), no prosecution shall thereafter be instituted in respect of such offence against the person to whom the offer to compound was made.
372 Division 3 - Miscellaneous-372. Rules.
The Rules Committee constituted under the Courts of Judicature Act 1964 [Act 97] , may, subject to and in accordance with the provisions of that Act relating to the making of rules, make rules:
(a) with respect to proceedings and the practice and procedure of the Court under this Act;
(b) with respect to any matter or thing which is by this Act required or permitted to be prescribed by rules;
(c) without limiting the generality of the provisions of this section, with respect to Court fees and costs and with respect to rules as to meetings ordered by the Court; and
(d) generally with respect to the winding up of companies.
373 Division 3 - Miscellaneous-373. Regulations.
(1) The Minister may make regulations for or with respect to:
(a) the duties and functions of the Registrar, Regional Registrars, Deputy Registrars, Assistant Registrars and other clerks and servants appointed to assist with the administration of this Act;
(b) the establishment and functions of Regional Registries;
(c) the lodging or registration of documents and the time and manner of submission of documents for lodging or registration;
(d) prescribing forms for the purposes of this Act;
(e) prescribing fees, not in any case exceeding fifty ringgit, to be paid to the Registrar in respect of matters or things not provided for in the Second Schedule in respect of any document required to be lodged, filed, registered with or issued by the Registrar under this or any other Act or for any act required to be performed by the Registrar or for the inspection of a
374 Division 3 - Miscellaneous-374. Power to amend Schedules.
The Minister may, by order, add to, delete, vary or amend all the Schedules to this Act and such order shall be published in the Gazette.
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