Company Incorporation & Company Secretary Services [成立有限公司]
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The secretarial services are provided by our associate secretary firm based in Johor Bahru. Our Company Secretary has wide experience in the secretary matters and well verse with the provision of the Companies Act 1965. They provided one-stop secretarial related services, ranging from:
- Company incorporation/ Company formation
- local town council licensing application
- chartered secretarial services
- advice on compliance to existing Company Act 1965
Our associate firm offered a competitive incorporation fee and monthly secretarial fees without sacrifice the quality of secretarial services.
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7 of the more significant areas we will see in the new Companies Act 2016
1. Easier Incorporation of Companies
The Act will introduce the ability to incorporate a company with one individual being the single shareholder and single director. This will make incorporating a company more attractive for businesses, entrepreneurs and the businessman. A single individual can have complete control of the company, and still enjoy the separate liability of the corporate entity.
2. Lower Costs of Running Companies:
No AGM for Private Companies In line with this, there will be no more need for an annual general meeting (AGM) for private companies. Some important things flow from this. For private companies, audited accounts are no longer put before the AGM. Instead, there will be a timeline to circulate the audited accounts among the shareholders. There is also a mechanism for the automatic reappointment of auditors, unless the shareholders decide otherwise.
3. Easier Passing of Written Resolutions for Private Companies
With the move away from physical general meetings, private companies will also find it easier to pass written shareholder resolutions. A majority of shareholders can sign off on the written resolution to pass it as an ordinary resolution. There is no more need to have the unanimous written resolution.
4. No More Memorandum and Articles of Association Under the Act, the company will no longer have a Memorandum and Articles of Association.
The new Act aims to provide all the processes and provisions necessary for the smooth-running of a company. However, if a company wishes to tailor certain provisions for itself, it can then adopt a Constitution. Existing companies will have its Memorandum and Articles of Association deemed to be the new Constitution.
5. Added Safeguards:
New Solvency Test Requirement Going hand-in-hand with making corporate processes easier, certain safeguards will be put in place. This is to protect third parties doing business with companies and where their rights as creditors should not be prejudiced. There will be different varieties of a new ‘solvency test’ that will be applied for different situations. Directors must sign on the equivalent of a statutory declaration to verify that the company is solvent when the company undertakes the following: (i) Declaration of dividends; (ii) Capital reduction without a court order, financial assistance and redemption of preference shares; and (iii) Share buyback. Where there is a breach of this solvency test, the directors then face personal liability and may face criminal sanctions.
6. Increase in Sanctions on Directors
There is a general increase in the sanctions that directors will face for breaches under the Act. The more serious infractions can result in a 5-year imprisonment and RM3 million fine or both, if there is a criminal conviction.
7. Corporate Rescue:
Corporate Voluntary Arrangement and Judicial Management The new Act will introduce two new corporate rescue mechanisms to help financially distressed companies. The aim is to allow these companies to restructure their debts, to remain as a going concern and to avoid winding up. Firstly, there will be the new corporate voluntary arrangement process, adopting the provisions from the UK. This is meant to be a quick and cheaper process, with minimal Court involvement. The company’s management will have its debt restructuring proposal assessed by an independent insolvency practitioner. 75% in value of the company’s creditors will then vote on whether to accept this proposal. If passed, it then binds all the creditors. Secondly, judicial management is a mechanism based on the Singapore provisions and UK’s administration model. The management of the company itself is ceded over to an independent insolvency practitioner i.e. a Court-appointed judicial manager. The company will enjoy a very wide moratorium which gives it protection from legal proceedings. This is to give the company and the judicial manager breathing room and to maintain the company as a going concern. The judicial manager formulates a restructuring plan and presents it to the creditors for their approval.
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Guidelines of Company Formation/ Incorporation (Under Companies Act 1965, repealed after 31 January 2017)
Setting up businesses in Malaysia. There are two types of companies can be incorporated under Companies Act 1965 :
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- Company Limited by Shares
- An Unlimited Company
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Company Limited by Shares
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A company having a share capital may be incorporated as a private company (identified through the words ‘Sendirian Berhad’ or ‘Sdn. Bhd.’ appearing together with the company’s name) or public company ‘Berhad’ or ‘Bhd’ appearing together with the company’s name).
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The requirements to form a company are :
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No
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Description
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1
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A minimum of two subscribers to the shares of the company (Section 14 CA);
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2
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A minimum of two directors (Section 122); and
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3
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A company secretary who can be either :
- An individual who is a member of a professional body prescribes by the Minister of Domestic Trade Cooperative and Consumerism; or
- An individual licensed by the Companies Commission of Malaysia (SSM)
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Both the director and company secretary shall have their principal or only place or residence within Malaysia.
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Unlimited Company
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The procedures and Incorporation Documents for the incorporation of an unlimited company is the same as company limited by shares. The only difference is that for an unlimited company, the liability of its members must be stated in the Memorandum of Association as unlimited.
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Incorporation Procedures
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Application of Name Search
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A name search must be conducted to determine whether the proposed name of the company is available. Refer to Government Gazette No. 716 dated 30 January 1997, Gazette (Amendment) dated 11 October 2001, Guidelines For Naming A Company and Guidelines For Application Of A Company Name. The steps involved are:
- Completion and submission of Form 13A CA (Request for Availability of Name) using mycoid to SSM; and
- Payment of a RM30.00 fee online for each name applied.
Where the proposed company’s name is approved by SSM, it shall be reserved for three months from the date of approval.
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Lodgement of Incorporation Documents
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Incorporation Documents must be submitted to SSM using mycoid within 3 month from the date of approval of the company’s name by SSM, failure of which a fresh application for a name search must be done. (Steps above shall have to be repeated).
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Memorandum and Article of Association (M&A)
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Payment of RM200.00 stamp duty to Inland Revenue Board & RM10.00 for agency pre-registration fee online.
- The first directors and secretaries shall be named in the Memorandum and Article of Association.
- The subscribers to the company’s shares shall sign the Memorandum and Articles of Association in front of a witness.
- Table A of the Fourth Schedule in the CA can be adopted as the Article of Association of the company (Section 30 CA).
*NOTE: For incorporation of a private company, the articles of association shall contain the following stipulations.
- Restriction on the right to transfer the company’s shares;
- Limitation on the number of members to not exceed fifty;
- Prohibition to any invitation to the public to subscribe the shares/debentures of the company; and
- Prohibition on public invitation to deposit money with the company.
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Form 48A (Statuary Declaration by A Director or Promoter before Appointment)
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The director or promoter declares under oath that :
- He / She is not a bankrupt; and
- He / She has not been convicted and imprisoned for any prescribed offences.
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Registration fees
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Each application for the incorporation of a company shall be accompanied with payment as per the schedule following:
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Authorised Share Capital
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Fees (RM)
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Up to 400,000
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1,000
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400,001 - 500,000
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3,000
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500,001 - 1 million
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5,000
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1,000,001 - 5 million
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8,000
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5,000,001 - 10 million
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10,000
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10,000,001 - 25 million
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20,000
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25,000,001 - 50 million
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40,000
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50,000,001 - 100 million
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50,000
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100,000,001 and above
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70,000
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Certificate of corporation
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A certificate of Incorporation will be issued by SSM upon compliance with the incorporation procedures and submission of the duly completed Incorporation Documents
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Code of Ethics for Company Directors
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In the performance of his duties, a director should at all times observe the following codes:
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No
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Description
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1
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Strive for professional competency and at all times exhibit a high degree of skill and proficiency in the performance of the duties of his office;
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2
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At all times, exercise the utmost good faith and act both responsibly and honestly with reasonable care and due diligence in the discharge of the duties of his office;
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3
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At all times, strive to assist the company towards its prescribed objectives based on the tenets of moral responsibility, efficiency, and effectiveness in administration;
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4
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Should devote time and effort to attend meetings and to know what is required of the board and each of its directors, and to discharge those functions;
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5
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Should ensure at all times that the company is properly managed and effectively controlled
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6
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Should stay abreast of the affairs of the company and be kept informed of the company's compliance with the relevant legislation and contractual requirements;
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7
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Should insist on being kept informed on all matters of importance to the company in order to be effective in corporate management;
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8
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Should limit his directorship of companies to a number in which he can best devote his time and effectiveness; each director is his own judge of his abilities and how best to manage his time effectively in the company in which he holds directorship;
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9
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Should have access to the advice and services of the company secretary, who is responsible to the board to ensure proper procedures, rules and regulations are complied with;
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10
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Should at all times exercise his powers for the purposes they were conferred, for the benefit and prosperity of the company;
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11
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Should disclose immediately all contractual interests whether directly or indirectly with the company;
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12
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Should neither divert to his own advantage any business opportunity that the company is pursuing, nor may he use confidential information obtained by reason of his office for his own advantage or that of others;
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13
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Should at all times act with utmost good faith towards the company in any transaction and to act honestly and responsibly in the exercise of his powers in discharging his duties; and
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14
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Should be willing to exercise independent judgment and, if necessary, openly oppose if the vital interest of the company is at stake
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15
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Relationship with Shareholders, Employees, Creditors and Customers
- Should be conscious of the interest of shareholders, employees, creditors and customers of the company;
- Should at all times promote professionalism and improve the competency of management and employees; and
- Should ensure adequate safety measures and provide proper protection to workers and employees at the workplace.
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16
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Social Responsibilities and the Environment
- Should ensure that necessary steps are taken in accordance with the law to properly wind-up or strike off the company register if the company has not commenced business or has ceased to carry on business and is not likely to commence business in the future or resume business as the case may be;
- Should adopt an objective and positive attitude and give the utmost cooperation for the common good when dealing with government authorities or regulatory bodies;
- Should ensure the effective use of natural resources, and improve quality of life by promoting corporate social responsibilities;
- Should be more proactive to the needs of the community and to assist in society-related programmes in line with the aspirations of the concept of 'Caring Society' in Vision 2020; and
- Should ensure that the activities and the operations of the company do not harm the interest and well-being of society at large and assist in the fight against inflation.
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Code of Ethics for Company Secretaries
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In the performance of his duties, a director should at all times observe the following codes:
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No
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Description
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1
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Should have a clear understanding of the aims and purpose, capabilities and capacity of the company;
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2
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Should have a clear understanding of the aims and purpose, capabilities and capacity of the company;
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3
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Should have a clear understanding of the aims and purpose, capabilities and capacity of the company;
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4
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Have a clear understanding of the aims and purpose of the company as well as the powers and restrictions as provided in the Memorandum and Articles of Association of the company;
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5
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Be knowledgeable of regulations and procedures for meetings, particularly quorum requirements, voting procedures and proxy provisions and be responsible for the proper administration of meetings;
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6
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Neither direct, for his own advantage, any business opportunity that the company is pursuing nor use or disclose to any party any confidential information obtained by reason of his office, for his own advantage or that of others;
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7
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Adopt an objective and positive attitude and provide full co-operation for common benefit when dealing with government authorities or regulatory bodies;
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8
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Disclose to the board of directors or an appropriate public officer any information within his knowledge that he honestly believes suggests that a fraud is being, or is likely to be, practised by the company or by any of its directors or employees;
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9
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Limit his secretarial-ship of companies to a number in which he can best and fully devote his times and effectiveness;
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10
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Assist and advise the directors to ensure that the company, at all times, maintains an effective system of internal control for the keeping of the necessary registers and accounting records;
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11
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At all times, be impartial in his dealings with shareholders, directors and, without fear or favour, use his best endeavours to ensure that the directors and the company comply with the relevant legislation, contractual obligations and other relevant requirements;
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12
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Be present in person, or ensure that in his absence he is represented, at the company's registered office on the days and at the hours that the office is accessible to the public;
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13
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Advise the board of directors so that no policy which is in conflict with the interest of the company’s stakeholders is adopted by the company;
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14
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Be aware of all reporting and other requirements imposed by the statute under which the company is incorporated;
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15
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Be present or represented at company meetings and not allow himself or his representative to be excluded or withdrawn from those meetings in a way that would prejudice his professional responsibilities as secretary of the company.
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