Companies Act 2016 and Companies Regulations 2017
Following last Tuesday’s announcement by the Companies Commission of Malaysia (“CCM”), the first phase of the CA 2016 and the Companies Regulations 2017 (“CR 2017”) have now taken effect. This also means the repeal of the Companies Act 1965.
Save and except for s 241 (relating to the requirement for company secretaries to register with the Registrar) and Division 8 of Part III (relating to corporate rescue mechanisms on corporate voluntary arrangement and judicial management), all provisions of the CA 2016 are in force, including the provisions on the following matters:
(a) A private company may be incorporated by having only one shareholder and such shareholder may also be the sole director of the company.
(b) A company incorporated after 31 January 2017 is not required to have memorandum & articles of association (“M&A”) or a constitution. For companies incorporated before that date, they may continue to adopt their existing M&A as the constitution and the said M&A “… shall have effect as if made or adopted under this Act, unless otherwise resolved by the company” (s 619(3) of the CA 2016).
(c) It is no longer necessary for a company to have a common seal.
(d) A company will no longer have to state its authorised share capital, but is required to notify the CCM of
its issued share capital and paid-up capital, and the changes in shareholders/shareholdings within
specific time frames.
(e) All shares issued by a company before or after 31 January 2017 shall have no par or nominal value.
(f) It is no longer mandatory for a private company to hold annual general meetings.
In respect of the CR 2017, the regulations mainly deal with matters relating to the electronic filing system and the fees payable to the CCM for lodgement of documents and applications via the electronic filing system.
The fees payable for the application for incorporation under s 14 of the CA 2016 as stipulated under the CR 2017 are as follows:
As all companies in Malaysia will now be governed and regulated by the CA 2016 and the CR 2017, it would be prudent for their top officials to be conversant with the new provisions in order to ensure good corporate governance, compliance and consistency in their management and operations.