MALAYSIA – New Companies Act 2016

On 31 August 2016, the Companies Act 2016 (“CA 2016”) had been gazetted to replace the Companies Act 1965 (“Old CA”) to provide greater flexibility, certainty and ease for those operating or doing business using Malaysia companies.

The Companies Commission of Malaysia (“SSM” or “the Registrar”) have notified that the CA 2016 and Company Regulations 2017 (CR 2017) will be implemented on a staggered basis with the first phase effective from 31 January 2017 (“Enforcement Date”). With the enforcement of the first phase of the CA 2016, the old CA is repealed.

 

Basic philosophies adopted in modernizing the Malaysian Companies Act :

  • The introduction of a new legal framework applicable to all companies;
  • Simplifying laws and procedures for companies based on private/public distinction and facilitating the growth of private companies; and
  • Removing obstacles and facilitating the growth of private companies

In order to facilitate and modernize the entrance into the corporate sector, some of the new provisions / features introduced are:

  • Introduction of single member/director company
  • Abolition of the authorized capital concept
  • Abolition of concept of shares with nominal value
  • Companies are no longer required to have constitution or memorandum & articles of association
  • Companies are not required to have a common seal
  • Abolition of the requirement for annual general meeting for private companies
  • Decoupling of lodgement of Annual Return and Financial Statements

 

The new CA 2016 encapsulates the dynamic business environment in today’s global corporate scenario, as well as the consistent growth of the Malaysian economy.

The CA 2016 is at par with global standards. It ensures that the route for starting a business in Malaysia is more competitive, which in turn will attract more investments and promote the growth of Small & Medium Enterprises (‘SME’) in Malaysia.

 

Read the full article here:
Malaysia Companies Act 2016