Companies Bill Explanatory Memorandum c. V38 (formal consultation document). Page iii. Part 35 (clauses to ) enables the appointment by. The review exercise is that the new companies bill , which is yet to be passed into law is regarded as progressive and user friendly than. Kok Chee Kheong highlights some of the significant changes under the Companies Bill On 2 July , the Companies Commission of Malaysia (“CCM”).
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After an extension, the period for public consultation closed on 10 August The Bill will usher in many changes to the principal legislation that governs the formation, operation and regulation of companies in Malaysia.
companies bill 2013
In this first of a series of articles, we will highlight some of the more significant and interesting changes that will be introduced under the Bill.
The CA requires a company to be formed by two or more persons although shares may subsequently be transferred to a corporation so that the company becomes a wholly-owned subsidiary of another corporation.
Certificate of incorporation Under the Bill, a certificate of incorporation companies bill 2013 no longer be issued upon the incorporation of a company.
Instead, the CCM will issue a notice of registration which, inter alia, is conclusive evidence that the company has been duly companies bill 2013 under the Act Clause A certificate of incorporation will only be issued upon application and payment of a prescribed fee Clause Constitution The other main companies bill 2013 documents under the CA, namely the memorandum and articles of association, are replaced by a constitution under the Bill.
Companies Act - Wikipedia
Interestingly, the Bill companies bill 2013 with the requirement for a company other than a company limited by guarantee to have a constitution Clauses 30 1 and 37 1. If a company elects not to adopt a constitution, the rights, powers, duties and obligations of the directors and members will be governed by the Act Clause 30 3.
If a company adopts a constitution, the rights, powers, companies bill 2013 and obligations of the directors and members will be as set out in the Act save insofar as they are modified by the constitution Clause 30 2.
The Bill further provides that the constitution has no effect to the extent that it contravenes or is inconsistent with the provisions of the Act Clause 31 2. Capacity of a company Clause 20 of the Companies bill 2013 states that upon incorporation, a company shall have full capacity to companies bill 2013 on or undertake any business or activity, do any lawful act and do or enter into transactions Clause 20 1.
Companies Act 2013
This is a major departure from the existing companies bill 2013 under the CA where a company may only undertake activities which are within, and in furtherance of, the objects specified in its memorandum of association.
According to Recommendation 1.
Where a company has adopted a constitution which companies bill 2013 out the objects of the company, it shall be restricted from carrying on any business or activity which is not within those objects Clause 34 2 companies bill 2013. The Bill further provides that the company shall have unlimited capacity under clause It is unclear whether this provision means that a company incorporated under the CA ceases to be bound by the object clauses specified in its memorandum of association upon the Act coming into force.
It is submitted that the objects should continue to apply to a company that is incorporated under the CA as that would be consistent with the new regime which permits a company which adopts a constitution to restrict its objects to those specified in its constitution.
Perhaps this issue should be clarified in the Bill.
Common seal and incidental matters Unlike the CA, companies bill 2013 Bill does not impose an obligation on a company to adopt a common seal. Instead, it confers discretion on a company to do so Clause 60 1.
ACTS & RULES
If a company does not adopt a common seal, it can make a contract, written or oral, through a person acting under its express or implied authority and execute documents by having the same signed by two authorised officers, i. Amendment of constitution The Companies bill 2013 provides a procedure for amending a constitution which is similar to the procedure in the CA, that is by way of a special resolution of the members in general meeting.
In addition, clause 36 1 of the Bill introduces a new procedure which allows the court, on application of a director or member, to make an order to amend the constitution if the court is satisfied that it is not practicable to do so using the procedures specified in the Bill or companies bill 2013 constitution.
This change companies bill 2013 only complements the new regime that accords a company with the full capacity of a natural person but goes further in that in relation to a company which has adopted a constitution, a person who deals with that company is not deemed to have constructive notice of the objects and other provisions contained in the constitution by reason of that document being lodged with the Registrar.
Second, a CLBG may only be formed for the purposes of providing recreation or amusement or promoting commerce and industry, art, science, religion, charity, pension or superannuation schemes or any other object that is useful for the community Clause 44 1.
A Review of the Companies Bill Part 1
In other words, a CLBG can no longer be incorporated for profit-making purposes. Consistent with the objectives set out above, the Bill prohibits a CLBG from paying companies bill 2013 dividend to its members Clause 44 2 b.
Further, in the event that a CLBG is wound up, the Bill requires its assets to be transferred to another body that has objects similar to those of that CLBG or objects which are for the promotion companies bill 2013 charity Clause 44 2 c.
The new provision is substantially similar to section 69O of the CA but is wider in scope as the new provision applies companies bill 2013 any member whilst section 69O only applies to a substantial shareholder of the company.
- Ministry Of Corporate Affairs - Companies Act,
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