Malaysia New Company Act 2016 Introduced by CCM

30 latest new changes introduced in Malaysia New Company Act 2016 on Malaysia Sdn Bhd company incorporation. 

The Malaysia New Company 2016  affects Malaysians as well as foreigners introduced by Company Commission of Malaysia (CCM), the changes are as follows:

1. Single person to own the company – one director and one shareholder, with maximum 50. A shareholder can be natural or corporate. Qualifying directors and shareholders of natural person can be accepted they are aged above 18 and have a local resident address in Malaysia  Malaysia New Company Act 2016
2. No par value, no more authorised capital concept. The fees charged by CCM will be based on paid up. Can issue shares certificate with payment outstanding by the shareholder to the company with approval by the members
3. Share certificates will only be issued upon application by the shareholders
4. Company Secretary is optional at the point of company incorporation. Initial registration can be done by shareholder directly with CCM. Within 30 days, at least one company secretary must be appointed
5. Nature of business is unlimited as long as it is lawful but at the point of registration, need to state 3 main activities
6. Constitution (M&A and A&A) is optional. The constitution can be launched anytime up to the decision of the board
7. All submission to CCM to be done by Company Secretary using SUPERFORM, the all in one form
8. Common seal is optional. For the execution of documents, it to be done by a director and authorised. Officer ( company secretary /auditor) or a witness if it is a single person company
9. Company Secretary must report to CCM within 14 days on any changes of name and number of shares in the Register of members. Register of members is a must to record all members
10. Directors fee required to pass resolutions, it can be passed before or after directors fee payment has been made
11. If the Director also perform other services to the company, it is required to have a Director Service Contract drawn up and be approved by all Directors
12. Directors cannot have voting right unless specify in the constitution
13. Any negligence done by the Directors, the fine will be RM3 million each Director
14. Notice of Registration will be the incorporation certificate, the original copy of can be purchased from CCM when needed
15. Resignation of company secretary by notifying CCM to vacate office by giving 30 days notice, after 30 days company will be removed from the CCM system
16. Auditor is a must be appointed for the company. They can vacate office after 21 days by giving notice in writing and delivered of the company
17. Name reservation service is optional. Registration will be done straight upon name available
18. Annual General Meeting is no longer needed. If they wanted, it will be called a meeting of members. All decisions will be written resolutions signed by members of 75% voting rights
19. The methods of communications used between company, directors, and members by either electronic, etc for resolutions must be stated in the constitutions
20. The main venue for meeting and decision making shall be in Malaysia where the chairperson must be present
21. Director can pass a Resolution in advance, stating his wishes and this resolution to be kept with Company Secretary, in the event he passed away. The company secretary will act accordingly as per resolution
22. The voting right of shareholders based on the number of shares, not the value he/she paid
23. Transfer of shares will take effect after the stamp duty date, not from the date of the resolution
24. Reduction of share capital not required to go through a court application
25. The company can provide 10% financial assistance of the shareholder fund to enable a person to buy the shares if the company and must have solvency statement by all directors. Only for private company
26. The dividend is made strictly from the company’s net profit and it must be accompanied by company solvency statement issued by all directors
27. Creditors can apply for a judicial management (JM) order on the company instead of applying to court to wind up the company. Once the company in JM order, no legal action, winding, etc
    Judicial manager can be auditors, lawyers, etc and fees must be agreed with creditors and company
28. Annual Return must be lodged within 30 days of the anniversary of the company
29. Failure to lodge Annual Return for more than 3 consecutive years is a ground for striking off by CCM. Once the striking approved, it will be accompanied by one gazette notice only
30. Financial statements must be audited and to be lodged within 30 days to CCM from the time the financial were circulated to members. The financial statement required to be ready within 6 months from the date of closing of your financial year end.
    

CCM is proposing that auditing of a financial statement may not be required for company turnover of less than RM 300,000, less than 5 employees and assets paid up no more than RM 500,000.

The company still need to submit the financial statement to CCM, sign by all members. Malaysia New Company Act 2016

There is no changes in the Company Act for Labuan company set up. It would be good to check both options of setting up Malaysia Sdn Bhd and Labuan company to match your nature of business before you commit to maximise your return.  Know more:

• Common problems facing by foreigners on Malaysia Sdn Bhd company
• Difference between Malaysia Sdn Bhd company and Labuan company
• Key advantages of Labuan company
• Labuan trading company tax benefits and compliance
• Labuan investment company tax benefits and compliance

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