Download companies act 1985

The NCLT can hear cases related to the management of a company, mergers, and rehabilitations of companies, among other issues.

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What Is Demonetization? Persons disqualified from being a director Power of Court to disqualify persons from acting as director or promoter Power of Registrar to remove name of disqualified director Directors' consent required Named directors and subsequent directors Appointment of directors of public company to be voted on individually Validity of acts of directors and officers Retirement of directors Removal of directors Right to be heard for directors of public company against removal Vacation of office of director Resignation, vacation or death of sole director or last remaining director Subdivision 3 Directors' Duties and Responsibilities Interpretation Functions of Board Proceedings of Board Duties and responsibilities of directors Business judgment rule Reliance on information provided by others Responsibility for actions of delegatee Responsibility of a nominee director Prohibition against improper use of property, position, etc.

General duty to make disclosure Effect of other rules of law on duties of directors Interested director not to participate or vote Approval of company required for disposal by directors of company's undertaking or property Loans to director Prohibition of loans to persons connected with directors Prohibition of tax free payments to directors Payment to directors for loss of office, etc.

Transactions with directors, substantial shareholders or connected persons Exception to section Approvals for fees of directors Directors' service contracts Copy of contracts to be available for inspection Right of member to inspect and request copy Contract with sole member who is also a director Subdivision 4 Secretary Requirement for a secretary Appointment of a secretary Resignation of a secretary Disqualification to act as a secretary 1 A person shall be disqualified to act as a secretary if-- a he is an undischarged bankrupt; b he is convicted whether in or outside Malaysia of any offence referred to in section ; or c he ceases to be a holder of a practicing certificate issued by the Registrar under section Removal of a secretary Office of secretary shall not be left vacant Requirement to register with Registrar Prohibition to act in dual capacity For the purposes of this Division-- "approved accounting standards" has the meaning assigned to it in section 2 of the Financial Reporting Act [ Act ]; "subsidiary" except for section has the meaning assigned to it in the approved accounting standards issued by the Malaysian Accounting Standards Board established under the Financial Reporting Act Compliance with approved accounting standards Accounts to be kept System of internal control Accounting periods of companies within the same group Directors shall prepare financial statements General requirements for financial statements Subsidiaries to be included in consolidated financial statements Financial statements to be approved by the Board Directors shall prepare directors' report Contents of directors' report Relief from requirements as to form and content of financial statements and directors' report Power of Registrar to require a statement of valuation of assets Duty to circulate copies of financial statements and reports Time allowed for sending out copies of financial statements and reports Duty to lodge financial statements and reports with the Registrar Duty to lodge certificate relating to exempt private company Auditor's statements Subdivision 2 Auditors Definition of "outgoing auditor" Company auditors to be approved by Minister charged with responsibility for finance 1 Any person may apply to the Minister charged with the responsibility for finance to be approved as a company auditor for the purposes of this Act.

Company auditors Registration of firms of auditors Powers and duties of auditors Power of Registrar to appoint auditors of private company Term of office of auditors of private company Prevention by members of deemed re-appointment of auditor 1 An auditor of a private company shall not be deemed to be re-appointed under subsection 3 if the company has received notice under this section from members representing at least five per centum of the total voting rights of all members who would be entitled to vote on a resolution that the auditor should not be re-appointed.

Power of the Registrar to appoint auditors of public company Term of office of auditors of public company The auditor of a public company shall hold office in accordance with the terms of his appointment, provided that-- a he does not take office until the previous auditor has ceased to hold office unless he is the first auditor of the company, and b he ceased to hold office at the conclusion of the annual general meeting next following his appointment, unless he is re-appointed.

Fixing of auditor's remuneration 1 The remuneration of an auditor appointed- a by the members of a company shall be fixed by the members by ordinary resolution or in such manner as the members may determine; b by the Board shall be fixed by the Board and if not so fixed, by the company; or c by the Registrar shall be fixed either by the Registrar or the Board and if not so fixed, by the company. Obligation to furnish particulars of payment made to auditors Resolution to remove auditor from office Special notice required for resolution to remove auditor from office Notice to Registrar of resolution to remove auditor from office Procedure to appoint auditor by written resolution Procedure to appoint auditor at a meeting of members Resignation of auditor Notice of resignation of auditor to Registrar Rights of resigning auditor of a public company Duty to inform upon cessation of office If an auditor has made written representation to the company under subsection 3 or if an auditor gives notice to the directors of the company under subsection 1 , the auditor shall -- a submit a copy of the written representation or his statement of circumstances connected with his resignation to the Registrar; and b in the case of a company whose shares or debentures are quoted on a stock exchange, submit a copy of the statement of the stock exchange, within seven days from the submission of the written representation or his notice of resignation.

Attendance of auditors at general meetings where financial statements are laid Auditor and other person to enjoy qualified privilege in certain circumstances Duties of auditors to trustee for debenture holders Division 4 Indemnity and Insurance for Officers and Auditors Provisions indemnifying directors or officers Indemnity and insurance for officers and auditors Ordinary resolutions Special resolutions General rules on voting Votes by proxy Votes of joint holders of shares Right to object to a person's entitlement to vote Eligibility of members to receive written resolution Circulation date The circulation date of a written resolution shall be the date on which-- a copies of the written resolution are circulated to members; or b if copies are circulated to members on different days, to the first of those days.

Manner in which a written resolution to be circulated Circulation of written resolutions proposed by directors Members' power to require circulation of written resolution Expenses of circulation Unless the company resolves otherwise- a the expenses of the company in complying with section shall be paid by the members who requested the circulation of the statement; and b the company shall not be bound to comply with section unless there is deposited with or tendered to the company, not later than one week before the meeting, a sum reasonably sufficient to meet the company expenses in doing so.

Application not to circulate a member's written resolution Procedure for signifying agreement to written resolution Period for agreeing to written resolution Sending of documents relating to written resolutions by electronic means Unless otherwise provided in the constitution, a resolution shall be validly passed at a meeting of members if-- a notice of the meeting and of the resolution is given; and b the meeting is held and conducted, in accordance with the provisions of this Subdivision.

Power to convene meetings of members A meeting of members may be convened by-- a the Board; or b any member holding at least ten per centum of the issued share capital of a company or a lower percentage as specified in the constitution or if the company has no share capital, by at least five per centum in the number of the members. Power to require directors to convene meetings of members Directors' duty to call meetings required by members Power of members to convene meeting of members at company's expense Power of Court to order meeting Resolution passed at adjourned meeting Subdivision 4 Notice of Meetings Notice required for meetings of members Contents of notices of meetings of members Notice of adjourned meetings of members Manner in which notice to be given Notification of publication of notice of meeting on website Persons entitled to receive notice of meetings of members Resolution requiring special notice Power of members to require circulation of statements Director's duty to circulate members' statement Power of Court to order non-circulation of members' statement Sending documents relating to a meeting by electronic means Subdivision 5 Procedure at Meetings Meetings of members at two or more venues Quorum at meetings Chairperson of meetings of members 1 Subject to any provision of the constitution that states who shall be the chairperson, the chairman of the Board, if any, shall preside as the chairperson at every general meeting of the company.

Declaration by chairperson on a show of hands Right to demand a poll Voting on a poll Representation of corporations at meetings of members Subdivision 6 Proxies Appointment of proxies Notice of meetings of members to contain statement of rights to appoint proxies Proxy as a chairperson of a meeting of members Right of proxy to demand for a poll Termination of a person's authority to act as a proxy Subdivision 7 Class Meetings Application to class meetings Subdivision 9 Record of Resolutions and Meetings Records of resolutions and meetings Inspection of records of resolutions and meetings Records as evidence of resolutions Details of decisions provided by a sole member Division 6 Remedies Interpretation For the purposes of this Division, "complainant" means -- a a member of a company, or a person who is entitled to be registered as a member of a company; b a former member of a company if the application relates to the circumstances in which the member ceased to be a member; c any director of a company; or d the Registrar, in the case of a company declared under section Remedy in cases of an oppression Derivative proceedings Leave of Court Effect of ratification If members of a company, ratify or approve the conduct of the subject matter of the action-- a the ratification or approval does not prevent any person from bringing, intervening in or defending proceedings with the leave of the Court; b the application for leave or action brought or intervened in shall not be stayed or dismissed by reason only of the ratification or approval; and c the Court may take into account the ratification or approval in determining what order to make.

Powers of the Court In granting leave under this section and sections and , the Court may make such other orders as the Court thinks appropriate including an order-- a authorizing the complainant or any other person to control the conduct of the proceedings; b giving directions for the conduct of the proceedings; c for any person to provide assistance and information to the complainant, including to allow inspection of the company's books; d requiring the company to pay reasonable legal fees and disbursements incurred by the complainant in connection with the application or action, or pending the grant of the leave or pending the grant of any injunction by the Court hearing the application for leave under this section; or e the costs of the complainant, the company or any other person for proceedings taken under this section, including an order as to indemnity for costs.

Injunction Types of charges require registratio Registration of charges created over property outside Malaysia Registration of charges in series of debentures Duty of company to register charges existing on property acquired Register of charges to be kept by Registrar Endorsement of certificate of registration on debentures Assignment and variation of charge Satisfaction and release of property from charge Extension of time and rectification of register of charges Company to keep instruments of charges and register of charges Documents made out of Malaysia Application of this Subdivision to foreign company Subdivision 2 Arrangements and Reconstructions Interpretation In this Subdivision, unless the context otherwise requires -- "arrangement" includes a reorganization of the share capital of a company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both of these methods; "company" means any corporation or society liable to be wound up under this Act with the exception of section ; "transferee company" means -- a in section , a company to which the whole or any part of the undertaking or property of the transferor company is transferred to; and b in section , a company to which all of the shares or all of the shares in any particular class of the transferor company is transferred to; "transferor company" means -- a in section , a company which transfers the whole or any part of the undertaking or property of the company; and b in section , a company which transfers all of the shares or all of the shares in any particular class of the company.

Power of Court to order compromise or arrangement with creditors and members Power of Court to appoint an approved liquidator Power of Court to restrain proceedings Information as to compromise or arrangement with creditors and members Reconstruction and amalgamation of companies Right of offeror to buy out Subdivision 3 Receivers and Receivers and Managers Qualification for appointment of receiver or receiver and manager Disqualification for appointment as receiver or receiver and manager Subject to section , the following person shall not be qualified to act as a receiver or receiver and manager of the property of a company: a a corporation; b an undischarged bankrupt; and c a mortgagee of any property of the company, an auditor of the company or an officer of the company or any corporation which is a mortgagee of the property of the company.

Appointment of receiver or receiver and manager A receiver or receiver and manager may be appointed-- a under any instrument that confers on a debenture holder or charge holder the power to appoint a receiver or receiver and manager; b under any instrument that creates a charge in respect of property and undertaking of a company that confers on the charge holder the power to appoint a receiver or a receiver and manager; or c by the Court.

Appointment of receiver or receiver and manager under instrument Appointment of receiver or receiver and manager by Court Notice of appointment of receiver or receiver and manager Vacancy in office of receiver or receiver and manager Notice of cessation of office Statement relating to appointment of receiver or receiver and manager Liability of receiver or receiver and manager Liability for contract Power of receiver or receiver and manager Application to Court for directions Appointment of liquidator as receiver or receiver and manager in cases of winding up Powers of receiver or receiver and manager on liquidation Power of Court to fix remuneration of receiver or receiver and manager Provisions as to information if receiver or receiver and manager appointed Obligations of company and directors to provide information to receiver or receiver and manager Submission of statement of affairs Lodging of accounts of receiver or receiver and manager Payments of certain debts subject to floating charge in priority to claims under charge Division 8 Corporate Rescue Mechanism Interpretation For the purposes of this Division-- "nominee" means any person who is qualified to be appointed as an insolvency practitioner whose powers and duties shall include the powers and duties specified in the Seventh Schedule; "voluntary arrangement" means a composition in satisfaction of a company's debts or a scheme of arrangement of a company's affairs under Subdivision 1.

This Subdivision shall not apply to -- a a public company; b a company which is a licensed institution or an operator of a designated payment system regulated under the laws enforced by the Central Bank of Malaysia; c a company which is subject to the Capital Markets and Services Act ; and d a company which creates a charge over its property or any of its undertaking.

Persons who may propose voluntary arrangement Proposal for voluntary arrangement Moratorium Summoning of meetings Decisions of meetings Implementation of proposal Arrangements coming to an end prematurely Subdivision 2 Judicial Management Non-application of this Subdivision This Subdivision shall not apply to -- a a company which is a licensed institution or an operator of a designated payment system regulated under the laws enforced by the Central Bank of Malaysia; and b a company which is subject to the Capital Markets and Services Act Application to Court for a company to be placed under judicial management and for appointment of a judicial manager An application for an order that a company should be placed under a judicial management and for an appointment of a judicial manager may be made to the Court by the company or its creditor if the company or its creditor considers that-- a the company is or will be unable to pay its debts; and b there is a reasonable probability of rehabilitating the company or of preserving all or part of its business as a going concern or that otherwise the interests of creditors would be better served than by resorting to a winding up.

Power of Court to make a judicial management order and appoint a judicial manager Duration of judicial management order and its extension Nomination of judicial manager Notice of application for judicial management order Dismissal of application for judicial management order Subject to subsection 5 , the Court shall dismiss an application for a judicial management order if it is satisfied that-- a a receiver or receiver and manager referred to in subparagraph 1 b ii has been or will be appointed; and b the making of the order is opposed by a secured creditor.

Effect of application for a judicial management order During the period beginning with the making of an application for a judicial management order and ending with the making of such an order or the dismissal of the application-- a no resolution shall be passed or order made for the winding up of the company; b no steps shall be taken to enforce any charge on or security over the company's property or to repossess any goods in the company's possession under any hire purchase agreement, chattels leasing agreement or retention of title agreement, except with leave of the Court and subject to such terms as the Court may impose; and c no other proceedings and no execution or other legal process shall be commenced or continued and no distress may be levied against the company or its property except with leave of the Court and subject to such terms as the Court may impose.

Effect of judicial management order Notification that a company is under judicial management order Vacancy in appointment of judicial manager General powers and duties of judicial manager Power to deal with charged property, etc.

Agency and liability for contracts Vacation of office and release Information to be given by and to judicial manager Company's statement of affairs Statement of proposals Consideration of proposals by creditors' meeting Committee of creditors Duty to apply for discharge of judicial management order Protection of interests of creditors and members Undue preference in judicial management Delivery and seizure of property Duty to co-operate with judicial manager Inquiry into company's dealings, etc.

Application of provisions of winding up of a company under judicial management Modes of winding up Qualification of liquidator Government bound by certain provisions Subdivision 2 Contributories Liability as contributories of present and past members Nature of liability of contributory Contributories in the case of death of member Contributories in case of bankruptcy of member If a contributory becomes bankrupt or assigns his estate for the benefit of his creditors, either before or after the contributory has been placed on the list of contributories -- a his trustee shall represent him for all the purposes of the winding up and shall be a contributory accordingly; and b there may be proved against his estate the estimated value of his liability to future calls as well as calls already made.

Subdivision 3 Voluntary Winding Up Circumstances in which company may be wound up voluntarily Interim liquidators Date of commencement of winding up Effect of voluntary winding up Declaration of solvency Distinction between "members" and "creditors" voluntary winding up Power to fill vacancy in office of liquidator Duty of liquidator to call for creditors' meeting in case of insolvency Conversion to creditors' voluntary winding up As from the day on which the creditors' meeting is held under section , this Act has effect as if-- a the directors' declaration under section had not been made; and b the creditors' meeting and the company meeting at which it was resolved that the company be wound up voluntarily, and accordingly the winding up becomes a creditors' voluntary winding up.

Liquidators in creditors' voluntary winding up Property and proceedings Appointment or removal of liquidator by Court Remuneration of liquidators in voluntary winding up Act of liquidator valid, etc. Powers of liquidator in a voluntary winding up Annual meeting of members and creditors Final meeting and dissolution Arrangement binding on creditors Application to Court to have questions determined or powers exercised Costs Limitation on right to wind up voluntarily Subdivision 7 Winding Up by Court Petition of winding up Circumstances in which company may be wound up by Court Definition of "inability to pay debts" Commencement of winding up by the Court Payment of preliminary costs by petitioner Powers of Court on hearing petition for winding up Power of Court to stay or restrain proceedings against company prior to order of winding up Action or proceeding stayed after winding up order Avoidance of dispositions of property or certain attachment, etc.

Petition to be lis pendens Lodgement of winding up order Effect of winding up order Appointment, style, etc. Appointment of other person as liquidator other than Official Receiver Remuneration of liquidators in winding up by Court Control of approved liquidator by Official Receiver Control of Official Receiver by Minister Resignation or removal of liquidator in winding up by Court A liquidator or interim liquidator appointed by the Court may-- a resign from office in accordance with the rules; or b on cause shown, be removed from office by the Court.

Custody and vesting of company's property Submission of statement of affairs of company Report by liquidator 1 The liquidator shall, as soon as practicable from the receipt of the statement of affairs, submit a preliminary report to the Court-- a as to the amount of capital issued, subscribed and paid up and the estimated amount of assets and liabilities; b if the company has failed, as to the causes of the failure; and c whether in his opinion further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company or the conduct of the business thereof.

Powers of liquidator in winding up by Court Exercise and control of liquidator's powers Liquidator to pay moneys received into bank account Settlement of list of contributories and application of assets Release of liquidators and dissolution of company A liquidator may apply to the Court-- a for an order that he be released and that the company be dissolved, if he has -- i realised all the property of the company or so much as in his opinion can be realised without needlessly protracting the liquidation; ii distributed a final dividend, if any, to the creditors; iii adjusted the rights of the contributories among themselves; and iv made a final return, if any, to the contributories, or b for an order that he be released, if he has resigned or been removed from his office.

Orders of release or dissolution Power of Court to terminate winding up Matters relating to stay and termination of winding up Debts due by contributory to company and extent of set off Power of Court to make calls Payment of moneys due to company into named bank Order on contributory conclusive evidence Appointment of special manager Claims of creditors and distribution of assets Inspection of books and papers by creditors and contributories Power to summon persons connected with company Power to order public examination of promoters, directors, etc.

Power to arrest absconding contributory The Court at any time before or after making a winding up order, on proof of probable cause for believing that a contributory, director or former director of the company-- a is in hiding; b has absconded; c is about to leave Malaysia or otherwise to abscond; d is about to remove any of his property; or e is about to conceal any of his property, for the purpose of-- a evading payment of calls; b avoiding examination respecting the affairs of the company; or c avoiding, delaying or embarrassing proceedings in the winding up, may cause the contributory, director or former director to be arrested and his books and papers and movable personal property to be seized and safely kept until such time as the Court orders.

Delegation of powers of Court to liquidator Provision may be made by rules enabling or requiring all or any of the powers and duties conferred and imposed on the Court by this Division in respect of-- a the holding and conduct of meetings to ascertain the wishes of creditors and contributories; b the paying, delivery, conveyance, surrender or transfer of money, property, books or papers to the liquidator; c the making of calls and the adjusting of the rights of contributories; and d the fixing of a time within which debts and claims shall be proved, to be exercised or performed by the liquidator as an officer of the Court and subject to the control of the Court, but the liquidator shall not, without the special leave of the Court, rectify the register of members and shall not make any call without either the special leave of the Court or the sanction of the committee of inspection.

Powers of Court cumulative Unclaimed assets to be paid to receiver of revenue Books and papers to be kept by liquidator Control of Court over liquidators Delivery of property to liquidator Powers of Official Receiver where no committee of inspection Notice of appointment and address of liquidator Liquidator's accounts Liquidator to make good defaults Notification that a company is in liquidation Appeal against decision of liquidator Books and papers of company Expenses of winding up where assets insufficient Resolutions passed at adjourned meetings of creditors and contributories Meetings to ascertain wishes of creditors or contributories Special commission for receiving evidence Subdivision 2 Proof and Ranking of Claims Description of debts provable in winding up Rights and duties of secured creditors Rights and duties of unsecured creditors Mutual credit and set-off Priorities Effect of floating charge A floating charge on the undertaking or property of the company created within six months of-- a the presentation of the winding up petition in the case of winding up by Court; or b the passing of the resolution in the case of voluntary winding up, shall be invalid except to the amount of any cash paid to the company at the time of or subsequently to the creation of and in consideration for the charge together with interest or return on that amount at the rate of five per centum per annum unless it is proved that the company is solvent immediately after the creation of the charge.

Liquidator's right to recover in respect of certain sales to or by company Disclaimer of onerous property Interpretation For the purposes of sections and "bailiff" includes any officer charged with the execution of a writ or other process; "goods" includes all movable property.

Restriction of rights of creditor as to execution or attachment Duties of bailiff as to goods taken in execution Power of Court to declare dissolution of company void Subdivision 4 Offences Offences by officers of companies in liquidation Inducement to be appointed as liquidator, etc.

Liability where proper accounts not kept Responsibility for fraudulent trading Power of Court to assess damages against delinquent officers, etc.

Prosecution of delinquent officers and members of company Unregistered company Winding up of unregistered companies Contributories in winding up of unregistered company Power of Court to stay or restrain proceedings Outstanding assets of a dissolved unregistered company Notwithstanding any provision in this Act, the Registrar may strike a company off the register, if-- a the company is not carrying on business or is not in operation; b the company has contravened this Act; c the company is being used for unlawful purposes or any purpose prejudicial to or incompatible with peace, welfare, security, public interest, public order, good order or morality in Malaysia; d in any case where the company is being wound up and the Registrar has reasonable cause to believe that-- i no liquidator is acting; ii the affairs of the company are fully wound up and for a period of six months the liquidator has been in default in lodging any return required to be made by him; or iii the affairs of the company has been fully wound up under a winding up by the Court and there are no assets or the assets available are not sufficient to pay the costs of obtaining an order of the Court dissolving the company.

Application to strike off company Notice of intention to strike off company Objection to striking off