The Companies Commission of Malaysia has decided that the new Interest Schemes Act 2016 and the Companies Act 2016 will come into operational force on 31.1.2017. The regulatory framework will be implemented in stages. Below is the CCM Press Statement-
ANNOUNCEMENT ON THE ENFORCEMENT DATE OF COMPANIES ACT 2016
The Companies Commission of Malaysia (SSM) hereby notifies that the Companies Act 2016 (CA 2016) will be implemented on staggered basis with the first phase to be effective from 31 January 2017. With the enforcement of the first phase of the CA 2016, the Companies Act 1965 is repealed.
2.Several provisions in the CA 2016 which have yet to be effective are as follows:
(a)Section 241 – provision relating to the requirement for company secretaries to register with Registrar; and
(b)Division 8 of Part III – provisions relating to corporate rescue mechanisms on corporate voluntary arrangement and judicial management.
3.With the effective of the enforcement date, SSM would like to draw your attention to the following:
(a)Introduction of single member/director company
Beginning from the date the CA 2016 becomes effective, a company may be incorporated by or have only one member and that single member can also be the sole director of the company. However, for public companies, the CA 2016 still retains the minimum requirement of 2 directors.
(b)Change of “certificate of registration” to “notice of registration”
Effective from the enforcement of the CA 2016, SSM will issue a notice of registration for the incorporation of a new company to confirm that provisions relating to the requirements for registration have been complied with in line with the requirement of the law.
(c)Abolition of the authorized capital concept
Under the CA 2016, a company is no longer required to state its authorized capital. Instead, a company is required to notify its issued share capital and paid up capital and the related changes through the return of allotments.
(d)Abolition of concept of shares with nominal value
With effect from 31 January 2017, any newly issued share will no longer be tied with the nominal value when the company was incorporated. A company may issue shares at a price depending on the factors affecting the current circumstances and needs of the company.
(e)Companies are no longer required to have constitution or memorandum & articles of association
For a company which is incorporated beginning from 31 January 2017, the company has the option whether to adopt a constitution or otherwise. For a company which was incorporated before the CA 2016 came into effect, the existing constitution (memorandum & articles of association) will continue to be applicable to such companies until the companies resolve otherwise. However, it is still mandatory for a company limited by guarantee to have a constitution.
(f)Companies are not required to have a common seal
Effective from 31 January 2017, a company has the option to have a common seal. Execution of documents must comply with the procedures outlined under Division 9 of Part II including situations when a company decides to have a common seal.
(g)Abolition of the requirement for annual general meeting for private companies
Beginning from 31 January 2017, all private companies are no longer required to hold annual general meetings. Instead all decisions of private companies can be fully made through circular resolutions.
(h)Decoupling of lodgement of Annual Return and Financial Statements
Under the CA 2016, the requirement to lodge Annual Returns is based on the anniversary of the incorporation of a company, and the date for the lodgement of Financial Statements is no later than 7 months from the financial year end of the company.
4.SSM seeks the cooperation of YBhg. Tan Sri/Datuk/Dato’/Datin/Tuan/Puan to take into account of the changes stated above when reviewing, formulating or implementing policies and procedures which may affect companies when dealing with your Ministry/Department/Agency/Organisation. This is to ensure that the business friendly policies which are contained in the CA 2016 can be implemented efficiently and the benefits could be enjoyed by the business community in general.
5.Apart from the CA 2016, SSM will also enforce the Interest Schemes Act 2016 effective from 31 January 2017. The Interest Schemes Act regulates the offering of interest schemes as an alternative to fundraising activities for companies. The provisions in the Interest Schemes Act were previously contained in the Companies Act 1965.