Companies Act 2016 of Malaysia changes:

1:33 PM

    Companies Act 2016 Changes:

    1. Single individual shareholder allowed (previously at least 2)
    2. Single Director allowed (previously at least 2)
    3. Memorandum and Articles of Association, Share certificate, Common Seal and AGM is now optional. (previously mandatory)
    4. Secretary can be appointed 30days after incorporation (previously must appoint before incorporation)
    5. No more par value of shares and share premium account, if new shares issued at a premium, all proceeds go directly into share capital account.
    6. Directors' liability limit reduced from max 7 years to max 5 years but penalties limit increased from max RM250k to max RM3million.
    7. Directors need shareholders approval on all substantial transactions, directors fees, benefits and related party transactions. (Previously only disclosed in audited report after RPT happened, now need shareholders consent before it takes place)
    8. Company cannot provide loan/guarantee to directors (Previously can give loan but subject to deemed interest on tax treatment)
    9. Company cannot provide tax-free payment to directors (Previouly if company pays for directors' personal tax, the payment will be add back under Company's tax computation)

    In short, the new Companies Act 2016 simplify things up for small companies, increase protection for shareholders and increase Director's duty and liability.

    Please note that if your company incorporated under Companies Act 1965 and has Memorandum and Articles of Association, you still need to refer on it on your shareholders' rights and Directors' duties as it is still a valid constitution for your company.

    Please update me if anything worth mentioning is missed out and if I made any mistake on the information.

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