Companies Act 1965 & 2016

Minimum requirement

1965: minimum two resident directors.

2016:
 Companies can be incorporated and operated with a single individual or corporate
shareholder and only one resident director is required (who can also be the sole
shareholder of the company).
 public company must have two directors

Documents required for registration

1965:

 statutory declaration by each promoter/director

 memorandum & articles of Association
 declaration by the First Secretary
 payment of registration fee in accordance with the authorised capital
2016:

 statement of compliance by each promoter/director giving prescribed particulars

 statement of consent & non-disqualification to act

 payment of registration fee which is determined by the Registrar

On registration

1965:

 the incorporation of a company is certified by the Registrar under his hand and
seal in the certificate of incorporation 
2016:

 the Memorandum shall contain share capital clause

 notice of registration issued by the Registrar is conclusive evidence of incorporation
 certificate of incorporation is issued upon application
 no constitution required and no authorised capital requirement
Company secretary

1965: appointment of secretary is required.

2016:

 appointment of secretary at point of incorporation is optional.

 secretary must be appointed within 30 days after incorporation.

Capacity of company

1965:

 the object clause of a company defines a company's capacity to carry out

commercial activities in its Memorandum of Association.
 any acts or actions outside its object clause are beyond the company's legal power
or authority (i.e. ultra vires).
 powers of a company are defined in the Third Schedule。
2016:

 a company may choose not to specify its objects.

 unlimited capacity for company. The company can carry on any lawful business
or activity together with full rights, powers and privileges unless the
constitution provides otherwise.
 removes the burden on third parties to verify if a company has capacity to enter into a
transaction.

Memorandum and Articles of Association

1965: compulsory for incorporation

2016:

 replaced by a constitution.

 constitution is optional

 may adopt after incorporation

  If a company has no constitution, the rights, powers, duties and obligations is as
set out in the new CA.

 Existing companies with Memorandum & Articles of Association will be deemed

to have constitutions.

Incorporation of company CA2016

- Easier incorporation of companies
- The Act will introduce the ability to incorporate a company with one individual
being the single shareholder and single director.
- Makes incorporating a company more attractive for businessman,
entrepreneurs and the businesses.
- A single individual can have complete control of the company, and still enjoy
the separate liability of the corporate entity.

Memorandum and articles of associations

- Under the companies Act 1965, a memorandum and articles or associations
(“M&A) is required for a company to be incorporated.
- Under the CA2016, the M&A is replaced by Constitution

Dividends
- CA 1965 states a company can only declare dividends out of its profits
- CA 2016, a company is able to declare and distribute dividends to the
shareholders out of profits of the company available if the company is solvent.

Fine and jail term

- The new Act (CA2016) imposes heavier fines and longer jail term on directors
for breach of directors’ duties and the law.

New Act adopts no par value regime

- All amounts credited to the share premium account and CCR account will
become part of the company’s share capital.

Annual general meetings (AGM) are no longer required for private companies

- Despite audited financial statement (AFS) is no longer put before the AGM, it must be
circulated to members within 6 months of financial year end and lodged with the SSM within
30 days of circulation to members.
Types of CLBG under Companies Act
2016: CLBG with word “Berhad” or “Bhd”
1965: CLBG is given a license by the minister to drop the word “Berhad” from its
name (under section 24
Add onto CLBG that can be formed
2016: promoting charity