TUTORIAL 1: LEGAL FRAMEWORK

QUESTION 1
1. Incorporation and Registration: CCM oversees the incorporation and registration of
companies in Malaysia, ensuring compliance with relevant laws and regulations.
2. Compliance Monitoring: CCM monitors and enforces compliance with company laws and
regulations, including annual filing requirements, to ensure companies operate within
legal boundaries.
3. Corporate Governance Oversight: CCM promotes good corporate governance practices
among registered companies to enhance transparency, accountability, and investor
confidence.
4. Regulatory Guidance and Education: CCM provides guidance, assistance, and
educational resources to companies and stakeholders to facilitate understanding and
compliance with regulatory requirements.

QUESTION 2
1. Companies Act 2016: CCM administers and enforces the Companies Act 2016, which
governs the establishment, operation, and dissolution of companies in Malaysia.
2. Limited Liability Partnerships Act 2012: CCM is responsible for administering and
enforcing this act, which regulates the formation and operation of limited liability
partnerships in Malaysia

QUESTION 3
The main function of the Securities Commission is to regulate and supervise the securities and
capital markets in Malaysia to ensure investor protection, market integrity, and the orderly
functioning of the capital market

QUESTION 4
1. Licensing and Registration: SC oversees the licensing and registration of market
participants such as stockbrokers, fund managers, and investment advisers.
2. Market Surveillance: SC monitors the securities market for compliance with regulations,
detects market abuses, and ensures fair and orderly trading.
3. Enforcement: SC takes enforcement actions against violations of securities laws and
regulations to maintain market integrity and investor confidence.
4. Investor Protection: SC implements measures to protect investors' interests, including
disclosure requirements, investor education, and dispute resolution mechanisms.

QUESTION 5
Bursa Malaysia is the main stock exchange in Malaysia. Its primary function is to provide a
platform for trading securities such as stocks, bonds, and derivatives, facilitating the efficient
buying and selling of financial instruments.
QUESTION 6
Bank Negara Malaysia is the central bank of Malaysia. It is responsible for formulating and
implementing monetary policies to maintain price stability and promote sustainable economic
growth.

QUESTION 7
1. Monetary Policy Formulation: Bank Negara Malaysia formulates and implements
monetary policies to regulate the supply of money and credit in the economy to achieve
macroeconomic objectives such as price stability and full employment.
2. Financial Supervision and Regulation: Bank Negara Malaysia regulates and supervises
financial institutions to ensure stability, soundness, and integrity of the financial system.
3. Currency Issuance and Management: Bank Negara Malaysia is responsible for issuing
and managing the Malaysian currency, ensuring its availability, security, and integrity.
TUTORIAL: COMPANY SECRETARY
QUESTION 1
a) According to Section 235, the Act states that a person cannot act as a secretary of a
company unless he/she is a member of a body as set out in the Fourth Schedule of the
Act. Thus, Lina Surihani can pursue professional examinations offered by the Malaysian
Association of Company Secretaries (MACS). These exams will allow her to gain the
necessary qualifications without requiring further formal education.

b) Outline the procedures that Lina Surihani should follow in order to become a company
secretary in Malaysia. To become a company secretary in Malaysia, Lina Surihani, with a
Diploma in Accounting, can follow specific procedures outlined by the Companies
Commission of Malaysia (SSM). Firstly, she needs to ensure she meets the eligibility
criteria, which include being 18 years of age or older, a citizen or permanent resident of
Malaysia, and a member of a prescribed professional body as set out in the Fourth
Schedule of the Companies Act 2016. Secondly, she must consent in writing to be
appointed as a secretary, be qualified under the specified regulations, and not be
disqualified under relevant sections of the law.

Next, Lina should gather the necessary documents for the application, which typically
include an application form for a Company Secretary's License, a photocopy of her NRIC
or identity card, a recent passport size photograph, certificates related to her academic
qualifications, documents showcasing her working experience in secretarial practice, a
referral letter from an employer or contact person from the past five years, and the
processing fee of RM350.00.

After preparing these documents, Lina should lodge them with the Companies
Commission of Malaysia (SSM) for the application process. By following these steps,
Lina can initiate the process of becoming a company secretary in Malaysia, leveraging
her existing qualifications and experience in accounting to pursue this career path
without the need for further formal education.

QUESTION 2
If Yusof, one of the company secretaries at Maju Berhad, fails to renew his company
secretary's license after it expires on March 25, 2021, it would have significant
implications. In Malaysia, company secretaries play a crucial role in ensuring compliance
with legal and regulatory requirements. Failure to renew the license would render Yusof
ineligible to act as a company secretary, leading to legal non-compliance for Maju
Berhad. This could result in penalties, fines, or even legal action against the company for
operating without a qualified company secretary. Additionally, the company's ability to
fulfil its statutory obligations, such as filing necessary documents with regulatory
authorities, could be compromised, potentially affecting its reputation and standing in the
business community.
 QUESTION 3
Mr. Roy, who is currently the company secretary of Ceria Sdn Bhd and later appointed
as a director of the company, can sign documents on behalf of the company under
certain conditions. According to the Companies Act 2006, a company can sign
documents in different ways. If Mr. Roy is the sole director and secretary, he can sign
documents on behalf of the company. However, if there are two directors, it is required
that two authorized signatories sign the document, which can include a director and a
company secretary. In the case of a sole director, that director can sign the document. It
is crucial to ensure that Mr. Roy has the express or implied authority to sign on behalf of
the company, and it is advisable to follow the proper procedures outlined in the Act to
ensure the validity and enforceability of the documents.

QUESTION 4
a) ECS Sdn. Bhd. is a corporate secretarial agency that provides secretarial services. One
of their clients, ScoopBDu Sdn Bhd, has expressed dissatisfaction with the services
provided by Sanju Sanjay, a company secretary from ECS Sdn Bhd. The client has
demanded that Sanju be removed and a new corporate secretary be appointed in his
place. In response to this, ECS Sdn Bhd should advise ScoopBDu Sdn Bhd about the
processes for removing and replacing a corporate secretary.

According to the Companies Act 2016, every company must appoint at least one or more
company secretaries, each of whom must be a natural person of full age and a citizen or
permanent resident of Malaysia who ordinarily resides in Malaysia. To remove a
company secretary, the company must follow the rules set out in the Companies Act
2016 and the company's articles of association. The directors of the company have the
authority to approve the removal of a company secretary, unless the articles of
association state otherwise.

To remove a company secretary, the board of directors should pass a resolution to

remove the secretary, which should be recorded in the minutes of the meeting. A copy of
these minutes should be kept at the company's registered office address or Single
Alternative Inspection Location (SAIL). If the decision is taken by written board
resolution, the company must also retain a copy of the resolution at its registered office
or SAIL address for a minimum period of 10 years and circulate a copy to every director.

Once the existing company secretary has been removed, the company can appoint a
new secretary. The appointment of the first secretary shall be made within thirty days
from the date of incorporation of the company. The Board shall appoint a secretary and
determine the terms and conditions of such an appointment. To appoint a new company
secretary, the company should locate a licensed company secretary who is qualified to
perform their duties.
b) Ramli, the company secretary in charge of Sri Mewah Sdn Bhd's file, can resign as a
company secretary under Section 237 of the Companies Act 2016. Section 237(1) of the
Act states that a secretary may resign from his office by giving notice to the board of
directors of the company. The resignation will take effect upon the expiry of thirty days
from the date of the notice lodged or the period specified in the constitution or the terms
of appointment, as the case may be. If Ramli decides to resign, he should follow the
procedures outlined in Section 237 to ensure a smooth transition. He may lodge a copy
of the notice accompanied by a declaration in the Appendix to the Registrar if he is of the
view that his resignation may not be notified to the Registrar. The secretary is no longer
allowed to lodge any document on behalf of the company or the directors after he
ceases to be the secretary of the company

If the resigning secretary is the only secretary, the appointment of a new secretary must
be effected within thirty (30) days from the day the office of the secretary becomes
vacant to comply with the requirement under Section 240 of the Companies Act 2016 [1].
In the case where there is no update made by the company pursuant to Section 58 of
the Companies Act 2016, the secretary's name will still remain in the register and be
reflected in the corporate profile of the company. However, if the secretary has lodged a
copy of the resignation notice of the registrar, it will be made available to any person
upon payment of the prescribed fee.
TUTORIAL 5
QUESTION 1
1. The name and address of each member of the company.
2. The date on which each person registered as a member.
3. The date on which each person ceased to be a member.
4. The number of shares held by each member and the amount paid or agreed to be paid
on the shares of each member.

QUESTION 2
Company Limited by Guarantee is a type of public company designed primarily for non-profit
organisations. Here are the main characteristics of a CLBG:

1. Liability: The liability of its members is limited by the company's constitution to an amount the
members agree to contribute to the company's assets if it is wound up.
2. Non-profit Nature: It is set up to serve social, charitable, community-based, or other
non-commercial objectives. Instead of distributing profits to members, any surplus income is
typically reinvested or used to promote the non-profit objectives of the business.
3. No Share Capital: A CLBG does not have shareholders or share capital. It has guarantors,
often called'members', whose personal liability is limited to their 'guarantee', an amount they
agree to contribute towards the company's liabilities.
4. Voting Rights: Each member of a CLBG is usually entitled to one vote, regardless of the
amount they have guaranteed.

QUESTION 2
a) Encik Salim, when choosing a name for your private limited company, it's important to
follow the guidelines set by the Suruhanjaya Syarikat Malaysia (SSM). The name should
not be identical to an existing business entity, should not be undesirable or
unacceptable, and must not copy trademarks or suggest any connection with
government agencies, among other restrictions . Using the name ‘Adidas Nike Etc
Trading’ could potentially violate trademark laws, as 'Adidas' and 'Nike' are established
brand names with trademark protection. It is advisable to choose a unique name that
reflects your business without risking infringement or being deemed undesirable by the
Registrar.
 b) Circumstances for Audit Exemption:

A private company may be exempted from lodging its annual audited accounts with the
Companies Commission of Malaysia (CCM) under certain conditions. According to
Practice Directive No. 3/2017, private companies that qualify for audit exemption include:

1. Dormant Companies: These are companies that have been inactive since they
were formed or throughout the current and previous financial years. They haven't
been doing any business.
2. Zero-Revenue Companies: These companies haven't earned any money, and their
total assets (the value of everything they own) have stayed below RM300,000 for
the past two financial years.
3. Threshold-Qualified Companies: These companies meet certain criteria:
● They haven't made more than RM100,000 in revenue (money earned from sales)
in the past two financial years.
● Their total assets haven't exceeded RM300,000 during the same period.
● They have no more than 5 full-time employees.

QUESTION 3
a) Difference Between a Company Limited by Guarantee and a Company Limited by Shares:

Company Limited by Guarantee Company Limited by Shares

Purpose: A CLBG is typically established for A company limited by shares is usually aimed
non-profit purposes such as cultural, at profit-making and distributes profits to
charitable, or community projects, where any shareholders in the form of dividends.
profits are reinvested back into the company
to further its objectives.

Ownership and Control: In a CLBG, control lies A company limited by shares owned by
with the members (guarantors), who agree to shareholders, whose control is proportional to
contribute a predetermined amount towards the number of shares they hold.
the company's liabilities if it is wound up.

Financial Liability: Members of a CLBG are Shareholders of a company limited by shares

only liable up to the amount they have are liable up to the nominal value of their
guaranteed. shares.

Profit Distribution: CLBGs do not distribute Companies limited by shares distribute

profits to members. profits to shareholders based on the number
of shares owned.
b) General Rules to Incorporate a Company Limited by Guarantee under the Companies Act
2016:

1. Application: An application must be lodged with the Registrar along with a constitution.

2. Purpose: The CLBG must be formed for non-profit objectives such as promoting art, science,
religion, charity, education, or any other community beneficial objectives.

3. Promoters and Directors: The founder members or directors must be fit and proper persons
and not disqualified under the Companies Act 2016.

4. Approval for Certain Entities: If a ministry, government agency, or authority intends to

incorporate a CLBG, an approval letter from the respective body is required.

5. Company Secretary: It is advisable for the incorporation process to be carried out through a
company secretary, and a company secretary must be appointed within 30 days after the
incorporation of the company.

QUESTION 4
A Certificate of Incorporation (COI) is a legal document issued by the Companies Commission
of Malaysia (CCM) once a company's registration process is complete. It signifies that the
company has been officially incorporated and is recognised as a legal entity. Effects after
incorporation include:

The effects after incorporation include:

1. Separate Legal Entity: The company becomes a separate legal entity from its owners,
meaning it can own property, incur liabilities, sue, or be sued in its own name.
2. Limited Liability: Shareholders' liability is limited to the amount they have invested in the
company. They are not personally liable for the company's debts and obligations.
3. Perpetual Succession: The company continues to exist even if the membership changes or
the original members pass away, until it is dissolved according to the law or struck off the
register by the CCM.
4. Ability to Own Assets: The company can own assets in its own name, separate from its
shareholders.
QUESTION 5
Madam Siti and Mr. Abu wish to name their private company "Sarawak Malaysia Tourism
Company." According to the Companies Act 2016, the name must comply with certain
requirements:

1. The name must not be identical or similar to the name of any existing registered
company.
2. It should not copy any trademarks or intellectual property rights.
3. The name should not be offensive, deceptive, or against public policy.
4. It must not contain any sensitive or restricted words without proper approval or
authorization.

Given this, Madam Siti and Mr. Abu should conduct a name search with the Companies
Commission of Malaysia (CCM) to ensure that "Sarawak Malaysia Tourism Company" is
available for registration and does not violate any of the aforementioned criteria. If the name is
available and compliant, they can proceed with registering it for their company.

QUESTION 6

A statutory meeting is required for a public company, not a private company. A public company
must convene a statutory meeting within a prescribed period after incorporation, usually within a
period of not less than one month and not more than three months from the date of
incorporation. The purpose of the statutory meeting is to:

1. Lay before the members the company's statutory report, which includes the company's
financial statements, directors' report, and auditors' report.
2. Provide an opportunity for members to ask questions and discuss matters related to the
company's formation and initial operations.

Private companies are not required to hold statutory meetings under the Companies Act 2016.