MACS MALAYSIAN COMPANY SECRETARIES CONFERENCE 2016
   
 
Plenary 1 : The Companies Bill 2015 & Interest Scheme Bill 2015 >>
Plenary 2 : The Role of the Company Secretary as the Chief Governance Officer – The India Experience >>
Labuan IBFC – The Solution for Growing Asian Businesses in the Changing Global Tax Landscape >>
Plenary 3 : Updates from Bursa Malaysia – Amendments to the Listing Requirements Relating to Disclosure, Corporate Governance and Other Consequential Changes >>
View Conference Video >>
  (click on the above link to view more)
   
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  Plenary 1 : The Companies Bill 2015 & Interest Scheme Bill 2015
  (Questions & Answers)
   
 
1.
Q :
Has SSM fixed the date of implementing the new Companies Act?
A :
The Companies Act 2016 is targeted to be implemented in the first quarter of year 2017.
2.
Q :
Is it true that all submissions will be fully online when the new Companies Act takes effect?
A :
As the Companies Act 2016 will be implemented phase by phase, we are still analyzing and considering the best mechanism.
3.
Q :
Is it true that when the new Companies Act takes effect, anyone can be appointed as a Company Secretary as long as he/she is a director of the Company?
A :
A Company Secretary must still fulfill the qualification under section 235(2) of the Companies Act 2016.
 
4.
Q :
Must companies amend their M&A when the new Act takes effect?
A :
The memorandum and article of association of an existing company in force and operative prior to the commencement of the Companies Act 2016 shall still have effect unless otherwise resolve by the company – section 619(3) of the Companies Act 2016.
 
5.
Q :
How long (no of years) must the contracts for directors be kept for inspection purpose?
A :
The question is too general.
If the question is actually referring to director’s service contract, the copies of the contract shall be made available for inspection for at least one year from the date of termination or expiry of the contract – section 232(3) of the Companies Act 2016.
 
6.
Q :
Shareholders' activism - even after special resolution is passed, who decides what is "in the best interest of the company"? If shareholders can pass a special resolution, isn't it up to them to decide the best interest of the company? Can the directors override the shareholders?
A :
In the situation where ‘the best interest of the company’ is disputed, parties may resort to court to decide.
 
7.
Q :
Currently Table A provides a quorum of TWO for a General Meeting. What is the provision in the new Companies Act. Does it has a specific percentage to observe?
A :
In the case of a company having only one member, one member personally present at a meeting shall constitute a quorum. In any other case, two member personally present at a meeting or by proxy shall be a quorum unless a higher number is specified in the constitution – section 328(1)&(2) of the Companies Act 2016.
 
8.
Q :
If the private company financial year end is 31 Dec, does the six months under S 169 applicable to determine the date for circulation of Financial Statements?
A :
Yes. However, do take note that the Registrar may, if he thinks fit to do so for any special reason, on application of the company, extend the period of six months – section 169(2) of the Companies Act 1965.
 
9.
Q :
For private Co, if meeting of members is to be conducted, the new act stated "other than passing Special Resolution" not less than 14 days notice but the Act is silent for passing Special Resolution. How many days required for notice for passing Special Resolution?
 
A :
Not less than 21 days – section 292(1) of the Companies Act 2016.
   
10.
Q :
Is the trustee of IS must be approved by the SSM?
 
A :
Under the Companies Act 1965, trustee must get an approval from Minister. However under section 22(2) of the Interest Scheme Act 2016, the appointment of a trustee is subject to the approval of the Registrar.
   
11.
Q :
Under CCA2016, execution of all documents require 2 authorised signatories including a Director. What about documents which previously do not require ad fixation of common seal eg. Invoices and letters? Does it require 2 signatories?
 
A :
A document or proceeding requiring authentication by a company may be signed by an authorized officer - section 66(4) of the Companies Act 2016.
   
12.
Q :
Notice for passing Special Resolution for private Co. How many days required?
A :
Not less than 21 days – section 292(1) of the Companies Act 2016.
 
13.
Q :
Does CCM foresee any dispute in interpreting whether members recommendation to management are in the 'best interest of the company' or 'frivolous or vexatious'?
A :
In the situation where the interpretation of ‘the best interest of the company’ or 'frivolous or vexatious' is disputed, parties may resort to court to decide.
 
14.
Q :
Moving forward how do we deal with non cumulativenon convertible redeemable preference shares especially if the company does not have cash to redeem the shares.
 
A :
May refer to section 618(3) of the Companies Act 2016.
   
15.
Q :
What happen if a single director passed away?
 
A :
Refer to section 209(3) and (5) the Companies Act 2016.
   
16.
Q :
Non trade, other receivables > 10% of shareholders funds constitute provision of financial assistance?
 
A :
The question is unclear.
However, please refer to section 126(2)(c) of the Companies Act 2016.
   
17.
Q :
Written resolution is only applicable to private companies - is this applicable for general meetings only or also for board meetings?
 
A :
Except resolution to remove a director or auditor before the expiration of his term of office, a resolution shall be proposed as a written resolution by the Board or any member of a private company - section 297 of the Companies Act 2016.
 
18.
Q :
Since all submissions are online, can we expect to experience heavy traffic when submitting documents or is SSM well prepared to handle traffic flow?
 
A :
Although we are trying our best to be prepared and ensure convenience in documents submission process, we do not dismiss that possibility.
   
19.
Q :
Moving forward upon expiry of the interim period how can we deal with non cumulitivenon convertible redeemable preference shares if the company does not have cash to redeem.
What happens to the shares and what is the right of the shareholder.
 
A :
May refer to section 618(3) of the Companies Act 2016.
   
20.
Q :
With the no par value coming in,what will happen to all premium paid? Should the premium be converted to shares?
 
A :
May refer to section 618(3) of the Companies Act 2016.
   
21.
Q :
Who can act as the trustee of an Interest Scheme?
 
A :
Please refer to section 87(1) & (2) of the Companies Act 1965.
Moving forward, please refer to criteria under section 23of the Interest Scheme Act 2016.
   
22.
Q :
Can SSM link with Insolvency Department to block bankrupt person to be appointed as directors when key in the Super form?
A :
SSM will consider this proposal, subject to mutual agreement between both parties.
     
23.
Q :
It appears that company secretary is assuming bigger liability under the new act. How do we ensure or measures to be taken that company secretary is protected if shareholders or directors were to exercise their discretion arbitrarily or information that are provided by directors/shareholders are not accurate or incorrect.
A :
Company secretary shall carry their responsibilities in due care and diligence.
     
24.
Q :
In view of the new Companies Act 2016, will there be further amendments to the Listing Requirements e.g. on the Articles of Association/Constitution of PLC?
A :
Listing Requirements is under Bursa’s purview. However, SSM believe that there may be consequential amendments to the Listing Requirements. Bursa will be the best Authority to answer this question.
     
25.
Q :
Under the new Companies Act 2016 it is required to disclose the Business Review in the Directors’ Report of the Financial Statements. As similar disclosures are required by Bursa in the Management Discussion and Analysis (MD&A), is it sufficient to make reference to the Directors Report? Is separate disclosure required?
A :
The content of the business review must be in accordance with Part II of Fifth Schedule of the Companies Act 2016 and separate disclosure is required.
     
26.
Q :
Under the Malaysia Companies Act 2016, penalty for non compliance of some provisions in law eg fiduciary duties is not exceeding RM3m or 5 years imprisonment. What is maximum penalty in India for officers of company for non compliance?
A :
The question is too general.
We assume that the question is referring to contravention of section 213 of the Companies Act 2016 regarding duties and responsibilities of directors.
Maximum penalty for contravention of provision related to duties of directors under Indian Companies Act 2013 is fine not less than one lakh rupees not exceeding five lakh rupees.
     
     
 
The Secretariat
Unit A608, Block A, Tkt. 6,
Kelana Square,
No 17, Jalan SS7/26, Kelana Jaya,
47301 Petaling Jaya
Selangor Darul Ehsan
   
Phone : + 603-7806 3755
  : + 603-7806 1023
Fax : + 603-7806 3625
Email : macs@macs.org.my