SSM Licensed Secretary cheat sheet

Companies Act 2016 (Malaysia) replaced the Companies Act 1965 and took effect 31 January 2017; it abolished the par value regime, the authorised share capital concept, and the memorandum of association.

Company types under CA 2016: private company (Sdn Bhd), public company (Bhd), foreign company, and unlimited company; a company may be limited by shares, limited by guarantee, or unlimited.

Private company restrictions: no more than 50 members (joint holders counted as one), restricts share transfer, prohibits invitation to the public to subscribe for shares or debentures.

A company comes into existence on the date of incorporation stated in the notice of registration issued by the Registrar; the certificate of incorporation is conclusive evidence of registration.

Single-member private companies are permitted; the sole member may be an individual or a body corporate, and the company must record the single-member status in the register.

Company secretary must be appointed within 30 days of incorporation; the secretary must be a member of a prescribed body (e.g., MAICSA, MIA, BAR) or a licensed secretary under the Companies Commission.

Directors: private company minimum one director ordinarily resident in Malaysia; public company minimum two directors, at least two ordinarily resident in Malaysia; age minimum 18.

Statutory registers and records must be kept at the registered office (or other Registrar-approved place): register of members, directors, secretaries, charges, and minutes; inspection rights for members apply.

Lodgement deadlines with the Registrar (CCM): notice of change of directors/secretaries within 14 days; change of registered office within 14 days; annual return within 30 days of the anniversary of incorporation.

Annual return must be lodged with the Registrar within 30 days of the anniversary of the company's incorporation date, accompanied by the prescribed fee; failure is an offence with daily default penalties.

Statutory meeting and statutory report requirements under CA 2016 apply only to public companies; the statutory report must be lodged and the meeting held within the prescribed period (not less than one month and not more than three months after the date the company is entitled to commence business).

Annual general meeting (AGM): public company must hold AGM within 6 months of financial year end and not more than 15 months after the previous AGM; private companies are not required to hold AGM under CA 2016.

Notice of meeting: at least 14 days' notice for private companies; 21 days for public companies; contents must include date, time, place, agenda, and right to appoint proxy.

Quorum: unless the constitution provides otherwise, two members present in person or by proxy constitute a quorum at a general meeting; for a single-member company, one member constitutes quorum.

Written resolutions: private companies may pass members' resolutions in writing; must be signed by all members entitled to vote (or such majority as the constitution allows); effective on the date the last member signs.

Minutes of general meetings must be entered in the minutes book within 14 days of the meeting; minutes of directors' meetings within 14 days; kept at the registered office and open to member inspection.

Directors' statutory duties under CA 2016 s.213: act in good faith in the best interests of the company, exercise powers for a proper purpose, avoid conflicts of interest, and exercise reasonable care, skill and diligence.

Business judgment rule: a director is not liable for a decision made in good faith, on an informed basis, and in the honest belief it is in the company's best interests, provided no material personal interest exists.

Fiduciary duty prohibits secret profits; a director must account for any benefit derived from the office or from the use of company property or information.

Related-party transactions: a director with a material interest in a transaction must disclose the nature and extent of that interest at a board meeting; the interested director abstains from voting.

Loans to directors: a company may not make a loan to a director or a person connected with a director unless approved by members in general meeting (with limited exceptions, e.g., loans in the ordinary course of business for banks).

Malaysian Code on Corporate Governance (MCCG) applies on a 'comply or explain' basis for listed issuers; key principles cover board leadership, board effectiveness, remuneration, audit and risk, and stakeholder engagement.

Audit committee: listed issuers must have an audit committee of at least three members, all non-executive, with a majority (including the chairman) independent; at least one member must be financially literate.

Directors' liability: breach of duty may result in civil liability, disqualification, or criminal penalty; indemnity insurance for directors is permitted but cannot cover fraud, dishonesty, or wilful misconduct.

Share issuance: a company may issue shares of different classes with rights, privileges, and restrictions set out in the constitution; no par value under CA 2016, so shares are issued at a price determined by the board.

Pre-emptive rights: unless the constitution provides otherwise, existing members have a right of first refusal on new share issues in proportion to their holdings; a special resolution may disapply this right.

Dividends may only be paid out of profits available for distribution; a company may not pay a dividend if it would render the company unable to pay its debts as they fall due (solvency test under CA 2016 s.131).

Capital reduction: a company may reduce share capital by special resolution with solvency statement (private companies) or court confirmation (public companies), subject to creditor protection rules.

Financial assistance: a company may not give financial assistance for the acquisition of its own shares unless the prescribed procedure is followed (special resolution, solvency statement, and notice to creditors).

Debentures and charges: charges must be registered with the Registrar within 30 days of creation; failure renders the charge void against the liquidator and creditors.

Treasury shares: a company may hold or cancel repurchased shares; treasury shares carry no voting rights and no dividend rights while held by the company.

Share buy-back: a company may purchase its own shares out of profits or proceeds of a fresh issue, subject to the constitution and solvency requirements; the shares must be cancelled or held as treasury shares.

Capital maintenance doctrine: share capital is a creditor protection fund; it may not be returned to members except through permitted routes (dividend, capital reduction, buy-back, redemption, or winding up).

Issued share capital is the aggregate consideration received for shares issued; paid-up capital is the amount actually paid; uncalled capital remains a liability of the member.

Shares must be fully paid before allotment unless the constitution provides otherwise; calls on shares must comply with the constitution and give at least 14 days' notice.

Transfer of shares: private company shares are subject to restrictions in the constitution (board approval, pre-emption); transfers must be lodged with the company and registered within the prescribed period.

Transmission of shares on death or bankruptcy: the personal representative or trustee in bankruptcy may be registered as holder on producing the prescribed evidence; they are entitled to the same dividends and rights as the deceased member.

Class rights: variation of class rights requires the consent of 75% of the holders of that class or a special resolution passed at a separate class meeting.

Lien on shares: a company may have a lien on shares for unpaid calls if the constitution so provides; the lien must be enforced by notice and sale in accordance with the constitution.

Share certificates: must be issued within 60 days of allotment or transfer; a duplicate certificate may be issued on the prescribed indemnity and fee.

Winding up routes: members' voluntary winding up (solvent, declaration of solvency required), creditors' voluntary winding up (insolvent), and compulsory winding up by court order.

Grounds for compulsory winding up include inability to pay debts (statutory demand unpaid for 21 days), just and equitable ground, and default in lodging statutory reports.

Statutory demand: a creditor may serve a demand for a debt exceeding the prescribed amount; if unpaid or not disputed within 21 days, the company is deemed unable to pay its debts.

Liquidator's powers: to collect assets, realise property, compromise claims, and distribute surplus to members after paying creditors in the statutory priority order.

Priority of claims in liquidation: secured creditors (out of security), preferential debts (wages, statutory contributions, taxes), unsecured creditors, then members.

Corporate rescue mechanisms: judicial management (court-appointed manager to rehabilitate the company), scheme of arrangement (court-approved compromise with creditors/members), and voluntary arrangement.

Judicial management order: granted on application by the company, creditors, or liquidator; provides a moratorium on proceedings against the company while the judicial manager prepares a rescue plan.

Voidable transactions: transactions at undervalue, unfair preferences, and extortionate credit transactions within the prescribed period (generally 6 months to 2 years) may be set aside by the liquidator.

Financial statements must be prepared in accordance with approved accounting standards (MFRS or MPERS) and laid before members at the AGM (public companies) or circulated (private companies).

MFRS applies to entities with public accountability; MPERS is the private entity reporting standard for entities without public accountability.

Directors' report must accompany financial statements and include a review of the business, principal risks, dividends, and details of directors' interests.

Auditor's report: statutory audit required for most companies; small companies may be exempt if they meet at least two of three thresholds (revenue, assets, employees) under the prescribed practice directive.

Financial statements must be lodged with the Registrar within 30 days of the AGM or circulation date; private companies lodge within 30 days of the circulation date.

Key statements: statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows, and notes.

Accounting equation: Assets = Liabilities + Equity; retained earnings roll forward: opening retained earnings + net profit − dividends = closing retained earnings.

Depreciation methods: straight-line (cost − residual value) ÷ useful life; reducing balance (carrying amount × rate); disclosure of useful lives and methods required.

Corporate income tax rate in Malaysia: 24% standard; 15%/17% for small and medium companies on the first RM600,000 chargeable income (subject to conditions, including paid-up capital ≤ RM2.5 million and gross income ≤ RM50 million).

Tax residence: a company is resident if its management and control are exercised in Malaysia; residence affects access to double taxation agreements and certain incentives.

Capital allowances replace depreciation for tax purposes; initial allowance (typically 20%) and annual allowance (typically 14% for plant and machinery) apply to qualifying expenditure.

SST: sales tax (5% or 10%) on taxable goods and service tax (6%) on prescribed services; registration thresholds vary (e.g., RM500,000 for most services).

Withholding tax: payments to non-residents for interest, royalties, and certain services attract withholding tax at rates ranging from 10% to 15%, subject to treaty relief.

Tax filing: Form C must be submitted within 7 months of the financial year end; estimated tax payable (CP204) must be submitted within 30 days of the basis period.

Group relief: 70% of a surrendering company's adjusted loss may be claimed by a claimant company within the same group, subject to conditions and shareholding thresholds.

Transfer pricing: transactions with related parties must be at arm's length; contemporaneous documentation is required, with penalties for non-compliance.

Contract essentials: offer, acceptance, consideration, intention to create legal relations, capacity, and certainty of terms; contracts may be oral or written unless a statute requires writing.

Contracts Act 1950 (Malaysia) governs contract formation; consideration must be lawful and real but need not be adequate; past consideration is generally not valid.

Partnership: governed by the Partnership Act 1961; a partnership is not a separate legal entity, partners have unlimited joint and several liability, and the maximum number of partners is 20 (except professional firms).

Limited Liability Partnership (LLP): a separate legal entity with perpetual succession; partners' liability is limited to their agreed contribution; governed by the LLP Act 2012 and supervised by CCM.

LLP registration: minimum two partners; must lodge a declaration of compliance and appoint a compliance officer; name must end with 'PLT' or 'LLP'.

Agency: an agent may bind the principal where actual or apparent authority exists; undisclosed principals may sue and be sued on the contract.

Sale of goods: implied terms include title, description, fitness for purpose, and merchantable quality under the Sale of Goods Act 1957; risk generally passes with property.

Negligence: duty of care, breach, causation, and damage; the tort of negligence applies alongside contractual liability, subject to limitation periods (6 years for contract and tort in Malaysia).