SSM Licensed Secretary key terms

A written declaration by directors that, immediately after a proposed transaction, the company can pay its debts as they fall due and, within twelve months, will be able to do so on winding up. Required for capital reductions and some other actions under the Companies Act 2016.

The principle that a company's issued share capital is a creditor buffer and cannot be returned to shareholders except through permitted routes such as dividends, buy-backs, or court-approved or solvency-statement reductions.

A company acquiring its own shares from a shareholder, permitted under the Companies Act 2016 only through specified procedures and funding sources, such as distributable profits or proceeds of a fresh share issue.

Shares a company has bought back and holds in itself rather than cancelling. They carry no voting or dividend rights and are typically limited to a percentage of issued capital.

Accumulated realised profits not previously distributed, less accumulated realised losses, from which dividends may lawfully be paid. Unrealised gains, such as upward revaluations, are generally excluded.

The formal decision by which a company resolves to pay a dividend to shareholders. Once properly declared, it creates a debt owed to members, subject to the company having sufficient distributable profits.

A dividend paid part-way through a financial year under authority usually granted to directors by the constitution or a members' resolution, pending the final dividend approved at the annual general meeting.

The total nominal value of shares actually allotted to shareholders. It is distinct from authorised capital, which the Companies Act 2016 abolished as a concept for companies incorporated under it.

The amount received on issuing shares above their nominal value. Under the 2016 Act it sits in a share premium account, whose use is restricted to purposes such as bonus issues and certain expenses.

An allotment of fully paid shares to existing members in proportion to their holdings, funded from reserves such as share premium or retained earnings rather than from new cash.

An offer of new shares to existing shareholders, usually in proportion to their current holdings and often at a discount, giving them a right to subscribe before the shares are offered elsewhere.

A shareholder's entitlement to be offered new shares in proportion to existing holdings before they are issued to outsiders, unless disapplied by the constitution or a members' resolution.

The act of a company issuing and allocating new shares to a person, which requires board approval, proper consideration, and compliance with any pre-emptive or constitutional requirements.

A distribution of profits to shareholders in proportion to their shareholdings, payable only out of distributable profits and typically declared by the board or approved by members.

Structured records of a company's financial position and performance, normally comprising a statement of financial position, profit or loss statement, cash flow statement, changes in equity, and notes.

An independent opinion on whether a company's financial statements give a true and fair view and comply with applicable standards, attached to the statements laid before members.

Relief allowing certain small or dormant private companies to dispense with a statutory audit, subject to thresholds and any member or regulatory objection under the Companies Act 2016.

A narrative report accompanying the financial statements in which directors review the company's affairs, state dividends, reserves, and other matters required by company law and accounting standards.

The statutory and fiduciary obligations of directors, including acting in good faith in the company's best interests, exercising reasonable care and skill, and avoiding conflicts of interest.

A situation where a director's personal interest or another role may influence a decision for the company. Directors must disclose the interest and generally abstain from voting on the matter.

A transaction between a company and a director, substantial shareholder, or connected person, which may require disclosure, member approval, or both under company law and listing rules.

A principle protecting directors from liability for decisions made honestly, on an informed basis, in good faith, and with the reasonable belief that the decision serves the company's best interests.

The system of rules, practices, and processes by which a company is directed and controlled, covering board composition, accountability, risk oversight, and relations with shareholders and stakeholders.

The collective body responsible for the company's management and strategic direction, exercising powers conferred by the constitution and the Companies Act 2016.

A board committee, often required for listed companies, that oversees financial reporting, internal controls, and the external audit relationship, and reports to the full board.

An officer appointed under the Companies Act 2016 with responsibility for statutory registers, filings, board meeting records, and advising the board on compliance and governance matters.

Mandatory records a company must keep, such as registers of members, directors, secretaries, and charges, which must be updated and made available for inspection as required by law.

A yearly filing with the Companies Commission of Malaysia confirming a company's registered particulars, directors, secretary, and share information, lodged within the statutory deadline.

The formal communication to members and directors stating the date, time, place, and business of a meeting, given within the minimum notice period required by the constitution or the Act.

The minimum number of members or directors who must be present for a meeting to validly transact business, usually fixed by the constitution or the Act.

A person appointed by a member to attend and vote at a meeting on the member's behalf, subject to the notice and lodging requirements set out in the Act and constitution.

The process of ending a company's existence by realising assets, paying creditors, and distributing any surplus to members, either voluntarily or by court order.

A solvent winding up initiated by members where directors declare the company can pay its debts in full within a stated period, usually twelve months.

The person appointed to take control of a company in winding up, collect and realise its assets, settle claims, and distribute the remaining property to those entitled.

A winding up initiated by members where the company cannot declare solvency, giving creditors a role in appointing the liquidator and overseeing the process.

A court-sanctioned compromise or arrangement between a company and its members or creditors, used to restructure debt or capital, requiring specified majorities and court approval.

The collective term for procedures intended to rehabilitate a financially distressed company as a going concern rather than liquidate it, including schemes and statutory rescue mechanisms.

A company with no significant accounting transactions during a financial year, which may qualify for reduced filing and audit obligations under the Companies Act 2016.

A body corporate formed under the Limited Liability Partnerships Act 2012, giving partners limited liability while allowing flexible internal management and separate legal personality.

A relationship between two or more persons carrying on business in common with a view of profit, governed in Malaysia by the Partnership Act 1961, without separate legal personality.

The principle that a company or LLP is a legal person distinct from its members, able to own property, contract, sue, and be sued in its own name.

The separation between a company and its members. Courts may lift it in limited circumstances, such as fraud or where a statute expressly imposes liability on controllers.

An act beyond the powers conferred on a company or its officers by law or the constitution. The Companies Act 2016 has largely abolished capacity limits, but directors may still exceed authority.

The document adopted by a company setting out its internal rules, including share rights, board powers, and meeting procedures. It replaces the memorandum and articles under the 2016 Act.

A statutory right for a member to apply to court where the company's affairs are conducted in a manner oppressive to, or in disregard of, the member's interests, allowing remedies such as buy-outs.

A claim brought by a member on behalf of the company against wrongdoers, typically directors, where the company itself fails to pursue the claim, subject to statutory leave requirements.

A member holding too few shares to control ordinary resolutions, who relies on statutory protections such as the oppression remedy and pre-emptive rights.

Tax levied on a company's chargeable income at the prevailing rate, with exemptions and preferential rates available for qualifying small and medium-sized companies.

A company's taxable income after deducting allowable expenses, capital allowances, and losses brought forward, calculated under the Income Tax Act 1967.

Tax relief spread over several years for capital expenditure on qualifying assets such as plant and machinery, instead of a one-off deduction.

An indirect tax imposed on prescribed taxable services at the rate set by law, collected by registered businesses and remitted to the customs authority.

An indirect tax charged on the sale of taxable goods by registered manufacturers or importers, administered alongside service tax under Malaysian indirect tax legislation.

A document issued by a registered business showing the particulars of a taxable supply, including tax charged, which supports input claims and record-keeping obligations.

Something of value given in exchange for a promise, which is essential to form a binding contract under common law unless the promise is made by deed.

The two core elements of contract formation: a definite proposal by one party and an unqualified agreement to it by another, together creating a binding agreement.

Failure to perform a contractual obligation without lawful excuse, entitling the innocent party to remedies such as damages, specific performance, or termination.

A decision taken by the board at a properly convened meeting or by written resolution, valid where directors act within their powers and any conflicts are disclosed.

A decision of shareholders passed at a general meeting or by written resolution, either ordinary (simple majority) or special (higher majority as prescribed).