Malaysia’s Companies Bill Passed: 7 Upcoming Changes

[my article originally published on The Malaysian Lawyer]

The Dewan Rakyat, the lower house of Parliament, passed the Companies Bill 2015 on 4 April 2016. It was first tabled for Second Reading on Thursday 31 March 2016 and Parliament continued and concluded its debate on 4 April 2016.

 

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Upcoming Changes

I had previously written on some of the upcoming changes, especially on the challenges that directors may face and I was also featured on The Edge TV.

The new Companies Act will undoubtedly transform Malaysia’s corporate landscape. Underpinning the changes are the aims of spurring entrepreneurship, making the corporate vehicle more attractive for businesses, deregulating certain aspects of the corporate process, and to introduce the concept of corporate rescue for ailing companies.

It is anticipated that the new Companies Act itself will not be brought into force until a year’s time or so. This is because the new regulations, rules and guidelines will still need to be drawn up.

I set out below 7 of the more significant areas we will see in the new Companies Act.

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In The Edge: Balancing act for directors

I was interviewed by The Edge Financial Daily and I shared my views on some of the challenges that directors will face under the upcoming Companies Bill.

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“It’s not an easy balancing act to be done. But if you are speaking from the perspective of minority shareholders or even shareholders, I would say they will be welcoming these changes because there is more information, and the directors have to allow a platform for the shareholders to discuss, query, ask questions, even if it’s not contained specifically in any audited accounts.

“Free flow of information is quite welcomed,” Lee told The Edge Financial Daily after presenting his paper “New Companies Bill: Upcoming Changes and Impact on Directors and Shareholders” at the Malaysia Legal and Corporate Conference on Oct 7.

Although Lee welcomed the greater flow of information and interaction between the board and the shareholders, he warned of the possibility of shareholders abusing the new privileges to the detriment of the company and its operations.”

My views in The Edge were also briefly discussed on the BFM Morning Run.

It appears from the Parliament website that the Companies Bill 2015 was tabled for its First Reading on 19 October 2015 and its Second Reading on 20 October 2015. We are now close to ushering in the new laws.

Speaking in Kuching on the Companies Bill

I have been invited by CLJLaw to speak on 16 January 2015 at the Pullman Hotel, Kuching.The registration form is over here.

Due to the good response in KL the last time for the Companies Bill seminar, this will now be held over in Kuching.

 

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A lot of us are expecting the new Companies Bill to be tabled during the Parliamentary sitting in March 2015. The Bill and the changes it brings have been long-awaited.

Corporate Rescue Talk at MIA

I was invited by the Malaysian Institute of Accountants to deliver a talk on 4 March 2014 focusing on the insolvency-related provisions of the Companies Bill. It was an interesting session, with a lot of questions and a lively discussion among the participants. The areas I touched on were the changes to the receivership, winding up and schemes of arrangement provisions, and the introduction of judicial management and the corporate voluntary arrangement.

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A copy of my slides can be downloaded here.

Talk on the Companies Bill 2013 to MIA

A colleague and I gave a talk today hosted by the Malaysian Institute of Accountants on the Companies Bill. The session was well attended with over 90 people present. It was an enlightening experience preparing the content for the talk and interesting to hear the questions from the floor. The questions are now making me go back and study the provisions in the Bill in more detail in the other areas.

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The slides are available for download here: