COMPANIES ACT 1965 PART 1

COMPANIES ACT 1965 - PART 1 (PRELIMINARY) SECTIONS 1 TO 6
1. Short title
(1) This Act maybe cited as the Companies Act 1965.
(2) (Omitted).
2. (Omitted).
3. Repeals
(1) The written laws mentioned in the First Schedule to the extent to which they are therein expressed to be repealed or amended are hereby repealed or amended accordingly.
Transitory provisions
(2) Unless the contrary intention appears in this Act—
(a) all persons, things and circumstances appointed or created by or under any of the repealed or amended written laws or existing or continuing under any of such written laws immediately before the commencement of this Act shall under and subject to this Act continue to have the same status operation and effect as they respectively would have had if those written laws had not been so repealed or amended; and
(b) in particular and without affecting the generality of the foregoing paragraph, such repeal shall not disturb the continuity of status, operation or effect of any Order in Council, order, rule, regulation, scale of fees, appointment, conveyance, mortgage, deed, agreement, resolution, direction, instrument, document, memorandum, articles, incorporation, nomination, affidavit, call, forfeiture, minute, assignment, register, registration, transfer, list, licence, certificate, security, notice, compromise, arrangement, right, priority, liability, duty, obligation, proceeding, matter or thing made, done, effected, given, issued, passed, taken, validated, entered into, executed, lodged, accrued, incurred, existing, pending or acquired by or under any of such written laws before the commencement of this Act.
(3) Nothing in this Act shall affect the Table in any repealed written law corresponding to Table A of the Fourth Schedule or any part thereof (either as originally enacted or as altered in pursuance of any statutory power) or the corresponding Table in any former written law relating to companies (either as originally enacted or as so altered) so far as the same applies to any
company existing at the commencement of this Act.
(4) The provisions of this Act with respect to winding up other than Subdivision (5) of Division 4 of Part X shall not apply to any company or society of which the winding up has commenced before the commencement of this Act, but every such company or society shall be wound up in the same manner and with the same incidents as if this Act had not been passed and for the purposes of the winding up the written laws under which the winding up commenced shall be deemed to remain in full force.
(5) Paragraphs 9(1)(c) and (d) shall not apply to any person in relation to a private company until the conclusion of the next annual general meeting held after the commencement of this Act if he was appointed as auditor of that company before the commencement of this Act.
4. Interpretation
(1) In this Act, unless the contrary intention appears—
“accounting records” , in relation to a corporation, includes invoices, receipts, orders for
payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry and also includes such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up;
“accounts” means profit and loss accounts and balance sheets and includes notes or statements required by this Act (other than auditors’ reports or directors’ reports) and attached or intended to be read with profit and loss accounts or balance sheets;
“annual general meeting” in relation to a company means a meeting of the company required to be held by section 143;
“annual return” means—
(a) in relation to a company having a share capital, the return required to be made by subsection 165(1); and
(b) in relation to a company not having a share capital, the return required to be made by subsection 165(5),
and includes any document accompanying the return;
“appointed date” has the same meaning as is assigned to that expression in the Companies Commission of Malaysia Act 2001;
“approved company auditor” means a person approved as such by the Minister under section 8 whose approval has not been revoked;
“approved liquidator” means an approved company auditor who has been approved by the Minister under section 8 as a liquidator and whose approval has not been revoked;
“articles” means articles of association;
“banking corporation” means a licensed bank, a licensed merchant bank and an Islamic bank;
“books” includes any register or other record of information and any accounts or accounting records, however compiled, recorded or stored, and also includes any document;
“borrowing corporation” means a corporation that is or will be under a liability (whether or not such liability is present or future) to repay any money received or to be received by it in response to an invitation to the public to subscribe for or purchase debentures of the corporation in accordance with the provisions of Division 4 of Part IV;
“branch register” means—
(a) in relation to a company—
(i) a branch register of members of the company kept in pursuance of section 164; or
(ii) a branch register of holders of debentures kept in pursuance of section 70, as the case may require; and
(b) in relation to a foreign company, a branch register of members of the company kept in pursuance of section 342;
“certified” , in relation to a copy of a document, means certified in the prescribed manner to be a true copy of the document and, in relation to a translation of a document, means certified in the prescribed manner to be a correct translation of the document into the national language or into the English language, as the case requires;
“charge” includes a mortgage and any agreement to give or execute a charge or mortgage whether upon demand or otherwise;
“Commission” means the Companies Commission of Malaysia established under the Companies Commission of Malaysia Act 2001;
“company” means a company incorporated pursuant to this Act or pursuant to any corresponding previous enactment;
“company having a share capital” includes an unlimited company with a share capital;
“company limited by guarantee” means a company formed on the principle of having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up;
“company limited by shares” means a company formed on the principle of having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them;
“contributory” , in relation to a company, means a person liable to contribute to the assets of the company in the event of its being wound up, and includes the holder of fully paid shares in the company and, prior to the final determination of the persons who are contributories, includes any person alleged to be a contributory;
“corporation” means any body corporate formed or incorporated or existing within Malaysia or outside Malaysia and includes any foreign company but does not include—
(a) any body corporate that is incorporated within Malaysia and is by notice of the Minister published in the Gazette declared to be a public authority or an instrumentality or agency of the public Government of Malaysia or of any State or to be a body corporate which is not incorporated for commercial purposes;
(b) any corporation sole;
(c) any society registered under any written law relating to co-operative societies; or
(d) any trade union registered under any written law as a trade union;
“corresponding previous written law” means any written law relating to companies which has been at any time in force in any part of Malaysia and which corresponds with any provision of this Act;
“Court” means the High Court or a judge thereof;
“creditors’ voluntary winding up” means a winding up under Division 3 of Part X, other than a members’ voluntary winding up;
“debenture” includes debenture stock, bonds, notes and any other securities of a corporation whether constituting a charge on the assets of the corporation or not;
“default penalty” means a default penalty within the meaning of section 370;
“director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director;
“Division” means a Division of this Act and a reference to a specified Division is a reference to that Division of the Part in which the reference occurs;
“document” includes summons, order and other legal process, and notice and register;
“emoluments” , in relation to a director or auditor of a company, includes any fees, percentages and other payments made (including the money value of any allowances or perquisites) or consideration given, directly or indirectly, to the director or auditor by that company or by a holding company or a subsidiary of that company, whether made or given to him in his capacity as a director or auditor or otherwise in connection with the affairs of that company or of the holding company or the subsidiary;
“equity share” means any share which is not a preference share;
“exempt private company” means a private company in the shares of which no beneficial interest is held directly or indirectly by any corporation and which has not more than twenty members none of whom is a corporation;
“expert” includes engineer, valuer, accountant and any other person whose profession or reputation gives authority to a statement made by him;
“filed” means filed under this Act or any corresponding previous written law;
“financial year”, in relation to any corporation, means the period in respect of which any profit and loss account of the corporation laid before it in general meeting is made up, whether that period is a year or not;
“foreign company” means—
(a) a company, corporation, society, association or other body incorporated outside Malaysia; or
(b) an unincorporated society, association or other body which under the law of its place of origin may sue or be sued, or hold property in the name of the secretary or other officer of the body or association duly appointed for that purpose and which does not have its head office or principal place of business in Malaysia;
“guarantor corporation” , in relation to a borrowing corporation, means a corporation that has guaranteed or has agreed to guarantee the repayment of any money received or to be received by the borrowing corporation in response to an invitation to the public to subscribe for or purchase debentures of the borrowing corporation;
“limited company” means a company limited by shares or by guarantee or both by shares and guarantee;
“liquidator” includes the Official Receiver when acting as the liquidator of a corporation;
“lodged” means lodged under this Act or any corresponding previous written law;
“manager” , in relation to a company, means the principal executive officer of the company for the time being by whatever name called and whether or not he is a director;
“marketable securities” means debentures, finds, stocks, shares or bonds of any Government or of any local authority or of any corporation or society and includes any right or option in respect of shares in any corporation and any interest as defined in section 84;
“members’ voluntary winding up” means a winding up under Division 3 of Part X, where a declaration has been made and lodged in pursuance of section 257;
“memorandum” means memorandum of association;
“minimum subscription”
(a) in relation to any shares of an unlisted recreational club which are offered to the public for subscription, means the amount stated in the prospectus relating to the offer in pursuance of paragraph 4(a) of the Fifth Schedule;
(b) in relation to any issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase, shares made pursuant to the Securities Commission Act 1993 [Act 498], means the amount stated in the prospectus relating to the issue, offer or invitation in pursuance of the requirements of the Securities Commission relating to contents of prospectuses,
as the minimum amount which in the opinion of the directors must be raised by the issue of the shares so offered;
“Minister” means the Minister charged with the responsibility for companies;
“office copy” , in relation to any Court order or other Court document, means a copy authenticated under the hand or seal of the Registrar or other proper office of the Court;
“officer” in relation to a corporation includes—
(a) any director, secretary or employee of the corporation;
(b) a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and
(c) any liquidator of a company appointed in a voluntary winding up,
but does not include—
(d) any receiver who is not also a manager;
(e) any receiver and manager appointed by the Court; or
(f) any liquidator appointed by the Court or by the creditors;
“Official Receiver” means the Official Assignee, Deputy Official Assignee, Senior Assistant Official Assignee, Assistant Official Assignee, Bankruptcy Officer and any other officer appointed under the Bankruptcy Act 1967];
“preference share” means a share by whatever name called, which does not entitle the holder thereof to the right to vote at a general meeting or to any right to participate beyond a specified amount in any distribution whether by way of dividend, or on redemption, in a winding up, or otherwise;
“prescribed” means prescribed by or under this Act;
“principal register”, in relation to a company, means the register of members of the company kept in pursuance of section 158;
“printed” includes typewritten or lithographed or reproduced by any mechanical means;
“private company” means—
(a) any company which immediately prior to the commencement of this Act was a private company under the repealed written laws;
(b) any company incorporated as a private company by virtue of section 15; or
(c) any company converted into a private company pursuant to subsection 26(1), being a company which has not ceased to be a private company under section 26 or 27;
“profit and loss account” includes income and expenditure account, revenue account or any other account showing the results of the business of a corporation for a period;
“promoter” , in relation to a prospectus issued by or in connection with a corporation, means a promoter of the corporation who was a party to the preparation of the prospectus or of any relevant portion thereof; but does not include any person by reason only of his acting in a professional capacity;
“prospectus” means any prospectus, notice, circular, advertisement or invitation inviting applications or offers from the public to subscribe for or purchase or offering to the public for subscription or purchase any shares in or debentures of or any units of shares in or units of debentures of a corporation or proposed corporation and, in relation to any prospectus registered under the Securities Commission Act 1993, means a prospectus as defined under that Act;
“public company” means a company other than a private company;
“registered” means registered under this Act or any corresponding previous written law;
“Registrar” means the Registrar of Companies as designated under subsection 7 1(1);
“regulations” means regulations under this Act;
“related corporation”, in relation to a corporation, means a corporation which is deemed to be related to the first-mentioned corporation by virtue of section 6;
“repealed written laws” means the written laws repealed by this Act;
“resolution for voluntary winding up” means the resolution referred to in section 254;
“rules” means rules of court;
“securities” has the same meaning as is assigned to that word in the Securities Commission Act
1993;
“share” means share in the share capital of a corporation and includes stock except where a distinction between stock and shares is expressed or implied;
“statutory meeting” means the meeting referred to in section 142;
“statutory report” means the report referred to in section 142;
“Subdivision” means a Subdivision of this Act and a reference to a specified subdivision is a reference to that Subdivision of the Division in which the reference occurs;
“Table A” means Table A in the Fourth Schedule;
“this Act” includes any regulations;
“transparency”, in relation to a document, means—
(a) a developed negative or positive photograph of that document (in this definition referred to as an “original photograph”) made on a transparent base, by means of light reflected from or transmitted through the document;
(b) a copy of an original photograph made by the use of photo-sensitive material (being photo-sensitive material on a transparent base) placed in surface contact with the original photograph; or
(c) any one of a series of copies of an original photograph, the first of the series being made by the use of photo-sensitive material (being photo-sensitive material on a transparent base) placed in surface contact with a copy referred to in paragraph (b) and each succeeding copy in the series being made, in the same manner from any preceding copy in the series;
“trustee corporation” means—
(a) a company registered as a trust company under the Trust Companies Act 1949; or
(b) a corporation that is a public company under this Act or under the laws of any other country, which has been declared by the Minister to be a trustee corporation for ‘the purposes of this Act;
“unit” , in relation to a share, debenture or other interest, means any right or interest therein, by whatever term called;
“unlimited company” means a company formed on the principle of having no limit placed on the liability of its members;
“unlisted recreational club” has the same meaning as is assigned to that expression in the Securities Commission Act 1993;
“voting share” , in relation to a body corporate, means an issued share of the body corporate, not being—
(a) a share to which, under no circumstances, there is attached a right to vote; or
(b) a share to which there is attached a right to vote only in one or more of the following circumstances:
(i) during a period in which a dividend (or part of a dividend) in respect of the share is in arrears;
(ii) upon a proposal to reduce the share capital of the body corporate;
(iii) upon a proposal affecting the rights attached to the share;
(iv) upon a proposal to wind up the body corporate;
(v) upon a proposal for the disposal of the whole of the property, business and undertakings of the body corporate;
(vi) during the winding up of the body corporate.
(1 a) In this Act—
(a) “licensed bank”, “licensed business”, “licensed discount house”, “licensed finance company”, “licensed institution”, “licensed merchant bank”, “licensed money broker”, “non-scheduled institution”, “scheduled business” and “scheduled institution” shall have the meanings assigned to them in subsection 2(1) of the Banking and Financial Institutions Act 1989; and
(b) “Islamic bank” or “Islamic banking business” shall have the meaning assigned to it in the Islamic Banking Act 1983
(2) For the purposes of this Act a person shall not be regarded as a person in accordance with whose directions or instructions the directors of a company are accustomed to act by reason only that the directors act on advice given by him in a professional capacity.
(3) For the purposes of this Act a statement included in a prospectus or statement in lieu of prospectus shall be deemed to be untrue if it is misleading in the form and context in which it is included.
(4) For the purposes of this Act a statement shall be deemed to be included in a prospectus or statement in lieu of prospectus if it is contained in any report or memorandum appearing on the face thereof or by reference incorporated therein or issued therewith.
(5) For the purposes of this Act any invitation to the public to deposit money with or to lend money to a corporation shall be deemed to be an invitation to subscribe for or purchase debentures of the corporation and any document that is issued or intended or required to be issued by a corporation acknowledging or evidencing or constituting an acknowledgment of the indebtedness of the corporation in respect of any money that is or may be deposited with or lent to the corporation in response to such an invitation shall be deemed to be a debenture, but an invitation to the public by a prescribed corporation as defined in subsection 3 8(7) shall not be deemed to be an invitation to the public to deposit money with or to lend money to the corporation for the purpose of Division 4 of Part IV.
(6) Any reference in this Act to offering shares or debentures to the public shall, unless the contrary intention appears, be construed as including a reference to offering them to any section of the public, whether selected as clients of the person issuing the prospectus or in any other manner; but a bona fide offer or invitation with respect to shares or debentures shall not be deemed to be an offer to the public if it is—
(a) an offer or invitation to enter into an underwriting agreement;
(b) made to a person whose ordinary business it is to buy or sell shares or debentures whether as principal or agent;
(c) made to existing members or debenture holders of a corporation and relates to shares in or debentures of that corporation and is not an offer to which section 46 of the Securities Commission Act 1993 applies; or
(d) made to existing members of a company within the meaning of section 270 and relates to shares in the corporation within the meaning of that section.
(7) Unless the contrary intention appears any reference in this Act to a person being or becoming bankrupt or to a person assigning his estate for the benefit of his creditors or making an arrangement with his creditors under any written law relating to bankruptcy or to a person being an undischarged bankrupt or to any status, condition, act, matter or thing under or in relation to the law of bankruptcy shall be construed as including a reference to a person being or becoming bankrupt or insolvent or to a person making any such assignment or arrangement or to a person being an undischarged bankrupt or insolvent or to the corresponding status, condition, act, matter or thing (as the case requires) under any written law relating to bankruptcy or insolvency.
(8) (Repealed]).

5. Definition of subsidiary and holding company
(1) For the purpose of this Act, a corporation shall, subject to subsection (3), be deemed to be a subsidiary of another corporation, if—
(a) that other corporation—
(i) controls the composition of the board of directors of the first-mentioned corporation;
(ii) controls more than half of the voting power of the first-mentioned corporation; or
(iii) holds more than half of the issued share capital of the first-mentioned corporation (excluding any part thereof which consists of preference shares); or
(b) the first-mentioned corporation is a subsidiary of any corporation which is that other corporation’s subsidiary.
(2) For the purposes of subsection (1), the composition of a corporation’s board of directors shall be deemed to be controlled by another corporation if that other corporation by the exercise of some power exercisable by it without the consent or concurrence of any other person can appoint or remove all or a majority of the directors, and for the purposes of this provision that other corporation shall be deemed to have power to make such an appointment if—
(a) a person caimot be appointed as a director without the exercise in his favour by that other corporation of such a power; or
(b) a person’s appointment as a director follows necessarily from his being a director or other officer of that other corporation.
(3) In determining whether one corporation is a subsidiary of another corporation—
(a) any shares held or power exercisable by that other corporation in a fiduciary capacity shall be treated as not held or exercisable by it;
(b) subject to paragraphs (c) and (d) , any shares held or power exercisable—
(i) by any person as a nominee for that other corporation (except where that other corporation is concerned only in a fiduciary capacity); or
(ii) by, or by a nominee for, a subsidiary of that other corporation, not being a subsidiary which is concerned only in a fiduciary capacity,
shall be treated as held or exercisable by that other corporation;
(C) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first-mentioned corporation or of a trust deed for securing any issue of such debentures shall be disregarded; and
(d) any shares held or power exercisable by, or by a nominee for, that other corporation or its subsidiary (not being held or exercisable as mentioned in paragraph (c)) shall be treated as not held or exercisable by that other corporation if the ordinary business of that other corporation or its subsidiary, as the case may be, includes the lending of money and the shares are held or power is exercisable as aforesaid by way of security only for the purposes of a transaction entered into in the ordinary course of that business.
(4) A reference in this Act to the holding company of a company or other corporation shall be read as a reference to a corporation of which that last-mentioned company or corporation is a subsidiary.
5a. Definition of ultimate holding company
For the purposes of this Act, a corporation shall be deemed to be the ultimate holding company of another corporation if—
(a) the other corporation is a subsidiary of the first-mentioned corporation; and (b) the first-mentioned corporation is not itself a subsidiary of any corporation.
5b. Definition of wholly-owned subsidiary
For the purposes of this Act, a corporation shall be deemed to be a wholly-owned subsidiary of another corporation if none of the members of the first-mentioned corporation is a person other than—
(a) the second-mentioned corporation;
(b) a nominee of the second-mentioned corporation;
(c) a subsidiary of the second-mentioned corporation, being a subsidiary none of the members of which is a person other than the second-mentioned corporation or a nominee of the second-mentioned corporation; or
(ci) a nominee of such a subsidiary.
6. When corporations deemed to be related to each other
Where a corporation—
(a) is the holding company of another corporation;
(b) is a subsidiary of another corporation; or
(c) is a subsidiary of the holding company of another corporation,
that first-mentioned corporation and that other corporation shall for the purposes of this Act be deemed to be related to each other.
6a. Interests in shares
(1) The following subsections have effect for the purposes of Division 3a of Part IV, sections 134 and 135.
(2) Where any property held in trust consists of or includes shares in which a person knows or has reasonable grounds for believing that he has an interest, he shall be deemed to have an interest in those shares.
(3) A right does not constitute an interest in a share where—
(a) a right (being a right or an interest described in the definition of “interest” in section 84) was issued or offered to the public for subscription or purchase;
(b) the public was invited to subscribe for or purchase such a right, and the right was so subscribed for or purchased;
(c) such a right is held by the management company and was issued for the purpose of an offer to the public within the meaning of section 84; or
(d) such a right is a right which has been prescribed by the Minister, after consultation with the Minister of Finance, as not being an interest in a share.
(4) A person shall be deemed to have an interest in a share where a body corporate has an interest in a share and—
(a) the body corporate is, or its directors are accustomed, or is under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that person in relation to that share;
(b) that person has a controlling interest in the body corporate; or
(c) that person, or the associates of that person or that person and his associates are entitled to exercise or control the exercise of not less than fifteen per centum of the votes attached to the voting shares in the body corporate.
(5) For the purposes of paragraph (4)(c), a person is an associate of another person if the first-mentioned person is—
(a) a corporation which is a related corporation;
(b) a person in accordance with whose directions, instructions or wishes that other person is accustomed or is under an obligation, whether formal or informal, to act in relation to the share referred to in subsection (4);
(c) a person who is accustomed or is under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that other person in relation to that share;
(d) a body corporate which is, or the directors of which are, accustomed or under an obligation whether formal or informal, to act in accordance with the directions, instructions or wishes of that other person in relation to that share; or
(e) a body corporate in accordance with the directions, instructions or wishes of which, or of the directors of which, that other person is accustomed or under an obligation whether formal or informal, to act in relation to that share.
(6) A person shall be deemed to have an interest in a share in any one or more of the following circumstances where he—
(a) has entered into a contract to purchase a share;
(b,) has a right, otherwise than by reason of having an interest under a trust, to have a share transferred to himself or to his order, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not;
(c) has the right to acquire a share or an interest in a share, under an option, whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or
(d) is entitled (otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a corporation or of a class of its members) to exercise or control the exercise of a right attached to a share, not being a share of which he is the registered holder.
(7) A person shall be deemed to have an interest in a share if that share is held jointly with another person.
(8) For the purpose of determining whether a person has an interest in a share it is immaterial that the interest cannot be related to a particular share.
(9) There shall be disregarded—
(a) an interest in a share if the interest is that of a person who holds the share as bare trustee;
(b) an interest in a share of a person whose ordinary business includes the lending of money if he holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money;
(c) an interest of a person in a share being an interest held by him by reason of his holding a prescribed office; and
(d) a prescribed interest in a share being an interest of such person, or of the persons included in such class of persons, as is prescribed.
(10) An interest in a share shall not be disregarded by reason only of—
(a) its remoteness;
(b) the manner in which it arose;
(c) the fact that the exercise of a right conferred by the interest is, or is capable of being made subject to restraint or restriction; or
(d) the fact that it is held by, or in the name of, a central depository or its nominee company pursuant to the Securities Industry (Central Depositories) Act 1991