Creating a Conducive Legal and Regulatory Framework for Businesses
This Consultative Document explains the views of the CLRC in relation to the proposed changes to the Companies Act 1965 with the objectives of simplifying the laws and procedures for companies generally and small companies in particular. This Consultative Document focuses on (a) separate legislation for small companies; (b) the distinction between private and public companies; (c) the ability of private companies to raise capital; (d) audits, financial reporting and disclosure; (e) company secretaries; (f) the capacity of a company to contract and constructive notice; and (g) company formation and related matters.
One of the core objectives of the Corporate Law Reform Programme is to make the law and regulations conducive to business. The Corporate Law Reform Committee (CLRC), through its Working Group A, reviewed the existing law and regulations to find out how it could be simplified and how to lessen the administrative and compliance burden on companies. Particular attention was paid to the needs of small businesses, who can least afford to comply.
The CLRC examined whether there should be separate legislation for small companies, whether the distinction between private and public companies should be removed, and the ability of private companies to raise capital from the public. The question of whether an audit of a company’s accounts should remain mandatory was also looked into. In arriving at its recommendations, the CLRC considered representations made by representatives of the accounting community and commissioned a survey of the company directors of small and medium sized enterprises (SMEs) to find out their views. The results of this survey are set out in Section D to this Consultative Document.
At present, companies must appoint professional secretaries. The CLRC looked at whether this should remain mandatory. The enforceability of contracts is of importance to business and so the capacity of a company to contract and the doctrine of constructive notice were reviewed. Company formation and the filings that currently have to be made with the Registrar were also reviewed. The CLRC looked at the types of companies that can be incorporated, single member companies, the incorporation process from name search and reservation to certificate of incorporation, electronic filing and the liability of the Registrar.
We hope to receive views and comments on the recommendations stated in this Consultative Document. Please reply to Nor Azimah Abdul Aziz at the Companies Commission of Malaysia (SSM) by 15 April 2007.
Download consultation document “CREATING A CONDUCIVE LEGAL AND REGULATORY FRAMEWORK FOR BUSINESSES” (.pdf)
Download Responses and Comments Received on Consultative Document “CREATING A CONDUCIVE LEGAL AND REGULATORY FRAMEWORK FOR BUSINESSES” (.pdf)