The Dewan Negara will approve the Companies Amendment Bill 2019 with notable changes to Companies Act 2016, which are in due course already passed by Dewan Rakayat.
The key changes brought through this amendments are:
- Execution Formalities for Specific Documents
Section 66 of the Act mentions that the formalities to be followed by the company for executing documents by a company by mark of common seal or signature of two members of one of whom should be Director specifically applies to documents that need to be required by law, constitution and agreement.
- Redemption of thePreference Shares
Section 72(4)(c) of the Companies Act allows company to redeem preference share out of share capital but equal number of shares to be redeemed into share capital account. The amendments clarifies that a redemption of preference share out of the profit will only be subject to the solvency statement obligation.
- Appointment of Auditors at Annual General Meetings (AGMs)
Section 340 is silent on the appointment and remuneration of auditors at AGM of a public company.The amendment remove this vagueness and provides that the appointment and remuneration of the auditors shall be one of the agenda to be tabled at the AGM for the shareholder approval.
- Judicial Management Order
The Companies Act Amendment introduced dismissal of application for judicial management order under the provision of judicial management mechanism that allows company or its creditors or directors to apply to the High Court to bring the company under a qualified insolvency professional i.e judicial manager (i.e. a judicial management order) if either such application is opposed by the creditor or receiver is in process of appointment.
The proposed Bill removes the ambiguity surrounding the practical application of certain provisions of the Act and presents first major amendment to the new Companies Act in Malaysia.
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