PAST YEAR QUESTION SOLUTION

JANUARI 2013

PART A

1. Four(4) document that are required to be lodged with the CCM for registration of foreign company:

• A certified copy of its certificated of incorporation – from origin country

• A certified copy of its charter, status, memorandum & articles or other similar document

• A list of directors or similar particular including a list of director residence in Malaysia who are members of local BOD & power of the local director

• A notice of its register office

2. Who can demand a poll vote?• The chairman.• At least 5 member present in person by proxy.• Any members present in person or by proxy

holding at least 10% of the total voting rights of all the members present at the meeting.

• Any members holding shares not less than 10% of the total paid up capital

3. What is an exempt private company & what are the advantages?

Exempt private company The advantage

•It must not have more than 20 members•The shares must not owned directly or indirectly by a corporation.

•Exempted from submitting its Financial statement (FS) with its annual return to CCM•Exempted from complying with the restriction on loans to directors and persons connected to directors under s.133

4. Differentiate between transfer of shares and transmission of shares.

Transfer of shares Transmission of shares

•Voluntarily act of the former owner when he sell or give away the shares to others person•Need proper instrument of transfer – FORM 32A- Transfer of shares in private- Transfer of shares in public

•Changes of ownership not by agreement and voluntarily action but by operation of law or other event•- Member’s death - Member’s bankruptcy - Lunacy of members - Liquidation of corp. members

5. Four (4) circumtances may constitute a quorum for a company.• Creditors Meeting – 1 person hold the

proxies of others creditors• Class Meetings – if the particular class held

by 1 person only.•Meeting of Wholly Owned Subsidiary –

only 1 person represent the holding• By Statute – by court direction

6. The basic requirement for deregistration under sec.308 of the Company Act 1965• Must be inactive, no longer carrying any business• Does not hold any asset• Does not have any liabilities• Is not put under ‘receivership’

7. Two (2) types of corporate restructuring.Internal Restructuring External Restructuring

Undertaken by companies that have surplus capital or companies whose capital has been eroded by trading losses.Companies who wish to reduce their capital need to comply with certain requirements of their local Companies Act. This normally involves the following:-1. The capital reduction scheme

must be confirmed by court; 2. The articles of association of

company must provide for such reduction of capital; or

3. A special resolution must be passed by company

It is the process in which one existing company reconstructs itself with new name & identity.Wherever an undertaking is carried on by a company and is in substance transferred, not to an outsider but to another company consisting substantially of the same shareholder with a view to its being continued by the transferee company. It is essential covered under the category

8. Vacate the Office of Secretary

• Lodge the FORM 48E – Notice of intention to Vacate the Office of Secretary – if that none of the directors of the company can be communicated with the last known residential address

• Filed with CCM• After the expiry of 1 month from the date of

notification – cease to be secretary• However – should responsible for any act or omission

done before the secretary vacated the office

9. The procedure for resignation of an independent non-executive director.

• Giving a notice – cannot resign if the director less than 2

• If required to pass reso. resignation effective from the date of reso. pass

• Should notify CCM and update form 49 and register of directors, managers and secretary book

10. Distinguish between fixed and floating charge.

Fixed charge Floating charge

A mortgage of one or more specific or ascertained and definite property of the company.

Company is prevented from dealing freely with that property.

An equitable mortgage on some or all of the company’s present and future property

Company is allowed to deal with the property in ordinary course of business

PART BQUESTION 1a) The choice of company’s name as Agro Tourism Farming Sdn Bhd, pursuant to

sec.22(1) and sec.342(1) of the company act 1965 is not similar or identical to an existing company name unless consent of that company had been obtain

Not a trade mark or patent of any product unless with a consent of the owner Is not in conflict with objects of the proposed companyUndesirable name – likely to be offensive to the publicNot the names which the Minister has directed the CCM not to accept for

registration◦ Connection with members of royal family – kings, princess, crown◦ Connection with federal or state government – national, federal◦ Connection with Asean, Commonwealth, UN n foreign government – NATO, OPEC◦ Connection with any political parties

b) The procedure for the incorporation of Agro Tourism Farming Snd Bhd as a private company limited share is under section 24 of the act:

• As stipulated by the act, the objective of the proposed company must be restricted to providing recreation or amusement or to promote commerce, industry, art, science, religion, charity, pension, or other objects beneficial to society.

• The propose company must use its profits and other income for the purpose of its objects and is prohibited from paying dividends to its members

• The company incorporated as a company limited by shares cannot own any land without a license from the Minister

• Any amendment to the company Memorandum and Article of Association shall require the approval of the Minister of Domestic Trade and Consumer Affairs

• Appointment of directors requires the prior approval of the Minister of Domestic Trade and Consumer Affairs

• The company cannot be used to carry out any political or politically motivated or unlawful activities.

• The company cannot request for any contributions or donations or make any collection of money from the public without the prior approval of the Minister of Domestic Trade and Consumer Affairs.

• The company cannot own or dispose of land ownership without the prior approval of the Minister of Domestic Trade and Consumer Affairs

• The company is not allowed to incorporate subsidiaries and is not allowed to hold more than 49% shares in another company

• The company is required to collect the total amount pledged by prospective donors within 6 months after its incorporation.

c) Rosman can public shares issue to raising the remaining share capital and the procedure is

• PUBLIC ISSUE - Direct allotment where the shares are issued and

allotted directly to members of public who has subscribed for the shares

• OFFER FOR SALES - When to co. seeks to go public – offer share hold by

shareholders to be purchase by member of public- Share place in issuing house – offer for sales to the public• RIGHT ISSUES- Offer to existing members

PAST YEAR QUSTION SOLUTION

JUNE 2013

PART A1. Conversion from Unlimited to Limited• Sec 25, may convert by passing a special resolution.• The directors shall instruct CS to convene a GM to pass the following special resolution:

To convert the company to a unlimited to a limited company To alter the Memorandum and Article Association to limit liability of the members. To change the name of the company to include the word “Berhad” or “Bhd”.

• The co. shall lodge with CCM within 14 days after passing the special resolution that: Form 11 (Notice of Resolution) A printed copy of the amended M&A The fee for authorized share capital if no capital share before. Approval fee of RM50 for the CCM to change the status.

• The CCM will issue Form 16-Certificate of Incorporation on conversion to a limited company.

• Attach a copy of Form 11 and Form 16 to every copy of the company’s M&A

2. Statutory meeting• Required to hold a meeting within 1 – 3 month after the

date of commencement business.• Once in entire life.• Who may call – at least 2 director & circulated to all

member within 7 days before the date of meeting and lodge the statutory report in CCM 7 days after the meeting.

Class meeting – meeting by the members in each classes of share regarding the right and privileges attached to the class

3. Loan to directors

•Sec 133 of the Act states that the co. shall not: Make a loan to the director of the company Make a loan to a director of a co. which is

deemed to be related to the co. Enter into any agreement or provide any

security in connection with a loan made to such director

4. Two (2) categories of person shall not act as liquidator

Indebted to the company or its holding or subsidiary in amount exceeding RM2,500.

An officer of the company A partner, employer or employee of an office

of the company

5. The aim of the CSCE

• Position of CS involved with internal affairs of the co. which demand ethical conduct among CS

• To enhance the standard of corporate governance, and

• To instill professionalism and effectiveness among CS

6. Central Depository System (CDS)

• To provide efficient central clearing and settlement of securities

• Govern by SIA 1991• Principal activity – operation & maintenance in

respect of shares, bond or others securities of any corporation. CDS will created script less trading for immobilization of securities

• Investor should have one ADA if wish the trade in prescribed in securities in CDS - safekeeping of shares, for custodian and pledging services

7. Four (4) main regulatory function of Securities Commission Malaysia (SCM)

• Registering authority for prospectuses of corporations other than unlisted recreational clubs

• Approving authority for corporate bond issues• Regulating all matters relating to securities

and futures contracts• Regulating the take-over and mergers of

companies

8. What is an exempt private company & what are the advantages?

Exempt private company The advantage

•It must not have more than 20 members•The shares must not owned directly or indirectly by a corporation.

•Exempted from submitting its Financial statement (FS) with its annual return to CCM•Exempted from complying with the restriction on loans to directors and persons connected to directors under s.133

9. State the content of Form 6

FORM 6 – Declaration of Compliance Name of 1st SecretaryAddress of registered officeName of first two directorPrincipal object for which the company is

incorporatedAuthorized capital

10. Employee Share Option Scheme (ESOS)

• Opportunity for employees to own shares in the co. – at special price – below market price• Scheme need to submit to CCM for approval• Tabled in GM for shareholder approval• Open to all employees – with terms on

condition• Some sort of employees benefit