• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
5. crf india 2012  nor azimah abdul aziz
 

5. crf india 2012 nor azimah abdul aziz

on

  • 557 views

 

Statistics

Views

Total Views
557
Views on SlideShare
557
Embed Views
0

Actions

Likes
0
Downloads
2
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    5. crf india 2012  nor azimah abdul aziz 5. crf india 2012 nor azimah abdul aziz Presentation Transcript

    • REFORMING LEGISLATIVE ENVIRONMENT - A GLOBAL PERSPECTIVE SSM’s Corporate Law Reform Programme: Revolutionising Doing Business In Malaysia By: Nor Azimah Abdul Aziz Director Corporate Development & Policy Division Companies Commission of Malaysia Companies Commission of Malaysia @ CRF 2012
    • OVERVIEWBackgroundHighlights of New Provisions to be introducedConclusionCompanies Commission of Malaysia @ CRF 2012 2
    • BACKGROUND Corporate Law Established in Dec. Reform Committee 2003 to conduct a (CLRC) comprehensive review of the Companies Act The 4 year review SSM accepted 183 188 issued 12 Consultative out of the 188 Recommendations papersrecommendations. InJune 2010 it became Final Report was19 policy statements issued in 2008 which are be the comprising of 188basis for the drafting 19 Policy recommendations on of the new Statements wide-ranging aspects Companies Bill from incorporation to winding-up Companies Commission of Malaysia @ CRF 2012 3
    • BACKGROUND APART FROM THE REVIEW ON CORE COMPANY LAW THAT WAS CONDUCTED BY THE CLRC, THE REFORM EXERCISE ALSO CONSIDERED:1. Recommendations of the 2. Other developments in related laws (Capital Accounting Issues Market and Conventional and Islamic Consultative Committee Financial & Banking legislation); (AICC) that was established in Feb 2010 to conduct a 3. Recommendations by the World Bank’s Report focused review on corporate on the Observance of Standards and Codes financial reporting provisions (ROSC) Audit Oversight. and to modernise the Companies Act 1965 based on the development of the 4. Recommendations based on the Report issued applicable approved by the OECD’s Peer Review Group (PRG) of the accounting standards and Global Forum on Transparency and Exchange global best practices; of Information for Tax purposes on Malaysia . The recommendations are also parallel with the Malaysian Government’s Economic Transformation Programme (ETP) Companies Commission of Malaysia @ CRF 2012 4
    • PS 1: Modernizing the Companies ActIntroduce a new legal framework applicable to allcompanies:1. Simplify laws & procedures for companies based on private/public distinction and facilitating the growth of private 2. Remove obstacles & companies; and facilitating the growth of private companies. Companies Commission of Malaysia @ CRF 2012 5
    • PS 2: Facilitating & Modernizing Entrance into the Corporate Sector POLICY STATEMENTSPOLICY Facilitating and modernizing entrance into the corporate sectorSTATEMENT 2 by: • conferring companies with full capacity of a natural person. This would confer unlimited capacity to companies which would lead to the abolition of the doctrine of constructive notice; • introducing the concept of a single member company; • simplifying name approval process and making the process of name reservation optional; • introducing a single incorporation template; • replacing the requirement for statutory declaration with statement of compliance for incorporation purposes; • making the requirements for certificates of incorporation and company seals optional; and • leveraging on the advent of ICT for the purposes of incorporation and lodgements. Companies Commission of Malaysia @ CRF 2012 6
    • PS 3: Migration to No Par Value Regime PS 4: Facilitating The Management & Restructuring Of The Company’s Share Composition POLICY STATEMENTSPOLICY Migration to no par value regimeSTATEMENT 3POLICY Facilitating the management and restructuring of theSTATEMENT 4 company’s share composition by: • introducing alternative procedures for the reduction of capital; • reforming the policies relating to share buyback and financial assistance through the introduction of solvency tests. Companies Commission of Malaysia @ CRF 2012 7
    • PS 5: Simplifying & Facilitating Internal Decision Making Process POLICY STATEMENTSPOLICY Simplifying and facilitating internal decision making process by:STATEMENT 5 • removing the mandatory requirement for private companies to hold Annual General Meeting; • restructuring the policies pertaining to written resolution procedures for private companies towards abolishing the rule of unanimity in passing written resolutions; • simplifying and clarifying the rules relating to meeting procedures; • lifting the prohibition on person(s) who can be appointed as proxies and facilitating the affairs of proxies during general meetings; • liberalizing the modes of voting during general meetings through the recognition of best practices; and • reducing the required threshold for the purpose of convening/requisitioning of general meetings Companies Commission of Malaysia @ CRF 2012 8
    • PS 6: Strengthening the Corporate Governance Structure in Relation to the Affairs of the Directorship of a Company POLICY STATEMENTSPOLICY Strengthening the corporate governance structure in relation toSTATEMENT 6 the affairs of the directorship of a company which include: • the relationship between the board of directors and shadow directors; • clarifying the minimum age for directorship and abolishing the maximum age for directorship; • revising the residency requirement for directorship; • restructuring the rules pertaining to the appointment, resignation and removal of directors; • codifying the requirement for remuneration of directors of public companies to be sanctioned; • providing members the right to inspect directors’ contract of service with public companies • requiring any payment for loss of office of directors of public companies to be approved by disinterested members • clarifying the rules relating to exemption and indemnification of directors’ and officers’/auditors’ liability; and • enhancing the rules relating to disqualification of directors Companies Commission of Malaysia @ CRF 2012 9
    • PS 7 : Reinforcing The Roles of Company Secretary PS 8: Establishment of a Registration Regime for Practicing Company Secretaries PS 9 & 10 POLICY STATEMENTSPOLICY Reinforcing the roles, functions and obligations of the companySTATEMENT 7 secretaries.POLICY Establishment of a mandatory registration regime for practicingSTATEMENT 8 company secretariesPOLICY Integrating the content of the new Companies Act with theSTATEMENT 9 notions and elements of corporate responsibilityPOLICY Enhancement of shareholders’ rights and protection through:STATEMENT 10 • clarifying the application of rules relating to oppression of members’ rights; • refining the application of statutory derivative actions; and • reforming the rules relating to variations of class rights and preference shareholders Companies Commission of Malaysia @ CRF 2012 10
    • PS 11: Strengthening the Corporate Governance Structure Through Refinement of Auditors’ Role & Responsibilities POLICY STATEMENTSPOLICY Strengthening the corporate governance structure throughSTATEMENT 11 refinement of auditors’ role and responsibilities by: • retaining the mandatory requirement for the appointment of auditor(s) for all types of companies; • introducing a new regime for the appointment of auditors for private companies in view of the proposal to lift the requirement for holding annual general meetings; • enhancing the rules relating to the resignation of auditors; • relying on industry practice for mandatory audit rotation of audit firms; and • granting access to auditors on all communications relating to any resolutions which the company proposes to pass by way of the written resolution procedure Companies Commission of Malaysia @ CRF 2012 11
    • PS 12: Reaffirming the Importance of Audited Financial Statements & the Timely Disclosure of such Information PS 13: Strengthening Good Corporate Governance Practices Through Enhancement & Refinement of Rules Pertaining to Transactions Involving Directors & Substantial Shareholders POLICY STATEMENTSPOLICY Reaffirming the importance of audited financial statements andSTATEMENT 12 the timely disclosure of such information.POLICY Strengthening good corporate governance practices throughSTATEMENT 13 enhancement and refinement of rules pertaining to transactions involving directors and substantial shareholders in the following areas: • rules relating to substantial property transactions and persons connected with directors or substantial shareholders; and • disclosure principles to avoid conflict of interests. Companies Commission of Malaysia @ CRF 2012 12
    • PS 14 : Simplifying, Refining & Expediting The Winding Up Process POLICY STATEMENTSPOLICY Simplifying, refining and expediting the winding up process by:STATEMENT 14 • shortening the time taken to wind up a company; • introducing and defining the parameters for exempt dispositions; • refining the concept of undue preference transactions; • preserving the assets of the company; • increasing the threshold for statutory amount of debts to prevent abuse by creditors; • empowering the Court to terminate winding up proceedings to ascertain the status of a company; • enhancing the roles of liquidators to facilitate the smooth process of liquidation; • enhancing the rights of creditors; • reaffirming the rules relating to preferential debts; and • providing adequate protection to employees as unsecured creditors Companies Commission of Malaysia @ CRF 2012 13
    • PS 15 : Modernising Insolvency Law By Introducing Alternative Corporate Rescue Mechanisms to Revive Financially Troubled Companies The judicial management scheme (JM); The corporate voluntary arrangement (CVA); and Clarifying the rules relating to scheme of arrangement.PS 16 : Restructuring The Concept Of Scheme Of Arrangements Between A Company And Its Creditors Companies Commission of Malaysia @ CRF 2012 14
    • PS 17, 18 & 19 POLICY STATEMENTSPOLICY Refining the role of receivers/receiver managers by:STATEMENT 17 • clarifying the status and power of receivers; and • introducing new provisions relating to liability, indemnity and priority over receiver’s costs.POLICY Refining the current system of registration of charges bySTATEMENT 18 improving the procedures and process involved.POLICY Modernizing the enforcement regime by:STATEMENT 19 • introducing the concept of civil and administrative proceedings for selected types of breaches of the Companies Act alongside criminal sanctions; • criminal sanctions to be imposed against the officers responsible instead of the company; and • refining the rules pertaining to disqualification of directors. Companies Commission of Malaysia @ CRF 2012 15
    • PS 2: Facilitating & Modernizing Entrance into the Corporate Sector HIGHLIGHTS Confer companies Companies maywith full capacity of a elect/decide to have natural person & Simplify name their object clauses approval process unlimited capacity to subsequent tocompanies. This leads & making the incorporation (BUTto the abolition of the non-profit making process of name doctrine of reservation constructive notice CLBGs will still be relating to object required to specify optional clause their objects) Companies Commission of Malaysia @ CRF 2012 16
    • PS 2: Facilitating & Modernizing Entrance into the Corporate SectorEasy Access to Incorporation: HIGHLIGHTS Single Fixed Member/incorporation Director fees: Company: Company can be Fee to incorporated by incorporate a only one member company will be and that member based on the type can also be the of companies director. Companies Commission of Malaysia @ CRF 2012 17
    • PS 2: Facilitating & Modernizing Entrance into the Corporate SectorRemoval of Obstacles to HIGHLIGHTSIncorporation Process:Introduction of guaranteed Requirement for M & A at the point of incorporation will NOT be name approval concept: required: Name reservation is Company may adopt AA optional. If name after incorporation; and requested is unavailable, Registrar may assign any Some provision of such expression current Table A will followed by the number become substantive assigned by the Registrar law. Companies Commission of Malaysia @ CRF 2012 18
    • PS 2: Facilitating & Modernizing Entrance into the Corporate Sector HIGHLIGHTS  No more multiple forms [Form 6, Form 13A, Form 48A], no moreIntroduce a M&A and AA at the point ofsingle incorporation.interfaceincorporation  M&A will be part of Super Form &template (via Table A will become substantivea Super Form). law.  Promoter/shareholder /director may incorporate a company. Companies Commission of Malaysia @ CRF 2012 19
    • PS 2: Facilitating & Modernizing Entrance into the Corporate Sector HIGHLIGHTS Leveraging on  No more over the counter transactions the advent of Mandatory electronic incorporation via ICT - by making MyCoID. mandatory for  Replace the requirement for statutory incorporation declaration with statement of compliance documents to for incorporation purposes. be lodged  the requirements for certificate of electronically. incorporation, Notice of incorporation is Making the conclusive evidence. requirements  Company seals will become optional. for certificates contracts or transactions will be executed of incorporation by two directors. (For single director, and company company secretary must countersigned). seals optional. Companies Commission of Malaysia @ CRF 2012 20
    • PS 3: Migration to No Par Value Regime HIGHLIGHTS The NPV regime will bring about simplification of Companies will no accounts where share longer be subjectedCompanies will no to lengthy and premium accountslonger be required costly procedures to and reserves will no to state its longer be applicable (a increase share authorised share transitional period will capital. capital be given to utilise the amount standing in credit in the company’s share premium accounts). Companies Commission of Malaysia @ CRF 2012 21
    • PS 4: Facilitating The Management & Restructuring Of The Company’s Share Composition HIGHLIGHTSIntroducing an alternative procedures for the reduction of capitalthrough the introduction of solvency tests in the form of solvencystatement by directors (and obtaining of shareholders’ approval);Companies will no longer be required to state its authorisedshare capital policies relating to share buyback and financialReforming theassistance via introduction of solvency test provided that aspecial resolution is passed by its shareholders; andRemoving the limitation of share buyback transaction on stockexchange to allow treasury shares be sold by private treaty basedon Bursa Listing Requirements Companies Commission of Malaysia @ CRF 2012 22
    • PS 5: Simplifying & Facilitating Internal Decision Making ProcessRemoving the mandatory requirement for private companies tohold Annual General Meeting: HIGHLIGHTS Companies Commission of Malaysia @ CRF 2012 23
    • PS 6: Strengthening the Corporate Governance Structure in Relation to the Affairs of the Directorship of a Company Clarifying theHIGHLIGHTS relationship between the board of directors and shadow directors; Restructuring the rules abolishing the maximum age pertaining to the for directorship - Appointment appointment, resignation of directors will be based on and removal of directors. their qualifications & merits; Revising the residency requirement for directorship; and Companies Commission of Malaysia @ CRF 2012 24
    • PS 6: Strengthening the Corporate Governance Structure in Relation to the Affairs of the Directorship of a Company HIGHLIGHTSCodifying the requirement for remuneration of directors ofpublic companies to be sanctioned;Stricter rules relating to directors’ remuneration: - Members’ agreement will be required for remuneration of directors’ of public companies. - Members will have the right to inspect the contract of service for directors’ of public companies. - Only disinterested members can approve payment for loss of office for directors’ of public companies Companies Commission of Malaysia @ CRF 2012 25
    • PS 7 : Reinforcing The Roles of Company Secretary PS 8: Establishment of a Registration Regime for Practicing Company Secretaries HIGHLIGHTSPS 7: Reinforcing The PS 8: Establishment of a Roles of Company Registration Regime for Secretary Practicing Company Secretaries Retaining the appointment of qualified Introduction of a registration regime for company secretary as well as allowing company secretaries where all named company company directors to act as company secretaries will be required to be registered with secretary of private companies the Registrar But for public companies, appointment of For the purpose of monitoring mechanism, as qualified company secretary is mandatory not all members of the prescribed bodies render company secretarial services; Registrar is empowered to direct a company to appoint a qualified company secretary if To ensure the standards of professionalism and compliance is not observed competency remain high Companies Commission of Malaysia @ CRF 2012 26
    • PS 9: Integrating the Contents of the New Companies Act with the Notions & Elements of Corporate Responsibility HIGHLIGHTS Ratified UN Conventions relating to CR:Various laws relating to CR: UN Convention No. 8 & 11 Directors’ (Elimination of Environmental Law Discrimination against Report willEmployment Relations Law Women & Children’s Rights) Consumer Protection Labour Laws ILO Convention no. 138 cover (Minimum Age) additional matters Bursa Listing including Requirements – PLCs: Khazanah Nasional Berhad – GLCs: policies on Provide statement on CR activities in Annual Silver Book: Achieving internal Report – Rule 9.25 read Value through together with Item 29 of Corporate control & CR Appendix 9C Responsibility CURRENT FUTURE Companies Commission of Malaysia @ CRF 2012 27
    • PS 12: Reaffirming the Importance of Audited Financial Statements & the Timely Disclosure of such Information HIGHLIGHTS Expanding current provision on dividends payable from profits only by providing clarification on rules relating to “profits”. New provision will require companies to ensure that the payment of dividends will not result in negative impact on the financial situation of the company. Solvency test:  Immediately after the payment of dividend is made, the company is still solvent. Companies Commission of Malaysia @ CRF 2012 28
    • PS 14 : Simplifying, Refining & Expediting The Winding Up ProcessHIGHLIGHTS Shortening the Increasing the threshold for Preserving the time taken to wind up a statutory amount of assets of the debts to prevent company; company; abuse by creditors; Introducing and Refining the defining theconcept of undue parameters for preference exempttransactions; and dispositions. Companies Commission of Malaysia @ CRF 2012 29
    • Conclusion The new Companies Bill will revolutionise the way people do business in Malaysia. The overall new process and procedures to beintroduced coupled with the modern approaches in allaspects of corporate governance and reporting will add competitive dimensions in the new corporate legal framework for Malaysia. Companies Commission of Malaysia @ CRF 2012 30
    • THANK YOUCompanies Commission of Malaysia @ CRF 2012 31