5. crf india 2012 nor azimah abdul aziz
-
Upload
corporate-registers-forum -
Category
Business
-
view
641 -
download
1
description
Transcript of 5. crf india 2012 nor azimah abdul aziz
Companies Commission of Malaysia @ CRF 2012
REFORMING LEGISLATIVE ENVIRONMENT - A GLOBAL PERSPECTIVE
SSM’s Corporate Law Reform Programme: Revolutionising Doing
Business In Malaysia
By:Nor Azimah Abdul Aziz
DirectorCorporate Development & Policy Division
Companies Commission of Malaysia
Companies Commission of Malaysia @ CRF 2012
OVERVIEW
Background
Highlights of New Provisions to be introduced
Conclusion
2
Companies Commission of Malaysia @ CRF 2012
Corporate Law Reform Committee
(CLRC)
188Recommendations
19 Policy Statements
Established in Dec. 2003 to conduct a
comprehensive review of the Companies Act
Final Report was issued in 2008
comprising of 188 recommendations on wide-ranging aspects from incorporation to
winding-up
SSM accepted 183 out of the 188
recommendations. In June 2010 it became 19 policy statements
which are be the basis for the drafting
of the new Companies Bill
BACKGROUND
The 4 year review issued 12 Consultative
papers
3
Companies Commission of Malaysia @ CRF 2012
BACKGROUNDAPART FROM THE REVIEW ON CORE COMPANY LAW THAT WAS CONDUCTED BY THE CLRC, THE REFORM EXERCISE ALSO CONSIDERED:
1. Recommendations of theAccounting IssuesConsultative Committee(AICC) that was establishedin Feb 2010 to conduct afocused review on corporatefinancial reporting provisionsand to modernise theCompanies Act 1965 basedon the development of theapplicable approvedaccounting standards andglobal best practices;
2. Other developments in related laws (CapitalMarket and Conventional and IslamicFinancial & Banking legislation);
3. Recommendations by the World Bank’s Reporton the Observance of Standards and Codes(ROSC) Audit Oversight.
4. Recommendations based on the Report issuedby the OECD’s Peer Review Group (PRG) of theGlobal Forum on Transparency and Exchangeof Information for Tax purposes on Malaysia .
4
The recommendations are also parallel with theMalaysian Government’s Economic Transformation Programme (ETP)
Companies Commission of Malaysia @ CRF 2012
PS 1: Modernizing the Companies Act
Introduce a new legal framework applicable to allcompanies:
1. Simplify laws & procedures for companies based on private/public distinction and facilitating the growth of private companies; and
2. Remove obstacles &facilitating the growth ofprivate companies.
5
Companies Commission of Malaysia @ CRF 2012 6
POLICY STATEMENTSPOLICYSTATEMENT 2
Facilitating and modernizing entrance into the corporate sector 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.
PS 2: Facilitating & Modernizing Entrance into the Corporate Sector
Companies Commission of Malaysia @ CRF 2012 7
POLICY STATEMENTSPOLICYSTATEMENT 3
Migration to no par value regime
POLICY STATEMENT 4
Facilitating the management and restructuring of the 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.
PS 3: Migration to No Par Value RegimePS 4: Facilitating The Management & Restructuring
Of The Company’s Share Composition
Companies Commission of Malaysia @ CRF 2012 8
POLICY STATEMENTSPOLICY STATEMENT 5
Simplifying and facilitating internal decision making process by:• 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
PS 5: Simplifying & Facilitating Internal Decision Making Process
Companies Commission of Malaysia @ CRF 2012 9
POLICY STATEMENTSPOLICY STATEMENT 6
Strengthening the corporate governance structure in relation to 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
PS 6: Strengthening the Corporate Governance Structure in Relation to the Affairs of the Directorship of a Company
Companies Commission of Malaysia @ CRF 2012 10
POLICY STATEMENTSPOLICY STATEMENT 7
Reinforcing the roles, functions and obligations of the company secretaries.
POLICY STATEMENT 8
Establishment of a mandatory registration regime for practicing company secretaries
POLICY STATEMENT 9
Integrating the content of the new Companies Act with the notions and elements of corporate responsibility
POLICYSTATEMENT 10
Enhancement of shareholders’ rights and protection through:• 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
PS 7 : Reinforcing The Roles of Company SecretaryPS 8: Establishment of a Registration Regime for
Practicing Company SecretariesPS 9 & 10
Companies Commission of Malaysia @ CRF 2012 11
POLICY STATEMENTSPOLICY STATEMENT 11
Strengthening the corporate governance structure through 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
PS 11: Strengthening the Corporate Governance Structure Through Refinement of Auditors’ Role & Responsibilities
Companies Commission of Malaysia @ CRF 2012 12
POLICY STATEMENTSPOLICY STATEMENT 12
Reaffirming the importance of audited financial statements and the timely disclosure of such information.
POLICY STATEMENT 13
Strengthening good corporate governance practices through 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.
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
Companies Commission of Malaysia @ CRF 2012 13
POLICY STATEMENTSPOLICYSTATEMENT 14
Simplifying, refining and expediting the winding up process by:• 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
PS 14 : Simplifying, Refining & Expediting The Winding Up Process
Companies Commission of Malaysia @ CRF 2012
PS 15 : Modernising Insolvency Law By Introducing Alternative Corporate Rescue Mechanisms to
Revive Financially Troubled Companies
14
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 15
POLICY STATEMENTSPOLICYSTATEMENT 17
Refining the role of receivers/receiver managers by:• clarifying the status and power of receivers; and• introducing new provisions relating to liability, indemnity and
priority over receiver’s costs.
POLICY STATEMENT 18
Refining the current system of registration of charges by improving the procedures and process involved.
POLICY STATEMENT 19
Modernizing the enforcement regime by:• 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.
PS 17, 18 & 19
Companies Commission of Malaysia @ CRF 2012
Confer companies with full capacity of a
natural person & unlimited capacity to companies. This leads to the abolition of the
doctrine of constructive notice relating to object
clause
Companies may elect/decide to have their object clauses
subsequent to incorporation (BUT non-profit making CLBGs will still be
required to specify their objects)
Simplify name approval process
& making the process of name
reservation optional
PS 2: Facilitating & Modernizing Entrance into the Corporate Sector
16
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012
PS 2: Facilitating & Modernizing Entrance into the Corporate Sector
Fee to incorporate a company will be based on the type of companies
Fixed incorporation
fees:Company can be incorporated by only one member and that member can also be the director.
Single Member/Director
Company:
Easy Access to Incorporation:
17
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012
Removal of Obstacles toIncorporation Process:
PS 2: Facilitating & Modernizing Entrance into the Corporate Sector
Introduction of guaranteed name approval concept:
Name reservation isoptional. If namerequested is unavailable,Registrar may assign anysuch expressionfollowed by the numberassigned by the Registrar
Requirement for M & A at the point of incorporation will NOT be
required:
Company may adopt AAafter incorporation; andSome provision ofcurrent Table A willbecome substantivelaw.
18
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012
Introduce asingleinterfaceincorporationtemplate (viaa Super Form).
No more multiple forms [Form 6,Form 13A, Form 48A], no moreM&A and AA at the point ofincorporation.
M&A will be part of Super Form &Table A will become substantivelaw.
Promoter/shareholder /directormay incorporate a company.
19
PS 2: Facilitating & Modernizing Entrance into the Corporate Sector
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012
Leveraging onthe advent ofICT - by makingmandatory forincorporationdocuments tobe lodgedelectronically. Making the
requirementsfor certificatesof incorporationand companyseals optional.
No more over the counter transactionsMandatory electronic incorporation viaMyCoID. Replace the requirement for statutory
declaration with statement of compliancefor incorporation purposes. the requirements for certificate of
incorporation, Notice of incorporation isconclusive evidence. Company seals will become optional.
contracts or transactions will be executedby two directors. (For single director,company secretary must countersigned).
20
PS 2: Facilitating & Modernizing Entrance into the Corporate Sector
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 21
PS 3: Migration to No Par Value Regime
Companies will no longer be required
to state its authorised share
capital
The NPV regime will bring about
simplification of accounts where share
premium accounts and reserves will no
longer be applicable (a transitional period will be given to utilise the
amount standing in credit in the
company’s share premium accounts).
Companies will no longer be subjected
to lengthy and costly procedures to
increase share capital.
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 22
PS 4: Facilitating The Management & Restructuring Of The Company’s Share Composition
Companies will no longer be required to state its authorisedshare capitalReforming the policies relating to share buyback and financialassistance via introduction of solvency test provided that aspecial resolution is passed by its shareholders; and
Removing the limitation of share buyback transaction on stock exchange to allow treasury shares be sold by private treaty based on Bursa Listing Requirements
Introducing 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);
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 23
PS 5: Simplifying & Facilitating Internal Decision Making Process
Removing the mandatory requirement for private companies tohold Annual General Meeting:
HIGHLIGHTS
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
Clarifying the relationship between the board of directors and shadow directors;
abolishing the maximum age for directorship - Appointment
of directors will be based on their qualifications & merits;
Revising the residency requirement for directorship; and
Restructuring the rules pertaining to the
appointment, resignation and removal of directors.
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 25
PS 6: Strengthening the Corporate Governance Structure in Relation to the Affairs of the Directorship of a Company
Codifying 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
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 26
PS 7 : Reinforcing The Roles of Company SecretaryPS 8: Establishment of a Registration Regime for
Practicing Company Secretaries
PS 7: Reinforcing The Roles of Company
Secretary
Retaining the appointment of qualified company secretary as well as allowing company directors to act as company
secretary of private companies
But for public companies, appointment of qualified company secretary is mandatory
Registrar is empowered to direct a company to appoint a qualified company secretary if
compliance is not observed
PS 8: Establishment of a Registration Regime for
Practicing Company Secretaries
Introduction of a registration regime for company secretaries where all named company secretaries will be required to be registered with
the Registrar
For the purpose of monitoring mechanism, as not all members of the prescribed bodies render
company secretarial services;
To ensure the standards of professionalism and competency remain high
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012
Various laws relating to CR:Environmental Law
Employment Relations LawConsumer Protection
Labour Laws
Ratified UN Conventions relating to CR:
UN Convention No. 8 & 11 (Elimination of
Discrimination against Women & Children’s Rights)
ILO Convention no. 138 (Minimum Age)
Bursa Listing Requirements – PLCs:
Provide statement on CR activities in Annual
Report – Rule 9.25 read together with Item 29 of
Appendix 9C
Khazanah NasionalBerhad – GLCs:
Silver Book: Achieving Value through
Corporate Responsibility
Directors’ Report will
cover additional
matters including
policies on internal
control & CR
CURRENT FUTURE
PS 9: Integrating the Contents of the New Companies Act with the Notions & Elements of Corporate Responsibility
27
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 28
PS 12: Reaffirming the Importance of Audited Financial Statements & the Timely Disclosure of such Information
Expanding current provision on dividends payable from profitsonly by providing clarification on rules relating to “profits”.
New provision will require companies to ensure that thepayment of dividends will not result in negative impact on thefinancial situation of the company.
Solvency test:
Immediately after the payment of dividend is made, thecompany is still solvent.
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 29
PS 14 : Simplifying, Refining & Expediting The Winding Up Process
Shortening the time taken to
wind up a company;
Increasing the threshold for
statutory amount of debts to prevent
abuse by creditors;
Preserving the assets of the
company;
Refining the concept of undue
preference transactions; and
Introducing and defining the
parameters for exempt
dispositions.
HIGHLIGHTS
Companies Commission of Malaysia @ CRF 2012 30
Conclusion
The new Companies Bill will revolutionise the way people do business in Malaysia.
The overall new process and procedures to be introduced coupled with the modern approaches in all aspects of corporate governance and reporting will add
competitive dimensions in the new corporate legal framework for Malaysia.
Companies Commission of Malaysia @ CRF 2012
THANK YOU
31