CO LIMITED BY SHARES -Liability of members are limited to the amount unpaid on the shares taken up by them -2 types: private

co & public co -private limited co: restricts the right to transfer shares in the co limits the no of SH to fifty prohibits any invitation to the public to subscribe for any shares in, or debentures of, the co prohibits any invitation to the public to deposit any money in the co the name of a private co must include the word Sendirian may commence bus immediately upon issue of the certificate of incorporation by CCM. -public limited co can offer shares and debenture to the public and its shares are freely transferable to wait until a certificate to commence business is issued by CCM to commence bus can either be listed or non-listed Private limited co End with Sdn Bhd Certificate of incorporation X apply X issue prospectus X retire at 70 years old Rules in AOA Public limited co End with Bhd Certificate of bus commencement Must hold/ lodge report to CCM (in 1-3 months) Must issue prospectus/ statemt in lieu of prospectus Retire at 70 years old Sec128 of CA: can be removed by ordinary resolution

C H O I C E S O F B U S I N E S S E N T I T Y

SP No of mbr Ability to hold property Mbrs liability Mode of legal proceeding Duration/ dissolution Mgt Formation/ termination Income tax 1 person Bus assets are his assets Solely responsible. Unlimited In the name of SP. No legal entity. Dissolves if the owner dies SP Easy, cheap On owner

PS 2 - 20 2 - no limit for pro Partners own the assets collectively Collectively responsible. Unlimited No legal entity Based on PA -bankrupt, die ,insane Partners have right to manage Easy. Termination based on PA On respective partner

CO Public: 2 - no limit private: 2 - 50 Co possesses its own property Limited to the amount of capital invested Can sue/ be sued on its own name Perpetual succession. Dissolve accordance to CA Mbrs x manage. Appoint director to manage Winding up is costly/ complex On co itself

No of co Bus commencemt Statutory meeting Issue of shares Age limit of director Removal of director

CO LIMITED BY GUARANTEE -the liability of the mbrs is limited by the MOA to the amount which the mbrs have u/taken to contribute should the co be wound up. -usually formed for non-profit making purposes: trade assc, charitable body, social/ sport clubs -Sec 14A of the Act prohibits the formation of a co limited by guarantee with share capital

-exempt private co Characteristics: must not have more than twenty (20) members the shares must not be owned directly or indirectly by a corporation An exempt private company is exempted from: submitting it FS/ its annual return with CCM restrictions on loans to directors/ connected person sec133/ 133A BS/ P/L acc is to be prepared, but no need to submit to CCM The status of an exempt private company may be claimed if the annual return includes a certificate signed by a director of the co, the secretary and the auditor to the effect that: (I) the co is an exempt private company; (ii ) the c has tabled before its SH the audited acc at the AGM (iii )the co is able to meet its liabilities when they fall due. UNLIMITED CO -the mbrs liability for its debts is unlimited -when co is wound up, mbr is liable to contribute to an amount sufficient for pymt of its debts and liabilities. -possible to re-register unlimited co as a limited company & vice versa, but only once in the life of a company -is not required to file statutory acc with CCM unless it is a holding company or a subsidiary of a limited co HOLDING/ SUB CO wholly owned sub/ sub co -a co is deemed to be a sub if: H Co. controls the composition of the board of director of S Co. H Co. controls more than half of the voting powe rof S Co., or H Co. controls more than half of the issued share capital of S Co. or S Co. is a sub of any corporation which is also a subsidiary H Co. -H co may own all or part of the share capital of its S co but it is x regarded as the owner of the assets of the S unless there is an agreement in writing to that effect.

FOREIGN CO - Sec4 def a foreign company as: a co, corp, society, assc/ other body incorporated outside Malaysia an unincorporated, society, assc/ other body , which under the law of its place of origin may sue or be sued, or hold property in the name of the secretary or other officer of the body or association duly appointed for that purpose and which does not have its head office or principal place of business in Malaysia -Sec329 to 349 govern the actv of foreign co which has established a place of bus/ is carrying on bus in Msia & registered under the Act GROUP OF Cos/ RELATED CO -where a corp is: H of other corp, S of other corp, S of the H of another corp, they are deemed to be related & are collectively called the Group -importance of the classification as group: The requirement to publish group acc Sec5 requires consolidated group acc to be prepared for the group of co, combining the BS/ P/L acc of the H/S co to show the profit and solvency of the group as a single unit. giving financial assistance in the purchase of shares provisions on loans to directors do X apply when the loan is to a director of a sub co use sub to increase the level of limited liability afforded to the group as a whole. :eg: group valuable assets can be transferred to a non-trading group co or a high risk trading actv carried on within sub which has no other actv -H is x liable for the debts of S unless: it stands as a guarantor, participating in the carrying of the Ss bus with the intention to defraud creditors, H is the only mbr when Ss mbrship has remained below the statutory min for more than 6 months