MALAYSIA Law and Practice Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
1. Introductory 1.1 Forms of Corporate/Business Organisations
sia” ) (the “Listing Requirements” ) are an essential source of corporate governance. These require - ments cover areas such as corporate reporting, the composition of the board of directors (the “Board” ) and the necessary approvals for major corporate decisions. Adherence to these rules is crucial for maintaining market integrity and protecting investors. Additionally, the Malaysian Code on Corporate Governance (MCCG), introduced by the Securi - ties Commission Malaysia (SC), offers a set of guidelines that promote transparency, integrity and strong governance practices within compa - nies. While not mandatory, listed companies are expected to comply with the code or provide a rationale for any deviations. Finally, companies must also reference various guidelines and circulars issued by regulatory bodies such as the Companies Commission of Malaysia (CCM), Bursa Malaysia and the SC. These documents provide updates and detailed instructions, ensuring that companies align with evolving governance standards. Such dynamic governance mechanisms are particularly vital in an era of heightened investor scrutiny, environ - mental expectations and global business com - plexity. 1.3 Corporate Governance Requirements for Companies With Publicly Traded Shares Corporate Governance for Publicly Traded Companies Public listed companies in Malaysia are traded on Bursa Malaysia, which operates three distinct markets: the main market, the ACE market and the LEAP market. The main market is designed for established, large-scale companies, the ACE market targets fast-growing companies and the LEAP market focuses on smaller, emerging
In Malaysia, there are seven primary forms of corporate or business organisations, each with distinct legal and regulatory requirements, as well as advantages and limitations. These forms include: • sole proprietorship; • general partnership; • limited liability partnership (LLP); • private limited company (also known as Sendirian Berhad or Sdn Bhd); • public limited company (also known as Ber- had or Bhd); • company limited by guarantee; and • foreign company. The choice of structure depends on various factors, including the nature of the business, its size, the objectives of the business and the pref - erences of the owners. 1.2 Sources of Corporate Governance Requirements In Malaysia, the Companies Act 2016 ( “CA 2016” ) serves as the principal legislation gov - erning the management and operation of com - panies. It outlines essential provisions regarding the roles and responsibilities of directors, share - holders’ rights and the operational procedures for corporate decision-making. CA 2016 applies to all companies registered in Malaysia, ensuring proper management and accountability. Beyond CA 2016, corporate governance in Malaysia is also shaped by a robust framework of regulatory and voluntary guidelines. For public listed companies, the listing requirements set by Bursa Malaysia Securities Berhad ( “Bursa Malay-
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