COMPANY

LAW
 Topics

Formation of
company
Company’s
management:
White collar
duties and crime
liabilities of
company directors
Whistle and
blowing
 DEFINITION

A company is a legal entity formed by a

group of individuals to engage in and operate
a business—commercial or industrial—
  enterprise.
Companies in Malaysia are governed by the
Companies Act, 2016.
  Ex: Sole  proprietor and  partnership
 

Unlimited  liability

Type of 
companies Public limited  company

Limited  liability
Private limited  company
Business Types
 Business Types

Private
limited
Sole company
proprietorship.
Partnership

Limited
Liability Public
Partnership Limited
Company
 separate legal
entity from its
owners, which
implies that
shareholders have
limited liability • company's
and are only liable shares are sold
for corporate to the general
obligations up to public.
the amount
invested and the • country's stock
funds in the firm exchange
market
 The company has to be owned by
one

One owner who is

The owner enjoys personally responsible
profits.
Sole
proprietorship.

Malaysian citizen or a permanent

Started easily resident
unlimited number of
partners.
Limited
Liability
Partnership

prevents the partner' personal assets from being used to pay

business debts and liabilities.
 Malaysian citizen or a
permanent resident

Partnership

Owned by two or more most suitable for

individuals with a professional firms such as
maximum amount of 20 auditors and lawyers.
partners.
 Prevents the partners' personal assets
from being used to pay business debts
and liabilities.

Limited
Liability Governed under the 
Limited Liability Partners
Partnership hips Act 2012

The LLP combines the characteristics of a

conventional partnership and a limited
liability company (LLC).
 Common type of business among foreign
owners as they are allowed to register

Sendirian Berhad
(Sdn Bhd)

Private
limited
company

shareholders are accountable

for the debts the company
incurs.
shares can be held by the public

required to publicly report their

financial statements

Public Limited
Company
Berhad (Bhd) is a public limited company

at least 2 directors are needed. It is also governed

by Bursa Malaysia Securities Berhad and the 
Security Commission of Malaysia. 
In terms of requirements, the following information is needed to for the business
registration of any of these companies in Malaysia:
 Proposed company name

Business type

Registered office address

Business address

Either a private or public company

Details of directors(s)

Declaration from directors(s)

Paid-up capital (minimum of RM1)

Declaration of compliance from

individuals responsible for the
incorporation
When all steps are completed, SSM will issue
a certificate of registration.
he doctrine of separate legal personality simply means that a company is a separate entity from its members,

Lifting the corporate veil

ne has been abused to allow the individuals i.e. the directors, controllers and/or shareholders to hide behind the corporate veil
bligations. In these instances, the corporate veil could therefore be lifted.

of separate legal personality does not

  apply to the following types of business structures

e the company is used for fraudulent purposes, the corporate veil will be lifted.[There must be evidence of actual
conduct amounting to fraud in equity to justify the lifting of the corporate veil
In Company Law, the doctrine of separate legal personality simply means that a company is a
separate entity from its members,
DIRECTOR
 Who is director?

S.4 Companies S.122(2):

S.122(1):Require
Act 1965 Qualifications &
ment for
disqualifications
directors

at least two directors human, of full age &

someone elected or
who each has his capacity (no other
appointed to manage
principal or only positive qualifications
a company's business
place of residence are prescribed).
and affairs.
within Malaysia.
 Duties of directors

duty to display
Fiduciary duties skill, standard of act in good faith
company's constitution
care & Interest of the
Honestly, no conflict
organisation
of interest reasonable Follow the company's
diligence
Knowledge,skills constitution

Avoid
conflicts of
interest 

Exercise
independent
judgment
A Company Secretary is responsible for the efficient administration of a company, particularly with regard to
ensuring compliance with statutory and regulatory requirements and for ensuring that decisions of the board
of directo
rs are implemented
 a person, company, or institution that owns at least one share of a
company's stock or in a mutual fund.
 •A whistleblower is an employee, former employee, or  member of an
organization, especially a business or  government agency, who
reports misconduct to people or  entities that have the power and
presumed willingness to  take corrective.
•
Generally the misconduct is a violation of law, rule,  regulation and/or a
direct threat to public interest, such  as fraud, health/safety violations, and
 
corruption .
 Kinds Of Whistle Blowing
Personal
Internal Impersonal

lowing the
whiste on the
offender, here
who report the charge is
not against the External
misconduct
organization or Whistle
on a fellow
system but Blowing.
employee or
against one
superior individual .
within their
company.
 Whistleblowing Benefits
 Whistleblowing leads to good and bad results. First, the benefits  of carefully
considered whistleblowing can lead to the end of  unethical business practices . The
lives of individuals and whole  communities have been saved by whistleblowers .

 The actions of whistleblowers are potentially beneficial to  society . Businesses that
engaged in unethical practices have  been shut down because of the actions of
whistleblowers .

 
 How To Blow The Whistle ?

Do it anonymously Do it in a group
Present just the evidence
 Whistleblower
Protection Act 2010
Legislative protection in Malaysia of whistleblowers is not an entirely new concept.
Legislation mandating personnel to disclose the existence of offences involving fraud or
dishonesty, and the attendant legal protections, already exist in certain sectors.

The Whistleblower Protection Act 2010 (“WPA”), which came into force on 15 December
2010, is intended to provide all-encompassing protection to the private and public sectors.
One of the WPA’s key objectives is to fill in the gaps left by the said sectoral-specific
legislation.

The Malaysian Parliament provides protection for whistleblowers through a few Acts of
Parliament.

A. Companies Act 1965 (Act 125) and Capital Services Act 2007 (Act 671)
B. Whistleblower Protection Act 2010 (Act 711)
 Are Whistleblowers Honoured as Heroes?

doubt their loyalty .

traitors

someone who
has damage

NO
the firm – the
working
family to
which he/she
belongs .
 White collar crime
 White-collar crime is a crime committed by a respectable and high-status job.
 Government officials or managers of an organization or a company abusing public money for its own sake .

3 main causes of white-collar crime:

Situational
Opportunities to pressures on the
commit crime, individuals,

Issues pertaining
to integrity.
 Example of white collar crime

-Sect. 415 to 420, Penal Code

-Deliberate deception to secure unfair or unlawful gain.
-2 types of fraud, civil wrong and criminal wrong.
-For example, a fraud victim may sue the fraud perpetrator to avoid the fraud and
recover monetary compensation.
-and a criminal wrong (example fraud perpetrator may be prosecuted and
imprisoned by governmental authorities)

- Anti-Corruption Act 1997

-Bribery is the offer or acceptance of anything of value in exchange for influence on
a government/public official or employee. Bribes can take the form of gifts or
payments of money in exchange for favourable treatment, such as awards of
government contracts. Other forms of bribes may include property, various goods,
privileges, services and favours

- Sect. 405 to 409, Penal Code

- An act by a trustee that is not authorised either by the trust document or by law. For
example, a breach of trust can occur if a trustee:
-Distributes trust assets to a beneficiary who is not entitled to them under the terms of the
trust document.
-Invests the trust fund in a way not permitted by his express or statutory powers of
investment.
WIndInG uP
The process of closing  process of bringing
down a line of business,
RM50,000 an end to a company
 company's assets are
whether it's just a product
sold off and then used to
ine or an entire business
pay off the company's
entity. 
debts

• compulsory (by
court order) and
voluntary

 Members voluntary
winding up
THANKS FOR LISTENIN
 Supervisor Karim orders newly-hired worker Juan to complete task in a hurry.
Juan: I can’t complete the task without a harness and safety helmet.
Karim : a harness and safety helmet isn’t needed because he can complete the task very quickly and the risk is small.
Three co-workers (Fred, Mary, Moe) tell Juan to hurry up and do what the boss says; he’s
holding up the job.
Juan :
“I know I can do this quickly once I put on my harness and safety helmet.” “I know you’re in a hurry. An accident will just slow
things down; better safe than sorry.” “I’ll get to it just as soon as you show me where the harnesses and safety helmet are.”
“My family is expecting me to come home from work today, so I have to put on a harness and safety helmet.”

Scenario continues:
Juan doesn’t know how to put on the harness properly. When he asks co-workers, they say they are too busy to help him. When
Juan asks Karim for help, Karim responds
that Juan had best do the job without the harness or he will fire him.

1. What should Juan do? 10 marks

2. What would be your advice for Juan if he gets fired from Karim? 10 marks