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Company: Types of
1. Public company
2. Private company company
3. Exempt Private company
4. Foreign Company
5. Government link company
 Public Company
• Word “Bhd” at the end of name
• Can issue share to the public
• No maximum number of owner
• Limited liability
• No restriction to transfer share
vs Private company
• Word “sdn. Bhd” at the end of the
name
• Cannot issue share to the public
• Owner cannot exceed 50
• limited liability by shares
• Restricted to transfer share
Application for incorporation of
company
• Name of proposed company
• Types: Public or Private
• Nature of business
• Address of the registered office

Constitution:
1. Objects of the company
2. The capacity, rights ,powers of the directors
3. Comply with company act 2016
Public company: owner is the public

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Offer share to public

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Example of share; eg 500,000
Ordinary shares RM500,000
Types of share:
• Equity shares
• The right to vote
• Receive share of profits through the payment of dividend
• Mandatory to be issued
• The owner and bear all the risk eg no fixed dividend
• Known as Ordinary share capital eg 100,000 ordinary shares RM200,000

• Preference shares
• No voting right
• Fixed dividend eg 3% Preference share
• Priority dividend before equity shares
• Many types of preference shares eg 250,000 10% Preference shares RM1000,000
 Types of Preference share
• Non-cumulative preference & cumulative preference share
• Dividend can be /cannot be brought forward in case the company incur loss
for the current year

• Participating preference share & non participating Preference share

• Ability to receive more dividend when the company making huge
profit

• Convertible Preference share & non-convertible preference share

• Ability to convert the preference share to become ordinary shares eg
1:1 , 5:2 (5 unit preference share to 2 unit ordinary shares
Public issuance of shares
1.Company: Offer share to
the public eg advertise:
New company:Initial public
offering

2.Fill up the application form and pay on the amount asked

for
3. The company receive the application form and the
money and allot the share

4. The company may also incur the issuance cost such as

legal cost, printing cost and stamp duties
 Allotment process
• 1.Over subscribed : offer/issue < than applied
• Excess money will be refunded
• Eg issued 100,000 at RM 2 each
• Applied 200,000.Allotment pro rata eg 1:2

2. Fully subscribed: offer/issue =applied

Eg issue 200,000 Ordinary shares at RM2 each
Applied 200,000

3. Undersubscribed: offer/issue> applied

Eg issued 100,000 ordinary shares at rm1 each
Applied 80,000 units
Oversubscribed
• Received money and application form
• Dr. Bank xx
• Cr. Application xx
• Allotment of shares
• Dr. Application xx
Cr . Ordinary share Capital xx Allotment and refund
Dr.Application xxx
• Refund the excess money CR. Ordinary share capital xx
• Dr.Application xx Cr. Bank xx
• Cr. Bank xx
Undersubscribe
Issue 100,000 at RM 1 Dr.Bank 80k
each
• The end Cr. Application 80k

Applied 80,000
Dr. Application 80k
Cr. Ordinary share 80k
 The end

The end