Return of allotment
(1) Where a Langkawi company makes any allotment of its shares, the company shall make a return of the allotment stating—
(a) the number of shares comprised in the allotment and the amount paid for such shares;
(b) the date of allotment;
(c) the amount (if any) deemed to be paid, or due and payable, on the allotment of each share;
(d) where the capital of the company is divided into shares of different classes, the class of shares to which each share in the allotment belongs; and
(e) the full name and address of each of the allottees and the number and class of shares allotted to him.
(2) The return under subsection (1) shall be kept at the registered office of the Langkawi company.
(3) The Registrar may, as the circumstances deem necessary by written notice, require a Langkawi company to lodge with the Registrar a return in respect of any allotment of its shares.
(4) If default is made in complying with this section, every officer of the Langkawi company who is in default shall be guilty of an offence against this Act.
Penalty: Five thousand ringgit. Default penalty.
Calls
A Langkawi company may—
(a) make arrangements, on the issue of shares, for varying the amounts and times of payment of calls as between shareholders;
(b) accept from any member the whole or any part of the amount remaining unpaid on any shares although no part of that amount has been called up; and
(c) pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
Reserve liability
A Langkawi company may, by special resolution, determine that any portion of its uncalled share capital shall not be capable of being called up except in the event of the company being wound up, but no such resolution shall prejudice the rights acquired by any person before the passing of the resolution.
Share premium account
(1) Where a Langkawi company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account to be called the “share premium account”, and the provisions of this Act relating to the reduction of the share capital of a Langkawi company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.
(2) Where assets are acquired by the issue of shares of a Langkawi company and no consideration is recorded, the assets so acquired shall be valued, and if the value of the assets is more than the par value of such shares, the difference between the par value of the shares and the value of the assets so acquired shall be transferred to the share premium account.
(3) The share premium account may, notwithstanding anything contained in subsection (1), be applied by the Langkawi company—
(a) in paying up unissued shares to be issued to members of the company as fully paid bonus shares;
(b) in writing off—
(i) the preliminary expenses of the company; or
(ii) the expenses of, or the commission paid or discount allowed on, any issue of shares in, or debentures of, the company; or
(c) in providing for the premium payable on redemption of debentures or redeemable preference shares.
(4) Where shares are issued for a consideration other than cash under subsection (2), the shares shall not be allotted until—
(a) the undertaking constituting the consideration has been performed; or
(b) the assets constituting the consideration have been transferred to the company; and assets shall be considered as transferred to a company—
(i) in the case of goods, when the ownership or property therein passes to the company or when they are delivered to it;
(ii) in the case of negotiable instruments, when the company becomes entitled to enforce all the rights embodied in them in its own name without the concurrence of any other person; and
(iii) in any other case, when the ownership or lesser rights agreed to be vested in the company are legally vested in it.
Power to issue shares and voting rights
(1) A Langkawi company shall have power to issue the number of shares stated in its memorandum, which may be divided into one or more classes, with such designations, preferences,
limitations and relative rights as shall be stated or provided for in the articles of association, and all prices and values given in respect of shares shall be expressed in a currency other than Malaysian currency.
(2) The articles of association may limit or deny voting rights of, or provide special voting rights for, the shares of any class or the shares within any class to any extent not inconsistent with the provisions of this Act or the regulations.
Dealing by a Langkawi company in its own shares, etc.
(1) A Langkawi company may provide financial assistance, whether directly or indirectly, for the purpose of or in connection with the purchase of its own shares or the shares of any of its subsidiaries or of its holding company—
(a) where the transaction has been approved by a special resolution of the company, and the directors have certified to the meeting, in writing, to the effect that there are no reasonable grounds for believing that—
(i) the company is, or would after giving the financial assistance be, insolvent; or
(ii) the realizable value of the company’s assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, would, after giving the financial assistance or loan, be less than the aggregate of the company’s liabilities and stated capital; or
(b) to employees (other than an employee who is also a director ) of the company or of any of its subsidiaries or of its holding company.
(2) A Langkawi company may purchase, take, receive or otherwise acquire, hold, own, pledge, transfer or otherwise dispose of its own shares, or the shares of any of its subsidiaries or of its holding company, but the purchases thereof, whether direct or indirect, shall be made only to the extent of unreserved and unrestricted earned surplus available therefor; and if the articles of
association so provide, or with the affirmative votes of the holders of at least three-fourths of all shares entitled to vote thereon, to the extent of unreserved and unrestricted capital surplus available therefor.
(3) Notwithstanding subsection (2), provided that there are no reasonable grounds for believing that the company is, or would after the payment be, insolvent or that the realizable value of the company’s assets would, after the payment, be less than the aggregate of its liabilities and stated capital, a Langkawi company may purchase or otherwise acquire its own shares for the purposes of—
(a) eliminating fractional shares;
(b) paying dissenting shareholders entitled to payment for their shares under the provisions of this Act or the regulations; or
(c) effecting, subject to this Act, the retirement of its redeemable shares by redemption or by purchase at a price not exceeding the redemption price.
Cancellation of reacquired shares by a Langkawi company
A Langkawi company may at any time, by resolution of its directors, cancel all or any part of the shares of the company of any class reacquired by it, other than redeemable shares redeemed or purchased, and in such event a statement of cancellation shall be lodged with the Registrar within thirty days from the date of cancellation.
Issue of shares at a discount
(1) Subject to this section, a Langkawi company may issue at a discount shares of the company of a class already issued.
(2) No shares shall be issued at a discount without the prior written approval of the Registrar.
(3) An application to issue shares at a discount shall be made to a management entity, and shall be accompanied with the names and addresses of all members together with notices
addressed to those members notifying them of the proposed issue and specifying the maximum rate of discount at which the shares are to be issued.
(4) The management entity to which the application is made shall, upon receipt of the application and the notices, despatch those notices and inform the members to whom they are addressed that any objection must be conveyed so as to be received by the management entity within forty-two days from the date of the notice.
(5) On the expiry of sixty days from the date of despatch of the notices referred to in subsection (3), the management entity shall lodge the application, together with any objections received by it, with the Registrar.
(6) Where any such application is made, the Registrar may, if having regard to the circumstances of the case and any objections, he thinks it proper so to do, approve the issue on such terms and conditions as he thinks fit.
Alteration of share capital
(1) A Langkawi company may, by special resolution, alter the conditions of its memorandum and articles of association in any one or more of the following ways:
(a) increasing its share capital by the creation of new shares of such amount as it thinks expedient;
(b) consolidating and dividing all or any of its share capital into shares of larger amount than its existing shares;
(c) subdividing its shares or any of them into shares of smaller amount than is fixed by the memorandum and articles of association, so however that in the subdivision the proportion between the amount paid and the amount (if any) unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived;
(d) converting all or any of its paid-up shares into stock and reconverting that stock into paid-up shares of any denomination;
(e) cancelling shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any persons, and diminishing the amount of the share capital by the amount of the shares so cancelled;
(f) redenominating the currency of any shares by the conversion of shares denominated in one currency to the same number of shares of another currency, with the prior written consent of the creditor, if any.
(2) A redenomination of the currency of any shares under paragraph (1)(f) shall be deemed not to effect a cancellation of the existing shares and the issue of fresh shares.
(3) A cancellation of shares under paragraph (1)(e) shall not be deemed to be a reduction of share capital within the meaning of this Act.
(4) Where, under subsection (1), a Langkawi company has increased its share capital beyond the capital stated in its memorandum by shares of a fixed amount, it shall, within one month after the passing of the resolution authorizing the increase, cause to be lodged with the Registrar a notice in the prescribed form of the increase.
(5) If any Langkawi company fails to comply with the provisions of subsection (4), the company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: Five thousand ringgit. Default penalty.
Validation of shares improperly issued
Where a Langkawi company has purported to issue or allot shares, and the issue or allotment of those shares was invalid by reason of any provision of this Act or of the memorandum or articles of association of the company or otherwise, or the terms of issue or allotment were inconsistent with or unauthorized by any such provision, the Court may, upon an application being lodged with it by the company or by a holder or mortgagee of any of those shares or by a creditor of the company, and upon being satisfied that in all the circumstances it is just and equitable so to do, make an order validating the issue or allotment of those
shares, or confirming the terms of issue or allotment thereof, or both, subject to such conditions, if any, as it may impose, and upon such order being made and a copy of the order being lodged by the company or by such holder, mortgagee or creditor with the Registrar, those shares shall be deemed to have been validly issued or allotted upon the terms of issue or allotment thereof as varied by the conditions, if any, imposed by the Court.
Special resolution for reduction of share capital
(1) Subject to confirmation by the Court, a Langkawi company may, if so authorized by its articles of association, by special resolution reduce its share capital in any way and in particular, without limiting the generality of the foregoing, may—
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up;
(b) cancel any paid-up capital which is lost or unrepresented by available assets; or
(c) pay off any paid-up share capital which is in excess of the needs of the company, or which it is otherwise in the interests of the company as a whole to have paid off,
and may, so far as necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
(2) Where the proposed reduction of share capital involves the diminution of liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, and in any other case if the Court so directs—
(a) every creditor of the Langkawi company who, at the time fixed by the Court, is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, shall be entitled to object to the reduction;
(b) the Court, unless satisfied by statutory declaration by the directors that there are no such creditors, shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their
debts or claims, and may publish notices fixing a final day on or before which creditors not entered on the list may claim to be so entered; and
(c) where a creditor entered on the list whose debt or claim is not discharged or has not been determined does not consent to the reduction, the Court may dispense with the consent of that creditor on the Langkawi company securing payment of his debt or claim by appropriating, as the Court directs—
(i) if the company admits the full amount of the debt or claim or, although not admitting it, is willing to provide for it, the full amount of the debt or claim; or
(ii) if the company does not admit, and is not willing to provide for it, the full amount of the debt or claim, or if the amount is contingent or not ascertained, an amount fixed by the Court after the like inquiry and adjudication as if the company were being wound up by the Court.
(3) Notwithstanding the provisions of subsection (2), the Court may, having regard to the circumstances of the case, direct that all or any of the provisions of that subsection shall not apply as regards any class of creditors.
(4) The Court, if satisfied with respect to every creditor who under subsection (2) is entitled to object, that either his consent to the reduction has been obtained, or his debt or claim has been discharged or has been determined or has been secured, may make an order confirming the reduction on such terms and conditions as it thinks fit, and may require the Langkawi company to publish as the Court directs the reasons for the reduction or such other information as the Court thinks expedient, and, if the Court thinks fit, the causes which led to the reduction.
(5) An order made under subsection (4) shall show the amount of the share capital of the Langkawi company as altered by the order, the number of shares into which it is to be divided and the amount of each share and the amount, if any, at the date of the order, deemed to be paid up on each share.
(6) On the lodging of an office copy of the order with the Registrar, the resolution for reducing share capital as confirmed by the order so lodged shall take effect.
(7) The certificate of the Registrar shall be conclusive evidence that all the requirements of this Act with respect to reduction of share capital have been complied with and that the share capital of a Langkawi company is as stated in the order.
(8) On the lodging of the copy of the order, the particulars shown in the order pursuant to subsection (5) shall be deemed to be substituted for the corresponding particulars in the memorandum, and such substitution and any addition ordered by the Court to be made in the name of the Langkawi company shall (in the case of any addition to the name, for such period as is specified in the order of the Court) be deemed to be an alteration of the memorandum for the purposes of this Act.
(9) A member, past or present, shall not be liable in respect of any share to any call or contribution exceeding in amount the difference between the amount of the share as fixed by the order and the amount paid, or the reduced amount which is to be deemed to have been paid on the share, as the case may be, but where any creditor entitled to object to the reduction is, by reason of his ignorance of the proceedings for reduction, or of their nature and effect upon his claim, not entered on the list of creditors, and after the reduction the Langkawi company is unable, within the meaning of the provisions of this Act with respect to winding up by the Court, to pay the amount of his debt or claim—
(a) every person who was a member of that Langkawi company at the date of the lodging of the copy of the order of the Court for reduction shall be liable to contribute for the payment of that debt or claim to an amount not exceeding that which he would have been liable to contribute if the company had commenced to be wound up on the day before that date; and
(b) if that Langkawi company is wound up, the Court, on the application of any such creditor and proof of his ignorance of the proceedings for reduction or of their nature and effect upon his claim, may settle a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list,
as if they were ordinary contributories in a winding up,
but nothing in this subsection shall affect the rights of the contributories among themselves.
(10) Any officer of a Langkawi company who—
(a) wilfully conceals the name of any creditor entitled to object to the reduction;
(b) wilfully misrepresents the nature or the amount of the debt or claim of any creditor; or
(c) aids, abets or is party to any such concealment or misrepresentation,
shall be guilty of an offence against this Act.
Penalty: Ten thousand ringgit.
Rights of holders of preference shares to be set out in articles of association
(1) No Langkawi company shall allot a preference share, or convert an issued share into a preference share, unless there is set out in its articles of association the rights of the holder of such a share with respect to the repayment of capital, participation in surplus assets and profits, cumulative or non-cumulative dividends, voting and priority of payment of capital and dividend in relation to other shares or other classes of preference shares.
(2) The issue by a Langkawi company of preference shares ranking pari passu with existing preference shares issued by the company shall be deemed to be a variation of the rights attached to those existing preference shares unless the issue of the firstmentioned shares was authorized by the terms of issue of existing preference shares or by the articles of association in force at the time the existing preference shares were issued.
(3) If default is made in complying with this section, the Langkawi company and every officer of the company who is in default shall be guilty of an offence against this Act.
Redeemable preference shares
(1) Subject to this section, a Langkawi company having a share capital may, if so authorized by its articles of association, issue preference shares which are, or at the option of the company are to be, liable to be redeemed and the redemption shall be effected only on such terms and in such manner as are provided by the articles of association.
(2) The redemption shall not be taken as reducing the amount of authorized share capital of the company.
(3) The shares shall not be redeemed—
(a) except out of profits which would otherwise be available for dividend, or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; and
(b) unless they are fully paid up.
(4) The premium, if any, payable on redemption shall be provided for out of profits or the share premium account before the shares are redeemed.
(5) Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have been available for dividend, be transferred to a reserve called the “capital redemption reserve” a sum equal to the nominal amount of the shares redeemed, and the provisions of this Act relating to the reduction of the share capital of a Langkawi company shall, except as provided in this section, apply as if the capital redemption reserve were paid-up share capital of the company.
(6) Where, in pursuance of this section, a Langkawi company has redeemed, or is about to redeem, any preference shares, it may issue shares up to the nominal amount of the shares redeemed or to be redeemed as if those shares had never been issued, and accordingly the share capital of the company shall not, for the purposes of any fee under this Act, be deemed to be increased by such issue, but where new shares are issued before the redemption of the old shares, the new shares shall not, so far as it relates to any fee under this Act, be deemed to have
been issued in pursuance of this subsection unless the old shares have been redeemed within one month after the issue of the new shares.
(7) The capital redemption reserve may be applied in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.
(8) If a Langkawi company redeems any redeemable preference shares, it shall, within one month after so doing, give notice thereof to the Registrar specifying the shares redeemed.
Restriction on inviting investments from public
(1) A Langkawi company shall not make any offer or issue any invitation to the public to subscribe for or purchase any shares of or interest in the company except where the offer or invitation relates to shares or interest which entitles the holder of its shares and interest the right to use or enjoy any yacht-related recreational or holiday activities or facilities.
(2) The provisions of Divisions 1 and 5 of Part IV of the Companies Act 1965 shall apply in relation to any offer or invitation made by a Langkawi company to the public to subscribe for or purchase its shares or interest as if the offer or invitation to the public is made by an unlisted recreational club, subject to such modifications as the Minister may make by order to be consistent with the intent and purposes of this Act, and in particular references to a “company” shall be taken as references to a Langkawi company.
(3) For the purposes of this section—
“unlisted recreational club” means a corporation which provides the holder of its shares the right to use or enjoy any yacht-related recreational or holiday activities or facilities and whose shares are not listed or proposed to be listed for quotation on any stock market of a stock exchange;
“interest” means any right to participate or interest, whether enforceable or not and whether actual, prospective or contingent in any time-sharing scheme or investment contract, whether or
not the right or interest is evidenced by a formal document and whether or not the right or interest relates to a physical asset, but does not include—
(a) any share in or debenture of a corporation; or
(b) any interest in a partnership agreement unless the agreement—
(i) relates to an undertaking, scheme, enterprise or investment contract promoted by, or on behalf of, a person whose ordinary business is or includes the promotion of similar undertakings, schemes, enterprises or investment contracts, whether or not that person is a party to the agreement; or
(ii) is an agreement, or is within a class of agreements, prescribed by regulations for the purposes of this paragraph;
“investment contract” means any contract, scheme or arrangement which in substance and irrespective of the form thereof entitles the investor to a right to use or enjoy any yacht-related recreational or holiday activities or facilities for a consideration and for a duration of not less than twelve months whether or not on a recurring basis;
“modification” includes amendment, adaptation, alteration, variation, addition, division, substitution or exclusion;
“time-sharing scheme” means a scheme, undertaking or enterprise—
(a) in which participants are, or may become, entitled to use, occupy or possess, for two or more periods during the period for which the scheme, undertaking or enterprise, whether in Malaysia or elsewhere is to operate, a yacht to which the scheme, undertaking or enterprise relates; and
(b) that is to operate for a period of not less than three years.
Division 2 — TITLE AND TRANSFERS
Nature of shares
The share or other interest of any member in a Langkawi company shall be movable property, transferable in the manner provided by the articles of association, and shall not be of the nature of immovable property.
Numbering of shares
(1) Each share in a Langkawi company shall be distinguished by its appropriate number.
(2) Notwithstanding subsection (1)—
(a) if at any time all the issued shares in a Langkawi company, or all the issued shares therein of a particular class, are fully paid up and rank pari passu for all purposes, none of those shares need thereafter have a distinguishing number so long as it remains fully paid up and ranks pari passu for all purposes with all shares of the same class for the time being issued and fully paid up; or
(b) if all the issued shares in a Langkawi company are evidenced by certificates in accordance with section 50 and each certificate is distinguished by its appropriate number and that number is recorded in the register of members, none of those shares need have a distinguishing number.
Certificate to be evidence of title
(1) A certificate, under the seal of a Langkawi company or any branch of the company, specifying any shares held by a member shall be prima facie evidence of his title to the shares.
(2) Every share certificate shall be under the seal of the Langkawi company or a branch of the company and shall state—
(a) the name of the company and the authority under which the company is constituted;
(b) the address of the registered office of the company in Langkawi or, where the certificate is issued by a branch of the company, the address of that branch;
(c) the nominal value and the extent to which the shares are paid up; and
(d) the class of the shares.
(3) Failure to comply with this section shall not affect the rights of any holder of shares.
(4) If default is made in complying with this section, the Langkawi company and every officer of the company who is in default shall be guilty of an offence against this Act.
Langkawi company may have share seal
A Langkawi company may, if authorized by its articles of association, have a seal which shall have on its face the name of the company and the words “Share Seal”, and a share certificate under such seal shall be deemed to be sealed with the common seal of the company for the purposes of this Act.
Instruments of transfer and transfer by personal representative
(1) A Langkawi company shall not register a transfer of shares or debentures unless a proper instrument of transfer has been delivered to the company, but this subsection shall not prejudice any power to register as a shareholder or debenture holder any person to whom the right to any shares in, or debenture of, the company has been transmitted by operation of law.
(2) A transfer of the share, debenture or other interest of a deceased person made by his personal representative shall, although the personal representative is not himself a member of the company, be as valid as if he had been such a member at the time of the execution of the instrument of transfer.
(3) The production to a Langkawi company of any document which is by law sufficient evidence of probate of the will, or letters of administration of the estate, of a deceased person having
been granted to some person shall be accepted by the company, notwithstanding anything in its articles of association, as sufficient evidence of the grant.
(4) In this section, “instrument of transfer” includes a written application for transmission of a share, debenture or other interest to a personal representative.
Duties of Langkawi company with respect to issue of certificate
(1) Every Langkawi company shall, within two months after the allotment of any of its shares or debentures, and within one month after the date on which a transfer (other than such a transfer as the company is, for any reason, entitled to refuse to register and does not register) of any of its shares or debentures is lodged with the company, complete and have ready for delivery all the appropriate certificates and debentures in connection with the allotment or transfer, unless the conditions of issue of the shares or debentures otherwise provide.
(2) If default is made in complying with this section, the Langkawi company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: Five thousand ringgit. Default penalty.
(3) If a Langkawi company on which a notice has been served requiring it to make good any default in complying with the provisions of this section fails to make good the default within twenty-one days after the service of the notice, the Court may, on the application of the person entitled to have the certificate for the shares or debentures delivered to him, direct the company and every officer of the company to make good the default within such time as is specified in the direction, and the direction may provide that all costs and expenses of and incidental to the application shall be borne by the company and by any officer of the company in default in such proportion as the Court thinks fit.
Division 3 — REGISTER OF CHARGES
Non-application of Division
Nothing in this Division shall apply to a charge created by a Langkawi company or foreign Langkawi company on property outside Malaysia.
Register of charges
(1) Every Langkawi company or foreign Langkawi company shall keep at its registered office a register of charges and shall enter in it all charges specifically affecting the property of the company within one month after the creation of such charges, giving in each case a short description of the property charged, the amount secured by the charge, the names of the chargees or persons entitled to such charge, and particulars relating to the satisfaction of or release from such charge.
(2) If any property of a Langkawi company or foreign Langkawi company is charged without such entry as required by subsection
(1) being made, every officer of the company who knowingly and wilfully authorizes or permits the omission of such entry shall be guilty of an offence against this Act.
Penalty: Ten thousand ringgit.
(3) Every Langkawi company or foreign Langkawi company shall cause a copy of every instrument creating any charge to be kept at its registered office.
(4) The register of charges and the copies of instruments kept in pursuance of this section shall be open to inspection by any creditor with the approval of a director or member of the company at all reasonable times without any charge.
(5) If default is made in complying with subsection (3) or (4), the Langkawi company or foreign Langkawi company and every officer of the company who is in default shall be guilty of an offence against this Act.
Penalty: Five thousand ringgit. Default penalty.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
