The Companies Act 2016 is the primary legislation that governs the formation, operation, and dissolution of companies in Malaysia. The Act came into force on 31 January 2017, replacing the Companies Act 1965. The Companies Act 2016 provides a modern and flexible legal framework that is designed to promote good corporate governance, enhance the protection of stakeholders, and facilitate business growth and innovation.
The Act sets out the requirements and procedures for the incorporation, registration, and administration of companies in Malaysia. This includes provisions relating to the appointment and removal of directors, the holding of shareholders' meetings, and the regulation of share capital and dividends. The Act also provides for the establishment of various types of companies, including private and public companies, limited by shares or by guarantee, and unlimited companies.
One of the key features of the Companies Act 2016 is its emphasis on corporate governance and transparency. The Act requires companies to maintain accurate and up-to-date records, file financial statements and reports with the Registrar of Companies, and disclose certain information to shareholders and the public. The Act also provides for greater accountability and oversight by requiring the appointment of an auditor for all companies, and by establishing the Companies Commission of Malaysia as the regulatory authority for companies in the country.
In addition to the provisions relating to the formation and operation of companies, the Companies Act 2016 also sets out the procedures for winding up and dissolution of companies. The Act provides for both voluntary and compulsory winding up, as well as the appointment of liquidators and the distribution of assets to creditors and shareholders.
Overall, the Companies Act 2016 is an important piece of legislation that provides a comprehensive and modern legal framework for companies in Malaysia. The Act seeks to promote good corporate governance, transparency, and accountability, while also encouraging business growth and innovation in the country.