SDL-CHAPTER 1

Name: NG MEI SIM (01DAT20F1044)

1. What's the difference this course (subject) with others?
➢ Company law is studying the knowledge of Company Act 2016 and Companies
Regulations 2017. It is different with business laws. A significant difference
between the two types of laws is that corporate law tends to provide guidelines
used in the purchase and selling of items in the market. On the other hand,
business laws employ a broader perspective of legal influence in business.
2. Compare clearly between act and regulation

Parameters of Act Regulation

Comparison

Definition The act is a law that is approved by the A regulation is a smaller set of
respective legislative bodies like rules that work accordingly
Parliament or State Legislative with the Acts for clarification.
Assembly.

Procedure When a bill is introduced by the Regulations are the specific

government or a member of Parliament requirement within the
gets accepted by both of the two houses legislation. It is made by the
of the parliament, it is then presented to regulatory bodies for
the President for acceptance. When the implementing laws
President gives his assent, the bill is appropriately.
turned into an Act.

Enacted by Acts are enacted by legislative bodies. Regulations are enacted by

subsidiary legislation.

Type Acts are the parent law, typically known Reflections are subordinate
as Acts of Parliament. and supplement in nature.

Publishing Acts are published as a single document Regulations are published in

process and are available to the public. the Government Gazette.

3. List down the types of business entity

• Sole proprietorship
• Partnership
• Company
• Limited liability partnership
• Limited partnership (Labuan only)
4. what is legislation/ special law/ act to bind the business entity below:
a. Sole proprietorship
➢ Registration of Business Act 1956 (ROBA 1956)
b. Partnership
➢ Partnership Act 1961
c. Company
➢ Company Act 2016 (Act 777)

5. Compare the type of business with the aspect of:

Aspect Limited Sole Partnership Company

Liability Proprietorship
Partnership
a. capital contribution Partners Own Partners Share capitals
contribution contribution
contribution
b. ownership of business Partners Sole Partners Company
have the proprietor (members/
shares in the shareholders own
capital and shares in the
profits of the company which
LLP give them certain
rights in company
c. legal status A separate Not a separate Not, a A separate legal
legal entity legal entity separate entity
legal entity
d. liability for debts of LLP Sole Partners Company
business proprietor

e. responsibility for Partners Sole Partners Company

management proprietor

f. number of Minimum 2 One Owner A total of 2- Minimum 2 and

shareholders/partners and 20 partners maximum 50 in
maximum (except for private company.
limit professional More than 50 for
with no public company.
maximum
limit)
6. what the main concept to compare between a company and a business?
➢ A business is an individual or organisation that engages in commercial or
industrial activities on a regular basis. These can be either for-profit or non-
profit, but businesses typically operate as profit-seeking organisations that aim
to meet a specific demand in the market.
➢ On the other hand, at a basic level, a company is a separate legal entity formed
from an association of people that engages in business. The members of a
company share common goals and organise their skills and resources
accordingly. Companies can be structured in different ways; for instance, a
corporation, a partnership or a sole proprietorship. Companies come in
numerous forms, including business entities that aim to make a profit, voluntary
associations like non-profit organisations and financial entities like banks.

7. According to section 2 Companies Act 2016, Company can define as a company

incorporated under the Companies Act 2016 (Act 777) or under any corresponding
previous law.

8. Definition of private companies is written in section 2 of Companies Act 2016.

➢ Section 2 of the Act defines a ‘private company’ as a company that, before
coming into force of this Act, is a private company under the law.

9. Section 2 Companies act 2016 is mention about the act of company. It includes the
definition, accounting record, beneficial owner, foreign company and more.
10. Differentiate between a Private Company and a Public Company

Aspect Private Company Public Company

✓ Name Sendirian/ Sdn, (section Without Sendirian/ Sdn.
25(1))
✓ Commencement of Issued with the Notice of Issued with the Notice
Business Registration that the company is
entitled to commence
business and borrowing
powers
✓ Allotment of Share Forbidden from inviting Allowed to invite the
the public (section 43) public
✓ Restriction on Restricted (section 42) Not prohibited
Transfer of Shares
✓ Prohibited from Prohibited (section 43) Not prohibited
Inviting the Public
to Deposit Money
✓ Maximum Number No more than 50 No limit
of Members (section42)
✓ Annual General Not required Required (section 340)
Meeting

11. Explain parent (holding) and subsidiary companies

➢ The definitions of parent and subsidiary companies are provided in section 4 of

the Companies Act 2016.
➢ From the section 4(1) (a)(i) of act, a corporation (S) is deemed to be a subsidiary
of another corporation (H) if H controls the composition of the board of directors
of S; meaning H could appoint or remove all or a majority of the directors of S.
➢ According the section 4(1) (a)(ii) of act, a corporation (S) is deemed to be a
subsidiary of another corporation (H) if H controls more than half (50%) of the
voting power of S.
➢ From the section 4(1) (a)(iii) of act, a corporation (S) is deemed to be a subsidiary
of another corporation (H) if H holds more than half (50%) of the issued share
capital (excluding preference shares) of S.
➢ According the section 4(1) (b) of act, a corporation (S) is deemed to be a
subsidiary of another corporation (H) if S is a subsidiary of any corporation which
is a subsidiary of H.
12. What the function of limited companies and unlimited companies?

➢ Unlimited company is unlimited liability for the owner of the company as all
risks of business operation and liabilities should be borne by Proprietor or
Partner. However, annual accounting and auditing costs are relatively less, and
submission of Annual Return is also simpler. In a limited company, the liability
of members or subscribers of the company is limited to what they have invested
or guaranteed to company as all risks of business operation, but it needs to
afford relatively high accounting and auditing costs. Also, submission of Annual
Return is more complicated.

13. What is foreign companies and local companies?

➢ Section 2 of the Companies Act 2016 has define the foreign company as a
company, corporation, society, association or other body incorporated outside
Malaysia or an unincorporated society association, or other body which under
the law of its place of origin may sue or be sued, or hold property in the name
of the secretary or other officer of the body or association duly appointed for
that purpose and which does not have its head office or principal place of
business in Malaysia.
➢ Under section 2(1) of Companies Act 2016 has define the local company as a
company incorporated pursuant to any corresponding previous written law.
Form this act, it refers to a company incorporated in Malaysia.
➢ By virtue of section 3 of Companies Act 2016, the word ‘corporation’ covers both
local and foreign companies.

By: siti zubaidah (coordinator of DPA30083)