ABBD3013

FUNDAMENTALS OF CORPORATE
ADMINISTRATION

REGULATORY BODIES
CCM & BURSA MALAYSIA
HANAPI
PREPARED BY: HISHAM

ASSESSMENT METHODS

COURSEWORKS (40%)

TEST 50% (WEEK 6)

GROUP ASSIGNMENT 50% (WEEK 5)

FINAL EXAM (60%)

INTRODUCTION

Companies Commission Of Malaysia (CCM)

Statutory body which regulates companies and

businesses.

In operation on 16 April 2002, is a statutory body

formed as a result of a merger between the registrar

of companies (ROC) and the registrar of businesses
(ROB) in Malaysia.

Agency under the Ministry of Domestic Trade, Cooperatives and Consumerism.

Main activity to serve as an agency to

incorporate companies and register

businesses as well as to provide company and
business information to the public.

CCM fulfills its function to ensure compliance

with business registration and corporate

legislation through comprehensive
enforcement and monitoring activities to
sustain positive development in the corporate
and business sectors of the nation

ENFORCEMENT OF THE FOLLOWING

LEGISLATION:

COMPANIES ACT 1965 (ACT 125);

REGISTRATION OF BUSINESSES ACT 1956 (ACT 197);
TRUST COMPANIES ACT 1949 (ACT 100);
ANY SUBSIDIARY LEGISLATION MADE UNDER THE ACTS
SPECIFIED ABOVE SUCH AS:

a) COMPANIES REGULATIONS 1966; AND

b) REGISTRATION OF BUSINESSES RULES 1957

ENFORCEMENT OF THE FOLLOWING

LEGISLATION:

Section 308 of the Companies Act 1965

provides a procedure for a company to be

dissolved without having to undertake the
formal process of winding up.

Section 308(1) to strike a defunct company off

the register section 308(3) where the register

strikes off a company that has been wound up.

COMPANIES COMMISSION OF MALAYSIA

THE MAIN POWERS WIELDED BY THE COMPANIES

COMMISSION INCLUDE THE POWER TO PROCESS,

APPROVE AND REGISTER COMPANIES AND BUSINESSES,
AND THE POWER TO DO ALL THINGS IN CONNECTION
WITH ITS ENFORCEMENT OF THE ABOVE LAWS.

AMONG OTHERS, THIS MEANS IT HAS THE POWER TO CALL

FOR INFORMATION FROM, AND TO CONDUCT
INSPECTIONS AND INVESTIGATIONS OF COMPANIES AND
BUSINESSES, AND IT HAS THE POWER TO UNDERTAKE
PROCEEDINGS FOR ANY OFFENCE AGAINST THE SAID
LAWS. IT IS ALSO POWERED TO ENFORCE AND COLLECT
FEES AS AN AGENT OF THE GOVERNMENT UNDER THE
LAWS.

CCM
CCM IS A MERGER OF THE FORMER REGISTRAR OF COMPANIES (ROC) AND
REGISTRAR OF BUSINESSES (ROB)

TO GARNER GREATER SYNERGIES

AND OPTIMUM USAGE OF RESOURCES.
THE INTENTION IS TO EQUIP THE COMMISSION TO EFFICIENTLY AND EFFECTIVELY
CARRY OUT ITS CORPORATE FUNCTIONS

AS THEY ARE GROWING BIGGER IN NUMBER, SOPHISTICATION AND DYNAMISM.

FUNCTIONS

WWW.SSM.COM.MY

To ensure that the provisions of the CCM act and laws are
administered enforced, given effect to, carried out and
complied with;

To act as agent of the government and provide services in

administering collecting and enforcing payment of
prescribed fees or any other charges under the laws
administered

To regulate matters relating to corporations, companies

and businesses in relation to laws administrated

FUNCTIONS
TO ENCOURAGE AND PROMOTE PROPER CONDUCT AMONGST
EMPLOYERS AND EMPLOYEES
: AMONGST DIRECTORS, SECRETARIES, MANAGERS AND
OTHER OFFICERS OF A CORPORATION, SELF-REGULATED
CORPORATIONS, COMPANIES, BUSINESSES, INDUSTRY
GROUPS AND PROFESSIONAL BODIES IN THE CORPORATE
SECTOR IN ORDER TO ENSURE THAT ALL CORPORATE AND
BUSINESS ACTIVITIES ARE CONDUCTED IN ACCORDANCE
WITH ESTABLISHED NORMS OF GOOD CORPORATE
GOVERNANCE;

TO ENHANCE AND PROMOTE THE SUPPLY OF CORPORATE

INFORMATION

FUNCTIONS
TO ENHANCE AND PROMOTE THE SUPPLY OF CORPORATE INFORMATION

UNDER ANY OF THE LAWS ADMINISTRATED, AND CREATE AND DEVELOP A

FACILITY WHEREBY ANY CORPORATE INFORMATION RECEIVED BY THE
COMPANIES COMMISSION MAY BE ANALYSED AND SUPPLIED TO THE PUBLIC;

 TO CARRY OUT RESEARCH AND COMMISSION STUDIES ON ANY MATTER RELATING

TO CORPORATE AND BUSINESS ACTIVITIES IN RELATION TO THE LAWS
ADMINISTERED

TO ADVISE THE MINISTER GENERALLY ON MATTERS RELATING TO CORPORATE AND

BUSINESS ACTIVITIES

TO CARRY OUT ALL SUCH ACTIVITIES AND DO ALL SUCH THINGS AS ARE

NECESSARY OR ADVANTAGEOUS AND PROPER FOR THE ADMINISTRATION OF THE

COMPANIES COMMISSION OR FOR SUCH OTHER PURPOSE AS MAY BE DIRECTED
BY THE MINISTER

POWER
TO UTILISE ALL ASSETS OF THE
COMPANIES COMMISSION

TO IMPOSE FEES OR CHARGES FOR

SERVICES

TO APPOINT AGENTS, EXPERTS OR

CONSULTANTS.

TO PROVIDE LOANS TO EMPLOYEES

OF THE COMPANIES COMMISSION

TO PLAN AND CARRY OUT HUMAN

RESOURCE DEVELOPMENT

TO COLLABORATE OR COOPERATE
WITH ANY OTHER
SOCIETIES/ORGANISATIONS

POWER
TO UTILISE ALL ASSETS OF THE COMPANIES COMMISSION, BOTH
MOVABLE AND IMMOVABLE, IN ANY WAY DEEMED FIT AND
APPROPRIATE BY THE COMPANIES COMMISSION INCLUDING TO
OBTAIN LOANS BY THE CHARGING OF THOSE ASSETS;

TO IMPOSE FEES OR CHARGES FOR SERVICES RENDERED BY THE

COMPANIES COMMISSION AS PRESCRIBED BY THE MINISTER
THROUGH REGULATIONS ESTABLISHED UNDER SECTION 40;

TO APPOINT AGENTS, EXPERTS OR CONSULTANTS, AS DEEMED

NECESSARY, TO AID THE COMPANIES COMMISSION IN CARRYING

OUT ITS FUNCTIONS;

POWER
TO PROVIDE LOANS TO EMPLOYEES OF THE COMPANIES COMMISSION
FOR PURPOSES APPROVED BY THE MINISTER;

TO PLAN AND CARRY OUT HUMAN RESOURCE DEVELOPMENT AS WELL

AS COOPERATIVE AND FINANCING PROGRAMMES FOR PROPER AND
EFFECTIVE IMPLEMENTATION OF ITS FUNCTIONS;

TO COLLABORATE OR COOPERATE WITH ANY OTHER

SOCIETIES/ORGANISATIONS, BODIES OR GOVERNMENT AGENCIES TO

FORM SMART PARTNERSHIPS IN IMPLEMENTING THE FUNCTIONS OF
THE COMMISSION; AND

POWER

TO DO ALL SUCH THINGS AS ARE ALIGNED WITH ANY OF ITS FUNCTIONS

AND POWERS.

REGISTRATION OF BUSINESS

PURSUANT TO SECTION 5A(1) OF THE REGISTRATION OF

BUSINESSES ACT 1956, THE PERSON RESPONSIBLE FOR A

BUSINESS HAS TO, NOT LATER THAN 30 DAYS FROM THE DATE OF
THE COMMENCEMENT OF THE BUSINESS, APPLY TO THE REGISTRAR
TO REGISTER THAT BUSINESS. IF THE APPLICANT IS USING HIS OWN
NAME AS PER IDENTITY CARD AS THE BUSINESS NAME:

THERE IS NO NEED TO APPLY FOR APPROVAL OF THE BUSINESS NAME.

THE APPLICANT HAS TO FILL IN AND COMPLETE FORM A (REGISTRATION OF A
NEW BUSINESS).

THE APPLICANT HAS TO APPEND A COPY OF HIS IDENTITY CARD.

REGISTRATION FEE IS RM30.00 ONLY.

REGISTRATION OF BUSINESS
IF THE APPLICANT IS USING A TRADE NAME AS THE BUSINESS
NAME:

THE APPLICANT HAS TO SUBMIT AN APPLICATION FOR

APPROVAL OF THE BUSINESS NAME USING FORM PNA 42.

IF THE BUSINESS NAME IS APPROVED, THE APPLICANT HAS TO

FILL IN AND COMPLETE FORM A (REGISTRATION OF A NEW
BUSINESS).

THE APPLICANT HAS TO APPEND A COPY OF HIS IDENTITY

CARD/LETTER OF APPROVAL FROM A GOVERNMENT AGENCY (IF

APPLICABLE).

REGISTRATION FEE IS RM60.00 ONLY.

REGISTRATION OF BUSINESS
CHANGE OF ADDRESS

THE APPLICANT MUST FILL IN FORM B1 TO CHANGE THE MAIN

BUSINESS ADDRESS AND REGISTRATION FEE IS RM20.00 ONLY.

CHANGE NATURE OF BUSINESS

THE APPLICANT MUST FILL IN FORM B2 TO CHANGE THE NATURE OF

BUSINESS AND REGISTRATION FEE IS RM20.00 ONLY.

 CAN A COMPANY REGISTERED UNDER THE COMPANIES ACT

1965 START A BUSINESS UNDER THE REGISTRATION OF
BUSINESSES ACT 1956?

PURSUANT TO SECTION 4 OF THE REGISTRATION OF

BUSINESSES ACT 1956, THIS ACT IS NOT APPLICABLE FOR
A BUSINESS WHICH IS EXCLUSIVELY OWNED AND CARRIED
ON BY ANY COMPANY REGISTERED UNDER THE COMPANIES
ACT 1965.

REGISTRATION
A PARTNERSHIP CAN CHANGE ITS
STATUS TO SOLE PROPRIETORSHIP
BY REGISTERING SUCH A CHANGE
USING FORM B4 AND
REGISTRATION FEE IS RM20.00
ONLY.

REGISTRATION FEE FOR A SOLE

PROPRIETORSHIP USING OWN NAME

AS PER IDENTITY CARD IS RM30.00
ONLY.

B. REGISTRATION FEE FOR A SOLE

PROPRIETORSHIP USING A TRADE

NAME IS RM60.00 ONLY.

C. REGISTRATION FEE FOR A

PARTNERSHIP IS RM60.00 ONLY

RENEW BUSINESS
PURSUANT TO SECTION 5A(1) OF THE REGISTRATION OF

BUSINESSES ACT 1956, AN APPLICATION TO RENEW THE

REGISTRATION OF A BUSINESS HAS TO BE MADE IN THE
PRESCRIBED FORM AND MANNER TO THE REGISTRAR
WITHIN 30 DAYS BEFORE THE DATE OF EXPIRY OF THE
REGISTRATION OR THE PREVIOUS RENEWAL.

RENEW BUSINESS
PURSUANT TO RULE 5(1) OF THE REGISTRATION OF BUSINESSES RULES 1957,
AN APPLICATION TO RENEW THE REGISTRATION OF A BUSINESS HAS TO BE
SUBMITTED USING FORM A1.

THE APPLICANT HAS TO FORWARD A COMPLETED FORM A1 TOGETHER WITH

THE PRESCRIBED FEE AS PER SCHEDULE 19 OF THE REGISTRATION OF
BUSINESSES RULES 1957.

BURSA SAHAM

BURSA MALAYSIA IS AN EXCHANGE HOLDING COMPANY APPROVED

UNDER SECTION 15 OF THE CAPITAL MARKETS AND SERVICES ACT 2007.

IT OPERATES A FULLY-INTEGRATED EXCHANGE, OFFERING THE COMPLETE
RANGE OF EXCHANGE-RELATED SERVICES INCLUDING TRADING,
CLEARING, SETTLEMENT AND DEPOSITORY SERVICES. THE WHOLLYOWNED SUBSIDIARIES OF BURSA MALAYSIA OWN AND OPERATE THE
VARIOUS BUSINESSES

 BURSA MALAYSIA HAS SINCE THEN FOCUSED ON

VARIOUS INITIATIVES AIMED AT IMPROVING ITS

PRODUCT AND SERVICE OFFERINGS, INCREASING THE
LIQUIDITY AND VELOCITY OF ITS MARKETS, IMPROVING
THE EFFICIENCY OF ITS BUSINESSES AND ACHIEVING
ECONOMIES OF SCALE IN ITS OPERATIONS. ON 18
MARCH 2005, BURSA MALAYSIA WAS LISTED ON THE
MAIN BOARD OF BURSA MALAYSIA SECURITIES
BERHAD WITH A 17% OR RM0.50 PREMIUM OVER ITS
RETAIL PRICE OF RM3.00.

SHARES
EQUITIES OFFER CONSIDERABLE POTENTIAL FOR CAPITAL

GROWTH AND ARE LONG TERM RISK INVESTMENTS. IT

INVOLVES COMPANY SHARES WHICH REPRESENTS PART
OWNERSHIP BY THE INVESTOR IN A PARTICULAR
COMPANY. OWNERSHIP OF EQUITIES WILL OFTEN ENTITLE
THE INVESTOR TO A PORTION OF THE COMPANY'S PROFITS
THROUGH DIVIDENDS.

SHARE CAPITAL

A SHARE IS A SECURITY WHICH REPRESENTS A PORTION OF

THE OWNER'S CAPITAL IN A BUSINESS. SHAREHOLDERS ARE

THE OWNERS OF THE BUSINESS AND SHARE THE SUCCESS
OR FAILURE OF THE BUSINESS. THE PERFORMANCE OF THE
BUSINESS CAN OFTEN BE MEASURED BY THE AMOUNT OF
DIVIDENDS SHAREHOLDERS RECEIVE AND BY THE PRICE OF
THE SHARE, QUOTED ON THE STOCK MARKET. (SHARES ARE
ALSO COMMONLY REFERRED TO AS STOCK).

SHARES CAPITAL
A SHARE IS A SECURITY WHICH REPRESENTS A PORTION OF
THE OWNER'S CAPITAL IN A BUSINESS.

THE TYPES OF SHARES SOLD AT BURSA SAHAM ARE : PREFERENCE SHARE

ORDINARY SHARE

 ORDINARY SHARES
ORDINARY SHARES ARE THE MOST COMMON KIND OF SHARES. AN ORDINARY

SHARE GIVES THE HOLDER VOTING RIGHTS IN THE COMPANY AND ENTITLES THE
PERSON TO ALL DIVIDEND DISTRIBUTIONS AS A PART-OWNER OF THE COMPANY.

PREFERENCE SHARES
PREFERENCE SHARES ALLOW HOLDERS TO BE PAID DIVIDENDS BEFORE

ORDINARY SHAREHOLDERS AND THEY ALSO HAVE PRIORITY OVER ASSET

CLAIMS IF THE COMPANY GOES BUST. THE DOWNSIDE IS THAT PREFERENCE
SHAREHOLDERS HAVE A FIXED DIVIDEND AND ONLY LIMITED VOTING RIGHTS
WITH RESPECT TO COMPANY AFFAIRS.

THE TYPES OF PREFERENCE SHARES

ARE:
CALLABLE.

CONVERTIBLE.
CUMULATIVE.
NON-CUMULATIVE
PARTICIPATING.

 CALLABLE. THE ISSUING COMPANY HAS THE RIGHT TO BUY BACK

THESE SHARES AT A CERTAIN PRICE ON A CERTAIN DATE. SINCE THE

CALL OPTION TENDS TO CAP THE MAXIMUM PRICE TO WHICH A
PREFERENCE SHARE CAN APPRECIATE (BEFORE THE COMPANY BUYS
IT BACK), IT TENDS TO RESTRICT STOCK PRICE APPRECIATION.

CONVERTIBLE. THE OWNER OF THESE PREFERENCE SHARES HAS THE

OPTION, BUT NOT THE OBLIGATION, TO CONVERT THE SHARES TO A

COMPANY'S COMMON STOCK AT SOME CONVERSION RATIO. THIS IS
A VALUABLE FEATURE WHEN THE MARKET PRICE OF THE COMMON
STOCK INCREASES SUBSTANTIALLY, SINCE THE OWNERS OF
PREFERENCE SHARES CAN REALIZE SUBSTANTIAL GAINS BY
CONVERTING THEIR SHARES.

 CUMULATIVE. IF A COMPANY DOES NOT HAVE THE FINANCIAL RESOURCES TO PAY A

DIVIDEND TO THE OWNERS OF ITS PREFERENCE SHARES, THEN IT STILL HAS THE
PAYMENT LIABILITY, AND CANNOT PAY DIVIDENDS TO ITS COMMON SHAREHOLDERS
FOR AS LONG AS THAT LIABILITY REMAINS UNPAID.

NON-CUMULATIVE. IF A COMPANY PAYS A SCHEDULED DIVIDEND, THEN IT DOES NOT

HAVE THE OBLIGATION TO PAY THE DIVIDEND AT A LATER DATE. THIS CLAUSE IS
RARELY USED.

 PARTICIPATING. THE ISSUING COMPANY MUST PAY AN INCREASED DIVIDEND

TO THE OWNERS OF PREFERENCE SHARES IF THERE IS A PARTICIPATION
CLAUSE IN THE SHARE AGREEMENT. THIS CLAUSE STATES THAT A CERTAIN
PORTION OF EARNINGS (OR OF THE DIVIDENDS ISSUED TO THE OWNERS OF
COMMON STOCK) WILL BE DISTRIBUTED TO THE OWNERS OF PREFERENCES
SHARES IN THE FORM OF DIVIDENDS.

WHY INVEST IN BURSA MALAYSIA?

MOST OF US KNOW THAT THE POTENTIAL FOR HIGHER RETURNS ARE FAR BETTER
FROM THE STOCK MARKET THAN FROM MANY OF THE SAFE INVESTMENTS
AVAILABLE. $1 WISELY INVESTED IN THE STOCK MARKET CAN BRING MANY
MULTIPLES IN RETURNS WHEN COMPARED TO LEAVING MONEY IN A BANK
(WHERE INTEREST CAN BE SHOCKINGLY LOW).

RESPONSIBILITY/ BENEFITS

PUBLIC ACCOUNTABILITY.

ADHERE STRICT CORPORATE

GOVERNANCE STANDARDS.

PERIODIC REPORTING REQUIREMENTS.

PUBLIC SCRUTINY ON FINANCIALS,

TRANSACTIONS & RPT.

ENHANCE IMAGE, IMPROVE

PRODUCTS/SERVICES
MARKETABILITY.

INCREASE SHAREHOLDERS
WEALTH.

INVESTMENT.

EMPLOYEES PARTICIPATE IN
GROWTH OF COMPANY.

ENHANCE MARKETABILITY &

LIQUIDITY FOR SHAREHOLDERS
INVESTMENT.

SHARES AS CURRENCY FOR M&A.

DILUTION IN EQUITY & CONTROL.