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Regulations and revised Guidelines issued for application by Company Limited by Guarantee to hold land

23 July 2025

The Companies Act 2016 (“CA 2016”) prohibits a company limited by guarantee (“CLBG”) from holding land1 unless a licence (“Licence”) has been obtained from the Minister of Domestic Trade and Cost of Living (“Minister”) (Section 45(4)).
 
In exercise of the powers conferred under section 45(5) of the CA 2016, the Minister issued the Companies (Licence for Land Holding) Regulations 2025 [P.U.(A) 211/2025] (“Regulations”) which came into operation on 15 July 2025 (“Enforcement Date”).
 
The Registrar also issued the revised Guidelines on Company Names on 15 July 2025 (“2025 Guidelines”) in place of the previous guidelines of the same name issued on 27 September 2021 (“2021 Guidelines”).
 
Application for Licence
 
Regulation 3(1) of the Regulations requires an application for a Licence to be made to the Minister, through the Registrar. Regulation 3(2) requires the application to be accompanied by: 
  1. the payment of a fee of RM300; 
  2. a statement containing: 
  • the purpose of holding the land;
  • the method of acquiring the source of funds, holding of the land or financing and arrangement of payment;
  • the price or value of the land; and
  • the main activities of the CLBG; 
  1. a latest copy of list of lands owned by the CLBG under section 45(4) of the CA 2016, if any; 
  2. a copy of the stamped agreement or deed of gift, or other supporting documents relevant to the acquisition or holding of the land; 
  3. a copy of the latest title, master title, strata title or other supporting documents relevant to the acquisition or holding of the land; 
  4. a copy of a private land search within three months of each application to acquire or hold the land; 
  5. a copy of the audited financial statements of the CLBG for the last two years which have been lodged with the Registrar, unless the land is to be acquired or held by way of gift; 
  6. a copy of the directors’ resolution in relation to the approval to acquire or hold the land; 
  7. a copy of a statement of arm’s length transaction by all the directors and trustees; 
  8. a copy of the latest valuation report from a licensed valuer within two years of each application, unless the land is to be acquired or held by way of a gift; 
  9. a statutory declaration, by the secretary or one of the directors or trustees, that in making the application, the CLBG has complied with all requirements of the CLBG’s current constitution; and 
  10. any other related information or documents, if any, as required by the Registrar. 
The application for a Licence shall only be considered when all terms and conditions attached to the land have been complied with (Regulation 3(3)).
 
Issuance of Licence
 
The Minister shall issue a Licence to the CLBG if he is satisfied that all the requirements under the Regulations have been complied with (Regulation 4).
 
Conditions of Licence
 
Regulation 5 provides that upon issuance of the Licence, the CLBG shall: 
  1. ensure that the land or the revenue from such land is used for the purposes specified in the objects of the CLBG; 
  2. ensure that the revenue from the land is not used by its members or directors to carry out any activity which is against its constitution; 
  3. not charge, mortgage, lease, subdivide, partition, vest in, dispose or transfer the land without the prior approval of the Registrar; and 
  4. comply with any written law applicable to the land. 
Revocation of Licence
 
If a CLBG that has been granted a Licence fails to comply with any conditions specified in regulation 5, its Licence may be revoked.
 
A CLBG whose Licence has been revoked shall dispose of the land within two years from the date of the revocation of the Licence.
 
A CLBG which fails to dispose of the land within the aforesaid two-year period shall apply to the Registrar to extend the disposal period before the expiry of the same, and provide the reasons accordingly. The Registrar may extend the two-year period by a period he considers appropriate if he is satisfied with the reasons given by the CLBG.
 
Saving and transitional
 
Any licence granted by the Minister in relation to the holding of land under section 45 of the CA 2016 before the Enforcement Date, shall remain in force and have effect until the licence expires, or is withdrawn or cancelled.
 
Any application for a licence to hold land under section 45 of the CA 2016 pending on the Enforcement Date shall on the coming into operation of the Regulations be dealt under any guideline, circular or practice note in relation to an application for a licence to hold land issued under the Companies Commission Malaysia Act 20012, and such guidelines, circulars or practice notes shall be deemed to have been made under, or in accordance with, the CA 2016.
 
Any CLBG which holds a licence for holding land or has acquired a licence to hold land under section 45 of the CA 2016 before the Enforcement Date, shall within six months after the Enforcement Date, comply with the conditions specified in regulation 5 of the Regulations.
 
The 2025 Guidelines
 
Paragraphs 32 to 34 of the 2021 Guidelines had dealt with the holding, acquiring, charging, mortgaging, selling and disposing of land by a CLBG. To align the 2025 Guidelines with the Regulations which only apply to the holding of land by a CLBG, the foregoing paragraphs of the 2021 Guidelines have been replaced by paragraphs 30 to 32 of the 2025 Guidelines which, inter alia, provide as follows: 
  1. paragraph 30 – in line with section 45(4) of the CA 2016 and the Regulations, paragraph 30 provides that a CLBG shall not hold land unless a Licence has been obtained from the Minister; 
  2. paragraph 31 – in line with the Regulations, paragraph 31 provides that an application for a Licence is to be made in accordance with the Regulations; and 
  3. paragraph 32 – this paragraph addresses the other types of land transactions and provides that a CLBG shall not charge, mortgage, lease, subdivide, partition, dispose or transfer its land without the prior approval of the Registrar3. 
The 2025 Guidelines provide several checklists, including Checklist 5A (“Checklist 5A”) which is to be submitted by a CLBG for an application for a Licence from the Minister to hold land, and Checklist 5B (“Checklist 5B”) which is to be submitted for an application to the Registrar for approval to charge, mortgage, lease, sell, transfer or dispose land4.
 
In addition to the documents/ information set out in regulation 3(2) of the Regulations, Checklist 5A requires additional documents/ information to be provided by a CLBG in support of its application. These are summarised as follows: 
  1. the section 45 CA 2016 form; 
  2. a statement to explain the financial impact of the application to hold land on the CLBG; 
  3. a copy of the CLBG’s notice of registration under the CA 2016 or certificate of incorporation under the Companies Act 1965; 
  4. a copy of the CLBG’s constitution; 
  5. information on the status and the current usage and development made in respect of each land owned by the CLBG; 
  6. a description of the land with the prescribed information set out in paragraph 6 of Checklist 5A; 
  7. a copy of the stamping certificate as evidence that the agreement/ deed of gift/ other supporting document has been stamped; 
  8. where the land is subject to a restriction, evidence that the approval of the relevant State Authority has been granted and where the land is subject to a charge, a letter from the chargor5 that it has no objection; 
  9. the latest three months’ bank statement of the CLBG confirming that it has cash in its account to prove the liquidity of the CLBG is sufficiently stable to hold land; 
  10. a copy of the member’s resolution under section 223 of the CA 2016 pertaining to the approval to hold land, if required; and 
  11. a copy of an approval letter in relation to the holding of land from the Director General of the Inland Revenue Board if the CLBG is a tax exempt company under section 44(6) of the Income Tax Act 1967. 
In addition to the foregoing, the following paragraphs of Checklist 5A should be noted: 
  1. paragraph 10 which requires an Official Land Search to be submitted for each land, whereas paragraph (e) of regulation 3(2) of the Regulations only requires a private land search to be submitted for each land; and 
  2. paragraph 16 which stipulates that a CLBG which has been incorporated for less than two years is ineligible to apply to purchase land, but may hold land by way of donation/ gift. 
As mentioned above, Checklist 5B applies to an application to the Registrar for approval to charge, mortgage, lease, sell, transfer or dispose land. The documents/ information to be provided to the Registrar are substantially similar to those set out in Checklist 5A, subject to changes necessitated by the different nature of the transactions under the respective checklists.
 
Comments
 
The key takeaway from the Regulations read with the 2025 Guidelines are as follows:
 
First, there is now a difference in the approving authority and application forms, namely the Minister for an application under section 45(4) of CA 2016 for a Licence to hold land, and the Registrar for approval to charge, mortgage, lease, sell, transfer or dispose land under paragraph 32 of the 2025 Guidelines;
 
Second, in light of the different approving authorities, a CLBG that applies for a Licence to hold acquire and land and for approval to charge the land to raise financing for the acquisition, would be required to submit separate applications under separate checklists to the respective authorities; and
 
Third, CLBGs should note that paragraph 16 of Checklist 5A imposes a two-year moratorium on newly registered/ incorporated CLBGs from acquiring or holding land except by way of donation/ gift, notwithstanding that such moratorium is not imposed under the Regulations.6
 
 
Article by Phua Pao Yii (Partner) and Faith Chan (Associate) of the Corporate Practice of Skrine.
 
 
 
1 Regulation 3(4) of the Regulations clarifies that the land that can be held by a CLBG includes any land acquired or held by way of purchase, transfer, court order, lease, waqf, will or gift.
2 The 2021 Guidelines were issued pursuant to the Companies Commission Malaysia Act 2001.
3 This is a significant change from paragraph 33 of the 2021 Guidelines which vest the power of approval of these land transactions in the Minister.
4 Note that partitioning and subdivision of land referred to in paragraph 32 of the 2025 Guidelines have been omitted from Checklist 5B.
5 We believe the reference to “chargor” should read as “chargee”.
6 The two-year moratorium is carried over from paragraph 12 of Checklist 5 of the 2021 Guidelines.

This article/alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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