Companies Commission of Malaysia Issues Further Guidance for End of Transition Period to No Par Value Shares Regime

11 March 2019

On 31 January 2019, the Companies Commission of Malaysia (‘CCM’) issued guidance on the filing requirements that arise from the end of the transition period to the no par value shares regime on 31 January 2019. A summary of this guidance was highlighted in our Alert dated 4 February 2019.

The CCM has issued further guidance on this subject on 7 March 2019 as follows –

(1) FAQ 5 has been updated and four new FAQs have been added to Part A of the document, Enforcement Date of the

Companies Act 2016 and Transitional Issues. These five FAQs are reproduced below -

5. What is the period for lodging this notification? (updated on 7 March 2019)

Answer:

Pursuant to subsection 618(8)^[1], a company is required to submit the notice at any time before–

(a) the date it is required to lodge its annual return after the end of the period referred to under subsection 618(3); or

(b) the expiry of 180 days after the end of the period referred to under subsection 618(3),

whichever is the earlier.

However, it is advisable for a company to adhere to the following lodgement timeline provided the lodgement of the

notice is in compliance with the requirements stated in subsection 618(8) of the CA 2016.

6. If a company has an amount standing to the credit of its share premium account and/or capital redemption

reserve as at 30 January 2019, can the company lodge its annual return before submitting the notification under

section 618(8) of the CA 2016 to the Registrar? (updated on 7 March 2019)

Answer:

No. The company is required to submit the notification under section 618(8) of the CA 2016 before submitting the

annual return to the Registrar if the company has share premium and/or capital redemption reserve (CRR) balances

as at 30 January 2019.

7. If a company does not have any amount standing to the credit of its share premium account and/or capital

redemption reserve as at 30 January 2019 or never had these accounts, can the company lodge its annual return

without submitting the notification under section 618(8) of the CA 2016 to the Registrar? (updated on 7 March 2019)

Answer:

Yes. The company has the following options:

(a) Submit the notification of its share capital pursuant to section 618 of the CA 2016 before lodging its annual return

to the Registrar; or

(b) Do not submit the notification of its share capital pursuant to section 618 of the CA 2016 to the Registrar. However,

if the company chooses not to submit the notification pursuant to subsection 618(8) of the CA 2016, Registrar will

invoke subsection 618(10)^[2] of the CA 2016 after the expiry of the 180 days period as stated in subsection

618(8) of the CA 2016.

The annual return can be submitted and it must at all times comply with the time period for submitting the annual

return to the Registrar under section 68 of the CA 2016.

8. What is the value of the shares to be included in the annual return (AR) lodgement? (updated on 7 March 2019)

Answer:

If the anniversary of a company’s incorporation date falls on or before 30 January 2019, the value of the shares to be

disclosed in the AR should not include share premium and/or capital redemption reserve amount.

If the anniversary of its incorporation date of a company falls on or after 31 January 2019, the value of the shares in

the AR should be inclusive of the share premium and/or capital redemption reserve.

9. What information should the company provide on its Equity Structure as at 30 January 2019? (updated on 7

March 2019)

Answer:

The company is required to provide information on its share premium and/or capital redemption reserve (“CRR”)

accounts (wherever applicable) during the 24 months period as follows:

(2) The form, Notice of Share Capital (under sections 618(8) and 618(9)), to be used to notify the Registrar of the

changes in equity structure of the company by comparing the position as of 30 January 2019 and 31 January 2019 has

been modified.

^[1] Section 618(8) of CA2016, inter alia, provides that a notice of share capital is to be filed with the Registrar: (a) at any

time before (i) the date it is required to lodge its annual return after the end of the period referred to under section

618(3); or (ii) the expiry of 180 days after the end of the period referred to under section 618(3), whichever is the earlier;

or (b) within such longer period as the Registrar may allow.

^[2]Section 618(10) of CA2016, inter alia, provides that unless a company has filed a notice of its share capital under

sections 618(8) or 618(9), the Registrar may for the purposes of the records maintained by him adopt, as the share

capital of the company, the aggregate value of the shares issued by the company as that value appears in the

Registrar’s records immediately after the end of the period referred to in section 618(8)(a) of CA2016.

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Companies Commission of Malaysia Issues Further Guidance for End of Transition Period to No Par Value Shares Regime