Incorporation of Private Company

Incorporated company is a separate legal entity with perpetual succession and ability to own assets and sue or be sued under its name. For a company it must be incorporated under the Companies Act 1965.

The general rule of incorporation, any company doing business in Malaysia must register with the Companies Commission of Malaysia (CCM) under the Act.

The internal affairs of a company incorporated under the Companies Act 1965 are governed by the company’s Memorandum and Articles of Association (M&A). It consists of two documents, the Memorandum of Association which is regarded as the company’s constitution and Article of Association which describes the regulations governing the internal management of the affairs of the company and the conduct of its business.

However, for purpose of incorporation, the following decisions have to be taken by the promoters:

I. how the activities of the company can be described in the object clause of the company.

II. what is the authorized capital of the company (at least RM 2.00)

III. who are the first shareholders of the company (at least 2 person, unless the proposed company is a wholly-owned subsidiary of another company)

IV. what is the shareholding as between the first shareholders.

V. who are the first directors of the company

VI. who are the first secretaries of the company.

The subscriber will have to disclose their full names, addresses and occupations and declare that they are desirous of being formed into a company in pursuance to the Memorandum of Association and that they respectively agree to take the number of shares in the capital of the company set opposite their names. The Memorandum of Association must be signed by at least two subscribers and their signatures must be witnessed by a third person. The witness must sign the Memorandum and state his name, designation and address. Each of subscribers must undertake to subscribe for one or more shares of the company and they must in their own handwriting, insert against their names the number of shares for which they subscribe.

Under Section 16(6) of the Companies Act 1965, a subscriber is deemed to have agreed to become a member and subscriber’s shares issued without formal allotment are deemed to have been allotted on the date of incorporation of the company.

a promoter before incorporation of a corporation.

There must be at least two promoters. Usually the first promoters will stated in Memorandum of Association of the company and each promoter must sign a separate form. A promoter usually is director that undertakes to form a company. Each promoter