According to P.U.(B) 50 gazetted on 26 January 2017, the Companies Act 2016 (Act 777) will come into operation on 31 January 2017.
The entire new Act will become effective, except for section 241 (registration of company secretary) and Division 8 of Part III (corporate rescue mechanism).
The new Act will replace the Companies Act 1965 and is applicable to all companies incorporated under the old Act.
The Companies Act 2016 (the “Act”) aims to establish a modernised corporate legal framework for businesses in Malaysia, while enhancing corporate governance that is in line with global practices.
The 620 provisions of the Act (the old Act has 374 provisions) include major new areas that ease the business community in Malaysia, such as no par value shares, single shareholder or single director company, non-mandatory AGM for private companies, new corporate rescue mechanism, etc.
Various enforcement measures are included in the Act, such as civil and administrative proceedings for specified breaches and penalty against officers as personal liability.
In this article, we shall discuss about provisions in the Act regarding financial statements, internal control, dividends and directors’ reports.