Company Law in Malaysia - Separate Legal Entity
Introduction
In a modern capitalist market economy, companies are a familiar part of everyday life. Companies own supermarkets, supply water, gas, electricity and petroleum products we are depending on. They publish the newspapers and provide our Internet services. We deal with companies so often as purchasers and users of their products and services that the image ‘company’ brings to mind is usually of an organisation concerned with marketing and collecting payment for products which the company has made (or bought in) or services it has provided. It is necessary to go behind this image to get to the company which is the subject of company law. As we all know in Malaysia there are different types of business entities. Local or foreign investors are coming to Malaysia to start a business. Company has been defined as any formal business entity for profit which may be a corporation, a partnership, association or individual proprietorship. Often people think the term "company" means the business is incorporated, but that is not true. In fact, a corporation usually must use some term in its name such as "corporation," "incorporated," "corp." or "inc." to show it is a corporation. In Malaysia, a "company" is a business organisation that is registered (or "incorporated") under the Companies Act, 1965 or its predecessor legislation, Section 14(1) two or more persons, if they agree to become associated for any lawful purpose may incorporate a company. In reality, a company or a corporate person is an association of persons who have agreed to undertake their lawful undertakings through a company.
In order to incorporate a company, there are two stages that we have to go through, which are, pre-incorporation and post incorporation. In the pre incorporation stage, the promoter is responsible to bring the company into the legal existence and ensure its successful running, and in order to accomplish his obligation he may enter into some contract on behalf of prospective
In a modern capitalist market economy, companies are a familiar part of everyday life. Companies own supermarkets, supply water, gas, electricity and petroleum products we are depending on. They publish the newspapers and provide our Internet services. We deal with companies so often as purchasers and users of their products and services that the image ‘company’ brings to mind is usually of an organisation concerned with marketing and collecting payment for products which the company has made (or bought in) or services it has provided. It is necessary to go behind this image to get to the company which is the subject of company law. As we all know in Malaysia there are different types of business entities. Local or foreign investors are coming to Malaysia to start a business. Company has been defined as any formal business entity for profit which may be a corporation, a partnership, association or individual proprietorship. Often people think the term "company" means the business is incorporated, but that is not true. In fact, a corporation usually must use some term in its name such as "corporation," "incorporated," "corp." or "inc." to show it is a corporation. In Malaysia, a "company" is a business organisation that is registered (or "incorporated") under the Companies Act, 1965 or its predecessor legislation, Section 14(1) two or more persons, if they agree to become associated for any lawful purpose may incorporate a company. In reality, a company or a corporate person is an association of persons who have agreed to undertake their lawful undertakings through a company.
In order to incorporate a company, there are two stages that we have to go through, which are, pre-incorporation and post incorporation. In the pre incorporation stage, the promoter is responsible to bring the company into the legal existence and ensure its successful running, and in order to accomplish his obligation he may enter into some contract on behalf of prospective