Malaysia Company Law - Share Capital
Share capital
Introduction
A public company can acquire funding by offering or inviting the public to subscribe to its securities (shares). A company limited by shares issues and allots shares to a shareholder in return for capital. This called share or equity capital.
Capital structure
Authorized Share Capital
Meaning of authorized and issued capital:
S18(1)(c) Company Act 1965: If the company is limited by shares, its memorandum must state the amount of share capital and its division into shares of a fixed amount. Any issuances of excess shares are void: Bank of Hindustan, China & Japan Ltd v Alison (1871).
Reserved or Uncalled capital
Shares that are partly paid. The amount unpaid called ‘reserve capital’ or ‘uncalled capital’.
Variation of authorized capital
Table A art 40(a) allows company to increase its authorized share capital in accordance with s62. The decision of increase must made by the general meeting. s62(1)(e): cancel shares which at the date of the passing of the resolution in that behalf has not been taken or agreed to be taken by any person... and diminish the amount of its shares capital by the amount of the shares so cancelled. s62(2) A cancellation of shares under this section shall not been deemed to e a reduction of share capital within the meaning of this Act.
Issue of Shares
Contractual rules
Offer and acceptance
A company seek to raise equity funding from members of the public, the company will make an invitation to the public. The offer is accepted by the company through its director, to allot the shares and sends the applicant a notice of allotment, these communications usually by post, and acceptance by post is deemed effective when posted: Byrne v Van Tienhoven (1880)
Consideration for shares
Nominal / Par value of shares
Shares issued by the company limited by shares must have a nominal or par value, as stated in s18(1)(c). Fixed amount refers to the nominal or par value of the share. In return for having
Introduction
A public company can acquire funding by offering or inviting the public to subscribe to its securities (shares). A company limited by shares issues and allots shares to a shareholder in return for capital. This called share or equity capital.
Capital structure
Authorized Share Capital
Meaning of authorized and issued capital:
S18(1)(c) Company Act 1965: If the company is limited by shares, its memorandum must state the amount of share capital and its division into shares of a fixed amount. Any issuances of excess shares are void: Bank of Hindustan, China & Japan Ltd v Alison (1871).
Reserved or Uncalled capital
Shares that are partly paid. The amount unpaid called ‘reserve capital’ or ‘uncalled capital’.
Variation of authorized capital
Table A art 40(a) allows company to increase its authorized share capital in accordance with s62. The decision of increase must made by the general meeting. s62(1)(e): cancel shares which at the date of the passing of the resolution in that behalf has not been taken or agreed to be taken by any person... and diminish the amount of its shares capital by the amount of the shares so cancelled. s62(2) A cancellation of shares under this section shall not been deemed to e a reduction of share capital within the meaning of this Act.
Issue of Shares
Contractual rules
Offer and acceptance
A company seek to raise equity funding from members of the public, the company will make an invitation to the public. The offer is accepted by the company through its director, to allot the shares and sends the applicant a notice of allotment, these communications usually by post, and acceptance by post is deemed effective when posted: Byrne v Van Tienhoven (1880)
Consideration for shares
Nominal / Par value of shares
Shares issued by the company limited by shares must have a nominal or par value, as stated in s18(1)(c). Fixed amount refers to the nominal or par value of the share. In return for having