Apr 18, 2008

Company Law Tutorial 13&14

Question 1 (i)

Special resolution is defined under Section 152 Companies Act, 1965. It requires the company to give 21 days notice for meeting and there must be at least 75% of the members agree with the special resolution. If less than 21 days, the company must get consent of 95% of the majority to agree with it.



Question 1 (ii)

Ordinary resolution is defined in Section 145 Companies Act, 1965. It needs 14 days notice for meeting and requires 50% of the members agree with the ordinary resolution.



Question 1 (iii)

Under Section 153 Companies Act, 1965, resolution requiring special notice means not less than 28 days notice to the company or not less than 14 days notice when given by company.



Question 2 (a)

Removal of director under Section 128 (1) Companies Act, 1965

Removal of auditor under Section 172 (4) Companies Act, 1965



Question 2 (b)

Alteration of object clause under Section 28 Companies Act, 1965

Change of company name under Section 23 Companies Act, 1965

Reduction of share capital under Section 64 Companies Act, 1965

Alteration of MA under Section 21 Companies Act, 1965

Alteration of AA under Section 31 Companies Act, 1965



Question 3



Annual General Meeting



According to Section 143 Companies Act, 1965, every company must hold an AGM at least once in every calendar year and not more than 15 months after the last preceding AGM.



Business transacted at AGM



Appointment of director

If it is a public company or its subsidiary, the reappointment of over age director.

Approval for issue of shares by the director discuss in AGM

Declaration of dividend

Retirement and election appointment of director

Auditor remuneration

Company accounts and other businesses



Section 145 (2A) Companies Act, 1965 states that 21 days notice in writing should be given or longer period as provided in the article.



The company can give notice less than 21 days with the consent of all members.



Extraordinary General Meeting



According to Table A Article 43, extraordinary general meeting is defined as any general meeting other than the AGM.



Table A Article 44 states that any director can call for meeting.



Section 145 (1) Companies Act, 1965 states 2 or more members holding not less than 10 % if issued share capital can call for meeting or if the company has not less than 5 % in numbers of the members of the company or such lesser number as is provided by the articles can call for meeting.



Section 150 Companies Act, 1965 states the court may order a meeting on its own motion, or on the applicant of any director or of any member who is entitled to vote or of the PR’s of any such member.



Class Meeting is the meeting where the company has more than one class of shares, it is necessary to call a class meeting to approve any variation of class rights.




Question 4

Under Section 145 (2A) Companies Act, 1965, the company gives 21 days notice in writing should be given or longer period as provided in the article.







Question 5


Quoram is minimum number of members who must be present in the meeting.



According to Table A Article 47, quoram is 2 members personally present includes a proxy.



Section 147 Companies Act, 1965 states that the minimum number of members is 2.



If quoram is not present within half hour of the appointed time, then the meeting is dissolved.





Question 6



Proxy is a person who authorizes to vote on behalf of the member who is unable to attend the meeting.



Section 149 Companies Act, 1965 provides that the proxy need not be a member of the company.



Rights of proxies: -

A proxy has the right to speak at the meeting but cannot vote except on a poll (on a piece of paper).

A proxy has the right to attend meeting.

[GR] A member cannot appoint more than 2 proxies in the same meeting. But if he wants to do so, he must specify what is the percentage of his holdings to be represented by each proxy.

The person who appoints proxies can attend the meeting. In the meeting, he can vote because he is a member. Then the proxies will keep quiet and cannot vote on a poll.

Proxy needs to submit his name as proxy at least 48 hours before the meeting.

If voting by poll, at least 24 hours before the meeting.





Receivership & Winding up


  1. A Receiver may be appointed by a debenture holder or trustee for the debenture holder under a power containing in the debenture A receiver appointed under the debenture is an agent and an officer of the company On the other hand, a receiver also may be appointed by the court upon the application of the debenture holder or trustee for the debenture holder. The receiver appointed by the court is regarded as the officer of the court.



A receiver is a person who takes charge of specific assets of the company. After selling the particular assets, receiver will use the money to settle the debt of the debenture holders. A receiver has no power to manage the business of the company. Whereas a receiver and manager is a person who takes charge of whole assets of the company. The money from realisation of the assets will be used to pay the debenture holders. He has the power to manage the company.



Under Section 182 Companies Act, 1965, the following person are not qualified to act as receivers:



a. Corporations

b. Undischarged bankrupts

c. Mortgagee of any property of the company

d. An auditors of the company

e. An officer fo the same company

f. Any person who is not an approved liquidator or the Official Receiver.





  1. Effect of the receiver’s appointment



· Receiver and manager is in charge of the company’s business and therefore he has the power to manage it.

· The appointment of receiver leads to the crystallisation of floating charge

· Receiver’s appointment does not dismiss the Board of Director.

· Once the debt is paid, the receiver and manager vacates the office and the directors resume the full control.


For receiver, the receivership comes to an end when the receiver has sold the specific assets and has settled the debt with the debenture holders. For receiver and manager, it ends when the he has realised the whole assets of the company and settle the debt with debenture holders.




  1. Types of Winding up:



i. Voluntary winding up



· There are two main category of winding up which are member’s voluntary winding up and creditors’ winding up. The member’s voluntary winding up can proceed if the company is solvent. The director must make a Declaration of Solvency stating the company is solvent and able to pay the debt within 12 months after the commencement of winding up under Section 257(1) Companies Act, 1965. The Declaration of Solvency must be lodged with the SSM according to Section 257(3) Companies Act, 1965. Under Section 254(1)(b) Companies Act, 1965. the company’s members in general meeting pass a special resolution for the company to wind up voluntarily Under Section 258(1) Companies Act, 1965, the members in general meeting appoint a liquidator. According to Section 291(1) Companies Act, if the liquidator thinks the company is unable to pay the debt within 12 months after the commencement of winding up, he must call a meeting of the company’s creditors. Then, a member’s voluntary winding up is converted into a creditors’ winding up.



· Creditors’ voluntary winding up can only proceed provided the company is insolvent and it cannot be initiated by creditors. The creditors may nominate a liquidator. If the members and creditors wish to appoint the different liquidators, the wishes of the creditors prevail.On the other hand. The creditors also appoint a committee of inspection consisting of not more than 5 persons under Section 262 Companies Act, 1965. When the winding up is completed, the company is deregistered




ii. Compulsory winding up



· Compulsory winding up begins with court order




· Under Section 217 Companies Act, 1965, a petition is presented by:

a. The company

b. Any creditor

c. Contributor

d. Liquidator

e. Minister of Domestic Trade and Comsumer Affairs or Finance

f. Bank Negara in the case of insurance companies

g. The Registrar (SSM)

h. Malaysia Deposit Insurance Corporation



· The petition may specific any of the grounds in Section 218 Companies Act, 1965. [From (a)-(n)]



· Proceeding for compulsory liquidation:

i. Petition is presented to the court

ii. A copy is delivered to the company and is also advertised so that other creditors know about it.

iii. The court may either dismiss the petition, adjourn the hearing, make interim order or other order as it thinks fit, or make a winding up order

.




  1. The grounds in Section 218 Companies Act, 1965. [From (a)-(n)]

* No need to memorize all. Any 6 will do.


For Microsoft Word version , please click here.

* Thanks to Yet Ling again for all these answers...

1 comment:

  1. hi, im doing some research regarding receiver manager.i come across ur blog, may i know the books u refer at for the topic of receivership n winding up
    para.2 effect of receiver appointment??thanks.. :)

    ReplyDelete

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