28 June 2022
On 13 May 2022, the Companies Commission of Malaysia (“CCM”) issued a consultative document (“Consultative Document”) to obtain public feedback on the proposed conditions to be imposed on companies limited by guarantee (“CLBG”) under section 45(5) of the Companies Act 2016 (“Act”). Section 45(5) of the Act provides that the Minister of Domestic Trade and Consumer Affairs (“Minister”) may prescribe regulations or impose any conditions as he thinks fit for the purposes of approving the following licences:
- omission of the word “Berhad” or the abbreviation “Bhd” from the name of a CLBG (section 45(3)); and
- holding of land by a CLBG (section 45(4)).
The recommendations in the Consultative Document include:
- proposing standardised licence conditions to eliminate the current practice where the issuance of licences is subject to different sets of conditions;
- allowing a CLBG that has been granted a licence to omit the word “Berhad” or “Bhd” from its name to apply for an extension of time for a further period of six months to fulfil the RM1 million fund condition (currently, such CLBGs are required to obtain the RM1 million fund within six months after the licence has been granted);
- allowing a CLBG which licence has been revoked due to non-compliance of the licence conditions, to make a fresh application under section 45(3) after a cooling off period of three years from the date of the revocation of its previous licence; and
- requiring a CLBG which has been granted a licence to hold land to obtain prior approval from the Minister before owning and disposing any land.