CRG660 Past Year Answers

FINAL ASSESSMENT
CRG660 – COMPANY SECRETARIAL PRACTICE

DATE: 8 FEBRUARY 2022
PART A
No Answer No Answer
1 A 21 D
2 B 22 D
3 B,C 23 B
4 C 24 B
5 A 25 A
6 A 26 D
7 A,B 27 D
8 A 28 D
9 C 29 A, B, D
10 B,D 30 D
11 A,B,C 31 A,B,D
12 C,D 32 A
13 B 33 A
14 D 34 A,B,C
15 C 35 A,C
16 B 36 B
17 D 37 A,C,D
18 D 38 B,C
19 D 39 C
20 C 40 C
PART B
QUESTION 1
A. Najah is a company secretary for BoardRoom Sdn Bhd, a well-known Malaysian company
that provides professional company secretarial service to private and public companies in
Malaysia. For the last few months, Najah has failed to contact the directors of JutaOne
Sdn Bhd, one of the BoardRoom’s clients. The firm tried all means of communication to
contact the directors, such as sending letters, emails but no positive reply was received.
None of the directors answered the phone calls either. Najah is now considering vacating
the office of the company secretary of JutaOne Sdn Bhd.
Required:
a. Discuss the relevant procedures according to the Companies Act 2016 that
allows the company secretary to vacate the office and the required documents
to be lodged with the Registrar.
(4 marks)
Resignation of a company secretary:
• Section 237 of Companies Act 2016 states that if no director is contactable at the last
known residential address, the company secretary may notify the Registrar of facts of
his intention to resign. √
• A secretary may submit a notice of intention to vacate the office of secretary to the
Registrar within 14 days of the company secretary’s resignation or vacation of office. √
• The notice must be accompanied with supporting evidences that none of the directors
can be communicated. √
• Where notice was given to the Registrar, the secretary ceases to be the company’s
secretary on the expiry of 30 days from the date of the notice lodged √.
b. Assuming Najah does not vacate the office of company secretary of

BoardRoom Sdn Bhd, assess whether Najah is held liable for any act or
omission in her capacity as a company secretary.
(6 marks)
Exclusion of liability of a company secretary:
• The company secretary is a corporate officer √. As such, he cannot be exempt from,

or indemnified in respect to any liability for negligence, default, breach of duty or
breach of trust, of which he may be guilty in relation to the company √.
• In this regard, if a company secretary had purchased a professional indemnity insurance,
Section 289 provides that a company shall not indemnify or directly or indirectly
effect insurance for an officer or auditor of the company in respect of (a) the liability
for any act or omission in his capacity as an officer or auditor; or (b) the costs incurred by
that officer or auditor in defending or settling any claim or proceedings relating to any
such liability. √√
• But a company may indemnify an officer or auditor of the company for any costs
incurred by him or the company in respect of any proceedings— (a) that relates to the
liability for any act or omission in his capacity as an officer or auditor; and (b) in which
judgment is given in favour of the officer or auditor or in which the officer or auditor is
acquitted or in which the officer or auditor is granted relief under this act, or where
proceedings are discontinued or not pursued. √√
B. Beruntung Sdn Bhd has been experiencing cash flow problems. In 2018, it borrowed RM1
million from Mercury Bank. The company secured the loan with the company’s land, and
the charge was registered with the Land and District Office but not with the Companies
Commission of Malaysia (SSM).
Later in 2019, Beruntung Sdn Bhd borrowed a further RM1 million from Mercury Bank.
The company secured the loan using its book debt and registered the charge with the
SSM.
Recently, the court made an order for the winding-up of Beruntung Sdn Bhd on the
application of Ezy Ringgit Sdn Bhd, a creditor who had, one year ago, granted the
company a loan on a floating charge, secured on all the assets and undertaking of the
company. The company registered the charge with the SSM, and a liquidator was
appointed.
Required:
a) Compare TWO (2) types of charges granted by Beruntung Sdn Bhd to Mercury Bank.
(4 marks)
Types of charges:
• A fixed charge is a charge created on a fixed asset of the company. √

• The charge attaches to the assets and therefore the company cannot sell or otherwise
dispose of the asset except with the prior permission of the lender. √
• The floating charge is usually created not on a specific asset of the company but on
a class of assets for example on receivables, book debts and undertakings of the
company. √
• After the creation of the charge, the company is free to continue to deal with or
dispose of the assets in the ordinary course of the company’s business, until the
lender takes steps to enforce their security or crystallisation otherwise occurs. √
b) Discuss the fixed charge registered with the SSM in favour of Mercury Bank and the
priority between the charges in favour of Mercury Bank and Ezy Ringgit Sdn Bhd.
(6 marks)
• Under the Companies Act 2016, charges which require registration must be
registered with the SSM within 30 days of their creation. √
• Thus, the fixed charge in favour of Mercury Bank should have been registered within 30
days of its creation. The fact that it was registered with the land office does not exempt
the company from registering the charge with the SSM. √
• Failure to register the charge within the stipulated period would render the charge void
against the liquidator and any creditor of the company. √
• Thus, the fixed charge will not be valid against Ezy Ringgit Sdn Bhd. Both liquidator and
Mercury Bank would become unsecured creditor with respect to the loan of RM1 million
granted to Beruntung Sdn Bhd. √
• Thus, Ezy Ringgit Sdn Bhd will have priority over the proceeds of the sale of the land. √
• With regards to Mercury Bank’s floating charge and Ezy Ringgit Sdn Bhd’s floating
charge, Mercury Bank will have priority as it was created and registered before Ezy
Ringgit Sdn Bhd’s floating charge. √
A. Terlajak Cantik International Bhd is a local cosmetic company that was recently
converted its status to a public company. The company currently has two directors, Datin
Hanisah and Datin Layla. Apart from the new strategic plan for the company, the
directors intend to appoint a new managing director and an additional non-executive
director. As the company secretary, they seek advice on the following matters:
a) The procedure to appoint a new Non-Executive Director in a public company
(6 marks)
Appointment of new directors in public companies must be made in a general

meeting √ by a single resolution unless it has been resolved without dissent to vote
on them together √, (s 203) This means that prior to the passing of the motion for
appointing the directors, there must first be a preliminary resolution √ passed
unanimously that decides to move a resolution for the appointment of the directors
in one resolution √. If this preliminary procedure is not complied with √, a resolution
purportedly appointing the directors in one resolution will be void √ and no one
named in that resolution will in fact have been appointed.
b) The terms of appointment as a Managing Director of the company

(4 marks)
The appointment of a managing director is usually provided in the constitution√ and

the board gives power to appoint a managing director. √ The constitution must first
be altered if there is no such provision in the constitution. √ The directors will decide
on the terms and conditions of the appointment and the managing director will sign
a contract of service. √ The managing director shall not, subject to the retirement by
rotation√ and that his appointment shall be terminated if he ceases from any cause
to be a director√ or when the contract expires. √ The board at any time may terminate
his office, even though his term of service has not yet expired. √
B. Mr Raymond is another non-executive director. Mr Raymond has not been given his total
commitment to his duties and responsibilities as a company director. Datuk Kassim is
annoyed with Mr Raymond's lack of commitment and asked whether there are any
provisions under the Companies Act 2016 to remove him.
(10 marks)
As the company they intend to incorporate is a public company (Berhad), Sec. 206 of the
CA 2016 applies to the removal of directors. √ Under Sec. 206, members of a public
company can remove a company director by passing an ordinary resolution. √ This means
the meeting requires a 14 days’ notice of meeting to be sent to members of the company.
√ The member who wishes to remove the director must give special notice to the company.
√ Special notice is defined in Sec. 206 which provides that the company must be given
prior notice of at least 28 days before the intended removal of the director. √ The company
must provide the director with a copy of the special notice as he has the right to defend
himself. √ The director can either provide a written response against his removal or can
attend and speak at the meeting that is held to remove him. √ The removal of the director
only takes effect when the ordinary resolution is passed by members at the general
meeting. √ Where the director that is to be removed represents the interest of a specific
class of shareholders that director cannot be removed unless his successor has been
appointed. √ Where a director’s removal results in the company having breached its
contractual obligations to the director, the director is not prevented from suing the
company for compensation. √
QUESTION 3
A company that ceased to exist as a corporate entity is planning to dissolve. The Registrar will
strike off the company's name from the Register of Companies, and the company shall also get
this fact published in the Official Gazette. Thus, the dissolution puts an end to the existence of
the company. The company may also dissolve by transferring the company's undertaking to buy
over another via a reconstruction or amalgamation scheme. In such a case, the transferor will
dissolve without being wound up. Secondly, it is through the winding up of the company. In this
manner, the company paid all its liabilities via the realization of the company's assets. The surplus,
if any, is distributed to the members of the company by their rights.
Required:
a) Determine the situation that the Registrar has the power under Section 549 to strike a
company off the register.
(6 marks)
a) The situation that the Registrar has the power under Section 549 to strike a company off the
register:
1) The company is not carrying on business or is not in operation√

2) The company has contravened the Act√
3) The company is being used for unlawful purposes or any purpose prejudicial to or
incompatible with peace, welfare, security, public interest, public order, good order or
morality in Malaysia√
4) In any case where the company is being wound up and the Registrar has reasonable
cause to believe that:
a. no liquidator is acting; √
b. the affairs of the company are fully wound up and for a period of six months the
liquidator has been in default in lodging any return required to be made by him; √
or
c. the affairs of the company have been fully wound up under a winding up by the
Court and there are no assets or the assets available are not sufficient to pay the
costs of obtaining an order of the Court dissolving the company. √
b) Justify any SIX (6) basis for any person to lodge a “Notice of Intention to Object Striking
Off of A Company Application” with the Registrar.
(6 marks)
b) SIX (6) basis for any person to lodge a “Notice of Intention to Object Striking Off of A Company
Application” with the Registrar:
1) That the company is still carrying on business or there is other reason for it to continue in
existence√
2) That the company is a party to legal proceedings√
3) That the company is in receivership or liquidation, or both√
4) That the person is a creditor or a member or a person who has an undischarged claim
against the company√
5) That the person believes that there exists and intend to pursue, a right of action on behalf
of the company√
6) That for any other reason, it would not be just and equitable to remove the company from
the register√
c) Explain any TWO (2) provisions applicable to every winding up regarding its books and
papers of the company.
(4 marks)
TWO (2) provisions applicable to every winding up in respect to books and papers of the
company:
1) Every liquidator shall keep proper books and papers in which he shall cause to be made
entries or minutes of proceedings at meetings, and any creditor or contributory may,
subject to the control of the Court, personally or by his agent inspect the proper books and
papers√√
2) When a company has been wound up, the liquidator shall retain the books and papers of
the company for a period of five years from the date of dissolution of the company and at
the expiration of that period, may destroy the book and papers√√
d) Discuss any FOUR (4) duties of the Registrar concerning the management of assets of a
dissolved company.
(4 marks)
d) FOUR (4) duties of Registrar with regard to management of assets of dissolved companies
after a company has been dissolved:
1) Registrar may represent the company or its liquidator to carry out, complete or give effect
to some dealing, transactions or matter if it is proved that the company would be legally
bound to do so√
2) Registrar may execute or sign any relevant instrument or document stating that he has
done and the execution or signature shall have the same force, validity and effect as if the
company is still existing√
3) Any outstanding property which was not realized or disposed off before the dissolution
shall be vested with the Registrar√
4) Registrar may sell or dispose off or deal with such estate or interest in property as he
thinks fit√
5) Property vested in the Registrar is subject to all charges, claims and liabilities imposed
thereon√
6) Registrar shall record in the register a statement of any property vested in him and keep
all accounts, vouchers, receipts and papers relating to the property and moneys√
FINAL EXAM JULY 2021
CORPORATE SECRETARIAL PRACTISE (CRG660)
PART A – 40 QUESTIONS (40 MARKS)

SUGGESTED SOLUTIONS
No Answer No Answer
1 True 21 C
2 False 22 D
3 A,C,D 23 B
4 A,C,D 24 B,C
5 A,B,D 25 A,C,D
6 True 26 True
7 False 27 D
8 D 28 A,C,D
9 B 29 False
10 True 30 B,C,D
11 B 31 True
12 A 32 C
13 False 33 A,C
14 B 34 A
15 A,B,C 35 C
16 A,B,C 36 False
17 False 37 A,B
18 True 38 B,C
19 A,B,C 39 B
20 C,D 40 True
PART B
SUGGESTED SOLUTIONS
QUESTION 1
PART A
For the past year, you have served as a company secretary for JWK Sdn Bhd. However, Encik
Amri, the company's sole director, has been tough to reach in recent months. You tried
sending electronic mail and WhatsApp messages but received no response. The letters sent
to his private address were returned. Even worst, he was not answering his phone.
You are considering resigning from your position as the company secretary of JWK Sdn Bhd.
a) Explain the steps you may take to vacate the office of a company secretary.
(5 marks)
In situation where none of the directors can be communicated with at the last known
address, Notice of Intention to Vacate the Office of Secretary √ should be submitted to
Registrar (CCM) √ and shall cease to be the secretary of the company on the expiry of
30 days √ from the lodgement of the notice. However, the secretary is not relieved from
liability √ for any act done or any omission before he or she vacates office√.
1
PART B
Encik Yusof has recently incorporated a public manufacturing company named Syntex Bhd
with two of his friends, Encik Danial and his wife, Puan Sara. They are also the first subscribers
and directors. You have been appointed as the first company secretary of Syntex Bhd and is
required to advise the board of directors about procedures upon incorporating a public
company. Immediately after getting a notice to commence business, you are required to
convene a board meeting to deal with certain formalities to commence business.
Before convening the first board of directors’ meeting, Encik Yusof requested information
regarding proceedings of the shareholders meeting, its requirements, and types of resolution.
He is also suggesting for a written resolution to be carried out to resolve the difficulties that
they will have to face in convening a shareholders meeting during this COVID-19 pandemic.
Required:
a) Explain briefly any six (6) agendas for the first board of directors’ meeting of Syntex Bhd.
(6 marks)
b) Describe the proceedings of the meeting relating to the quorum by Section 328,
Companies Act 2016.
(5 marks)
c) Advise Encik Yusof on the option of a written resolution during the COVID-19 pandemic
for Syntex Bhd as provided by the Companies Act 2016.
(4 marks)
(Total: 20 marks)
PART B
a) Explain briefly any six (6) agendas for the first board of directors’ meeting of Syntex Bhd.
(6 marks)
1. The statutory registers and common seal have to be ordered and produced at the first
meeting of directors.
2. A bank should be appointed and signatories to cheques designated.
3. Pre-incorporation contracts should be ratified and adopted, if any.
4. Stationery bearing the company’s full and correct name and company number must
be printed where the stationery is to be for outside use.
5. The registered office should be confirmed, and the proper sign affixed.
6. Books of accounts must be purchased. (Note that this is not within the scope of a
company secretary’s duties unless specified by the company.)
7. The design for share certificates must be prepared, adopted and printed.
8. Minute books for the various meetings — annual general meetings (AGMs) for a public
company, general meetings and directors’ meetings should be purchased.
9. Ensure that the necessary contracts for services are drawn up.
10. The first auditor must be appointed.
11. A tax agent or GST agent should also be appointed to take care or taxation and GST
matters.
b) Describe the proceedings of the meeting relating to the quorum by Section 328,
Companies Act 2016.
(5 marks)
2
● Quorum is the minimum number of members who must be present at the meeting. ( )
● Section 328(2) prescribed that there must be at least two members personally present
at a meeting( ) or by proxy unless a higher number is specified in the constitution. ( )
● Section 328(3) provides that in counting the quorum, members shall include proxy and
corporate representative. ( ) Thus, there is quorum even if no member is personally
present unless the company has only one member. ( )
● Section 328(4) provides quorum is required at the commencement of the meeting. ( )
However, it must be stressed that if the quorum is only two, then it must be maintained
throughout the meeting. There cannot be a meeting of one person. ( )
● The meeting should be adjourned if the number of attendees present at the meeting
falls below the quorums. This is because if the meeting proceeds without any quorum,
the validity of the proceedings when the quorum is not fulfilled in invalid. ( )
c) Advise Encik Yusof on the option of a written resolution during the COVID-19 pandemic
for Syntex Bhd as provided by the Companies Act 2016.
(4 marks)
● Written resolution is not allowed for Syntex Bhd. ( ) In accordance to Section

297(2) only private companies can pass a written resolution unless the resolution is
on the removal of a director or an auditor before the expiration of his term. ( )
● The written resolution may be proposed by the directors or by any member holding at
least 5% of the voting rights in the company. ( )
● The written resolution is passed once the required majority of members have signified
their agreement. ( )
QUESTION 2
Winding up a business is not the same as bankruptcy, though it is usually a result of

bankruptcy. Bankruptcy is a legal proceeding that involves creditors attempting to gain access
to a company's assets to settle the debt due by the company. Although there are various types
of bankruptcy, the proceedings can help a company emerge as a debt-free new entity and
usually smaller.
Winding up is the process of dissolving a company. While winding up, a company ceases to
do business as usual. Its sole purpose is to sell off stock, pay off creditors, and distribute any
remaining assets to partners or shareholders. Conversely, once the winding-up process has
begun, a company can no longer pursue business as usual. The only action they may attempt
is to complete the liquidation and distribution of its assets. At the end of the process, the
company will be dissolved and will cease to exist.
Required:
a. List six (6) persons who may petition to call for a compulsory winding up.
(6 marks)
b. Briefly describe the commencement of a compulsory winding up.

(4 marks)
c. If the company itself is the petitioner, briefly explain the procedure to wind up the
company.
(4 marks)
d. Since the company has difficulty paying its debts, explain three (3) circumstances when
a company is said to be unable to pay its debts.
(6 marks)
3
(Total: 20 marks)
SOLUTION
a. List six (6) persons:

- The company itself√
- A creditor√
- A contributory or personal representative of a contributory or the trustee of a
bankrupt contributory or the Director General of Insolvency√
- The liquidator√
- The Minister Charged with the responsibility for companies on the grounds under
section 465√
- Bank Negara Malaysia√
- The ROC√
- The Malaysia Deposit Insurance Corporation√
b. Briefly describe:
- The compulsory winding up commences on the day of the winding up order
(s467(2)). √√
- If the company passes a resolution to voluntarily wind up before the presentation
of winding up petition, the winding up commences at the passing of members’
resolution (s467(1)). √√
c. If the company itself is the petitioner, briefly explain the procedure:

- The company has passed a special resolution that the company be wound up by
the court (s465(1)(a)) √
- Then, either the company itself or a contributory of the company may present a
petition to wind up the company√
- The contributory must fulfil any of the conditions prescribed in section 464(2)(a) √
- It is immaterial whether the company is solvent or insolvent√
d. Explain three (3) circumstances:

- The creditor is owned a sum exceeding the amount prescribed by the Minister. √√
- The creditor has obtained judgement against the company. √√
- The court is satisfied that the company is unable to pay its debts after considering
the company’s contingent and prospective liabilities. √√
4
QUESTION 3
PART A
Senja Salju Sdn Bhd (SSSB) is a private company. The chairman of the company is seeking
your view on the following matters:
a. One of the shareholders, Puan Nur Huda, wants to give her shares worth RM25,000
to her son Encik Fauzi. However, she is confused between the transfer and
transmission of shares.
Explain with example the differences between transfer and transmission of shares.
(6 marks)
Solution:
Transfer
● Ownership of the share changes by voluntary act √

● The action involves only, the transferor, transferee and the company √
● Example: Owner sells his share to the new owner, giving away as a gift √
Transmission
● Ownership of the share changes by operation of law √

● The transmission might also involve other parties such as administrator, receiver,
and even a court order may also be required. √
● Example: transmission of shares due to death, bankruptcy or lunacy √
b. Briefly explain FOUR (4) reasons for a company to purchase its shares.
(4 marks)
Solution:
The reasons for a company to purchase its shares are:
● To support, share price during a depressed period by controlling demand and
supply of the shares. √
● To distribute surplus cash to shareholders in lieu of cash dividends. √
● To improve capital structure – to modify leverage, gearing and debt equity
ratio. √
● To provide a means for utilizing surplus cash.
● Defense against a hostile takeover attempt by reducing public shareholding.
(to mitigate hostile takeover) √
PART B
5
Registration of charges with the CCM is designed to assist the secured creditor and at the
same time give notice to all those doing business with the company of the total amount of the
company’s debts. The CA 2016 provides that certain charges given by companies must be
lodged for registration with the Registrar.
Required:
a. List any SIX (6) categories of charges that must be lodged with the Registrar for
registration.
(6 marks)
b. The statement containing Particulars of a Series of Debentures must be registered with

the registrar within 30 days from the date of execution of the instrument.
Briefly explain the particulars of the statement.

(4 marks)
(Total: 20 marks)
SOLUTION
PART B:
a. Any six of the followings:
(1) charges to secure any issue of debentures
(2) charges on uncalled share capital of a company
(3) charges on shares of a subsidiary of a company which are owned by the company
(4) charges created by an assignment created or evidenced by an instrument which if
executed by an individual within Peninsular Malaysia and affecting property within
Peninsular Malaysia would be invalid or of limited effect if not filed or registered under
the Bills of Sale Act 1950
(5) charges on land wherever situated or any interest in the land
(6) charges on book debts of the company
(7) floating charges on the undertaking or property of the company
(9) charges on ships or aircrafts or any share in a ship or aircraft;
(10) charges on goodwill, patents or licence under a patent, trade mark, or on a
copyright or a licence under a copyright;
(11) charges on the credit balance of the company in any deposit or account.
b. The FOUR (4) particulars are:

(a) the total amount secured by the whole series;
(b) the dates of the resolutions authorising the issue of the series and the date of the
covering instrument, if any, by which the security is created or defined;
(c) a general description of the property charged; and
(d) the names of the trustee, if any, for the debenture holders.
6
FINAL EXAM
CORPORATE SECRETARIAL PRACTISE (CRG660)
SUGGESTED SOLUTION
PART A – 40 QUESTIONS (40 MARKS)
No Answer No Answer
1 C 21 A,B,C
2 True 22 C,D
3 A 23 A
4 False 24 False
5 D 25 A,C
6 C 26 True
7 D 27 D
8 C 28 B,C
9 A,B 29 A,D
10 False 30 True
11 D 31 True
12 False 32 B
13 D 33 False
14 False 34 True
15 False 35 A,B,C
16 C 36 False
17 True 37 A,B
18 False 38 D
19 True 39 B
20 False 40 C
PART B
SUGGESTED SOLUTIONS
QUESTION 1 (A)
Dato’ Tazzudin Ramzey, a professional engineer and Datuk Kushairie Ahmad, a

professional architect have decided to venture into a property development business after
having been in employment for more than 25 years. Although their business, TRKA Bhd,
has only been in operation for the last 1 year, they manage to secure many big projects. In
fact, getting approval for bank facilities is not an issue for them. As experts in their
respective professions, they still lack the experience and know-how of managing a
company. They are aware that any non-compliance to rules and regulations can tantamount
to heavy penalties under the Companies Act 2016 (CA 2016) and also by the Regulators.
Hence, they intend to bring in more independent directors into the company and have seek
your advice on some pertinent issues. As a company secretary, it is your duty to advise on
the following areas of concern.
Required:
a) Briefly explain three (3) criteria of a non-executive director

(3 marks)
The criteria are:
i. He does not receive salaries and benefits because they do not hold
any management posts
ii. He receives a director fees which is determined by the
member/shareholder at general meeting
iii. Their sole function is to determine/agreed the overall policy of the
company, contribute to discussion and decision making.
iv. Carries independent function in BOD
(Any 3 x 1 mark = 3 marks)
b) Discuss the items to be included in the declaration a person before he can be

appointed as a director of a company.
(4 marks)
The directors have to make a declaration covering the followings:
i. He is not an undischarged bankrupt

ii. He has not been convicted whether within or outside Malaysia any
offence
iii. He has not been imprisonment for any offence within the period of 5
years immediately preceding the date of the declaration
iv. He consents to act as director of the company
(4 x 1 mark = 4 marks)
c) Discuss the effect of disqualification of a person as director of a company.

(6 marks)
The effects of disqualification of a director are as follows:
i A director is guilty of an offence if he still holds office as a director

whether directly or indirectly. However, any acts carried out by him
remain valid although he is disqualified.
ii The director shall be responsible for any defects found during his
appointment that may be discovered later with regards to his
disqualification
iii The reason is to protect the outsiders/public who have entered into
transactions with the company
iv If there is only one director in the company, and he is disqualified,

effectively the company without director and his office is vacated upon
happening of any of those events.
v Upon disqualification of a director, a casual vacancy is created and the

BOD shall have power to appoint any person to fill the casual vacancy
QUESTION 1(B)
Companies listed on Bursa Malaysia are permitted to buy back their own shares from the
stock brokers and such shares are called treasury shares. CA 2016 provide that where
shares are held as treasury shares, the company shall hold such shares in a securities
account in accordance with the relevant rules of the stock exchange or the central
depository as defined in section 146, as the case may be.
Required:
a) Provide three (3) actions that can be made by directors of the company pertaining to
treasury shares
(3 marks)
b) Explain the impact on the shareholders whose shares are being bought back by the
company
(4 marks)
ANSWER:
Companies listed on Bursa Malaysia are permitted to purchase back their own shares from
the stock brokers and called such shares as treasury shares. CA 2016 provide that where
shares are held as treasury shares, the company shall hold such shares in a securities
account in accordance with the relevant rules of the stock exchange or the central
depository as defined in s 146, as the case may be.
Required:
a) Provide three (3) actions that can be made by directors of the company pertaining to
treasury shares
(3 marks)
i) distribute the treasury shares as dividends to shareholders, such
dividends to be known as “share dividends”;
ii) resell the treasury shares or any of the treasury shares in accordance with
the relevant rules of the stock exchange;
iii) transfer the shares, or any of the shares for the purposes of or under an
employees’ share scheme;
iv) transfer the shares, or any of the shares as purchase consideration;
v) cancel the shares or any of the shares; or
vi) sell, transfer or otherwise use the treasury shares for such other purposes
as the Minister may by order prescribe.
b) Explain the impact on the shareholders whose shares are being bought back by the
company
i) No right to attend or vote at meetings and any purported exercise of such

rights is void;
ii) and No right to receive dividends or other distribution, whether cash or
otherwise, of the company’s assets including any distribution of assets
upon winding up of the company.
(2 x 2 = 4 marks)
(Total: 20 marks)
QUESTION 2
The annual general meeting (AGM) season for Singgah Maju Bhd is currently under way,
with a financial year ending on 30 June each year. However, due to the outbreak of Covid-
19, the company should rethink its arrangements for the AGM, taking into consideration the
potential bans on large gatherings, travel restrictions and the risk that venues selected for
the meetings may not be available due to unexpected closures.
The Board of Directors of Singgah Maju Bhd called for an urgent meeting to discuss on the
possibility of holding the current year AGM virtually. The previous AGM of the company was
held on 15 November 2019. As the company secretary, you are required address the
following issues:
a) Discuss briefly the last date for convening the AGM 2020 in accordance with the CA
2016
(5 marks)
Sec. 340 of the CA 2016 provides that every public company must convene AGM
in every calendar year.
The AGM shall be held within 6 months of the company’s financial year end ; and
not more than 15 months after the last preceding AGM.
After considering all factors above the AGM shall be convened latest by 31
December 2020.
However, the company may apply to CCM to extend the period of 15 or 18 months
and CCM may if it thinks fit extend the period.
b) Explain how the requisite of a valid meeting in the AGM still can be fulfilled when it is
being conducted virtually.
(6 marks)
The requisites of a valid meeting are as follows:
1. Meeting must be properly convened
A notice of the meeting should be issued to every member, director and

auditor of a company. A notice of the meeting must clearly state that the
meeting will be “Fully Virtual” and should contain the necessary information
(such as the place where it is going to be broadcast live, time, date and the
type of meeting)
.
2. Meeting must be properly constituted.
Quorum is the minimum number of persons who must be present at the

meeting. A member has the right to appoint another person to attend the
meeting on his behalf, known as a member’s proxy. CA 2016 does not specify
the maximum number of proxies that a member can appoint. Shareholders will
NOT be physically present at the broadcast venue on the day of the AGM.
Thus, shareholders shall register their attendance remotely by using the
Remote Participation and Voting (RPV) facilities.
3. Meeting must be properly conducted
The constitution usually provided for the appointment of a chairman.

Generally, meetings are conducted by voting by hand, unless voting by poll is
demanded and the chairman may decide to vote by hand or by poll. In virtual
AGM Remote Participation and Voting (RPV) facilities also going to be used for
counting the vote.
c) Explain the general rules on voting with regards to section 293(1) of Companies’ Act
2016.
(4 marks)
1. In the case for companies having a share capital

(a) On a vote on a written resolution, every member shall have one vote in
respect of each share or stock hold by him.
(b) On a vote on a resolution on a show of hands at a meeting, every member
shall have one vote.
(c) On a vote on a resolution on a poll taken at a meeting, each share is
entitled one vote.
2. In the case for companies not having a share capital, every member shall
have one vote.
d) Explain to the Board, your action plans to ensure that future AGMs of the company will
be held effectively and are well prepared for any possibilities.
1. Confirm the date of the meeting with the board, registrars, advisers and
others required to attend.
2. Estimate number of attendees.
3. Prepare and send out notices of meeting, annual reports and proxy form.
4. Organize and book suitable venue for the meeting.
5. Prepare and discuss with the Chairman an order of proceedings, setting out
various resolutions to be passed at the meeting.
6. Ensure the Chairman is primed with a suitable script to deal with the meeting
so that he (or she) is not taken completely by surprise.
7. Make appropriate arrangements in accordance to the current scenario. For
example, consider the layout of the meeting room and make sure there will be
some distance between the board and the attendees.
8. If necessary, employ a security organization for the meeting taking into
consideration the state of security in the country.
(Any 5 x 1 mark = 5 marks or any suitable answers)
(Total: 20 marks)
QUESTION 3
Muntajat Sdn Bhd (MSB) is a SME with its registered office in Sepang, Selangor. It was
incorporated in January 1995 as “Muntajat Manzila Sdn Bhd” before becoming a public
listed company in 2002 under the then second board of the Kuala Lumpur Stock Exchange
(now Bursa Malaysia). The public listed company used the name “MM Bhd” and was mainly
involved in the production of halal household products.
After 7 years of profitable business, MM Bhd faced serious setbacks in its business
operations due to poor governance and declining demand for its products. Some of its
business assets have to be sold in 2010 to repay its loans, and some of the assets were
placed under receivership. Finally, in 2013, MM Bhd sold its business to another public
listed company. Through a series of share buybacks and capital reduction exercises, MM
Bhd managed to downsize the company and in 2017 finally changed its status into a private
limited company, using the name Muntajat Sdn Bhd (MSB).
MSB is practically a dormant company with the exception of a few activities. It still pays a
regular payment to July Bank Bhd (JBB) for the piece of land and the building used as its
registered office. Both assets have been charged to JBB. It also spends on administrative
expenses. In 2019, the Board decided to cease the operation of the company.
Required
a. Is it possible for MSB to apply for deregistration? Explain.

(3 marks)
No. The company still have assets, outstanding liabilities, and entries at the
registrar of charges .
b. Since MSB has not been actively involved in business, JBB is concerned that MSB may
not be able to make its installment and finally finishes its loan.
i. What can JBB do to recover its loan?

(2 marks)
JBB can apply to the court to appoint Receivers and Managers to take control
of the charged assets with a view of disposing them in order to settle the debts
owing to JBB.
(2 at 1 mark each = 2 marks)
** Give one mark is student’s answer is “apply for compulsory winding up”.
ii. Explain the process of compulsory winding up.

(6 marks)
First, an aggrieved party will petition to the court to issue an order for the
company to be dissolved. The court will decide, based on the evidences, if a
compulsory winding up order is just and equitable to all parties
Next If the court issues dissolution order, the company will call up
i. an EGM to pass a special resolution to dissolve the company
ii. A creditor meeting to approve the appointment of liquidator and appoint
an inspection committee.
Finally The liquidator will collect the assets of the company, realize them
and pay off the creditors.
iii. Explain the effects of a liquidator’s (3 marks)

appointment in a dissolution
• the directors' powers will

cease
• any transfer of shares or any alteration in the status of members will be

void
• business activities must cease (unless as allowed by the liquidator).
iv. Explain the functions of a committee of inspection in the dissolution process

(4 marks)
i. To advise and assist the liquidator of the company;

ii. To give directions to the liquidator of the company;
iii. To monitor the conduct of the liquidator of the company;
iv. Such other functions as are conferred under the Act;
v. To do anything incidental of conducive to the performance of any of the
above functions
(Any 4 at 1 mark each = 4 marks)
c) If the investigation of the liquidator of a company undergoing member’s voluntary

dissolution discovered that for the past 6 months the company was unable to fulfil its
obligations. Suggest a tentative option that the liquidator should take.
(2 marks)
The liquidator will need to arrange for a creditor’s voluntary liquidation

(Total 20 marks)
CONFIDENTIAL 1 AC/JULY2020 ODL /CRG530/660
PART B
QUESTION 1
a. Discuss the terms of appointment for a Managing Director.
The appointment of a managing director is usually provided in the constitution√ and the
board gives power to appoint a managing director. √ The constitution must first be
altered if there is no such provision in the constitution. √
The directors will decide on the terms and conditions of the appointment and the
managing director will sign a contract of service. √ The managing director shall not,
subject to the retirement by rotation√ and that his appointment shall be terminated if he
ceases from any cause to be a director√ or when the contract expires. √ The board at
any time may terminate his office, even though his term of service has not yet expired.
√
(Any 6√ x 1 mark each = 6 marks)
b. In your own words, state the required form and the declaration to be made by a person
before his appointment.
The form is known as - Declaration by a person before appointment as director or by a

promoter before incorporation of a corporation. √
Declarations to be made by a director:

• He is not an undischarged bankrupt √
• He has not been convicted of any offence:
- In connection with the promotion, formation or management of a corporation √
- Involving fraud and dishonesty punishable on conviction with imprisonment for
three months or more; or √
- Under Companies Act 2016 (liability where proper accounts not kept) within a
period of five years preceding the date of declaration √
• He has not been imprisoned for any offence referred to (ii) above within the period
of five years immediately preceding the date of the declaration √
• He has consented to act as a director of the company √
(Any 6√ x 1mark each = 6 marks)
c. In your own words, advise Gary, Larry and Jerry on the relevant provisions in the
Companies Act 2016 on loans to directors and the exceptions to the rule.
Loans to directors
Section 224 of the Act states that a company (other than an exempt private company)
√ shall not
• Make a loan to a director of the company, or √
• Make a loan to a director of a company which is deemed to be related to the
company. √
• Enter into any agreement or provide any security in connection with a loan made
to such director. √
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

Exceptions to the rule are:
• Funds provided to a director to meet expenditure incurred or to be incurred by him

for the purpose of the company or for purpose enabling him to perform his duties. √
• Funds were given by the company to a director who is engaged in the full-time
employment√ of the company or its holding company to meet expenditure incurred
or to be incurred by him in purchasing or acquiring a home. √
• Any loan given to a director who is engaged in the full-time employment √ of a
company or its holding company, where the company has at a general meeting
approved of a scheme for the making of loans to employees of the company. √
(8√ x 1 mark each = 8 marks)
(Total: 20 marks)2
QUESTION 2
a. Explain to the board of directors of Vector Bhd the various options available for them to
issue share capital.
1. Public issue √
A direct allotment, where the shares are issued and allotted directly to members of
the public who have subscribed the shares. √
2. Offer for sale √
A company allots or place shares to an issuing home which then will offer them for
sales to the public. Where a private company seeks to ‘go public’, a portion of the
shares held by the existing shareholders may be offered for purchase by members
of the public. √
3. Right issue √
A right is an offer (in contractual sense) to the existing members of a Vector Bhd of
new share for subscription. √
(6√ x 1 = 6 marks)
b. In your own words, explain the characteristic of debentures.
Characteristics Explanation
1.Form The form of debenture. Eg debenture stock, loan stock, bond,
redeemable debenture.
2.Redeemability Whether redeemable with a specified period or only upon the

occurrence of various specified contingencies.
3.Security Whether secured on the property or undertaking of the company

or not and if secured, whether by way of fixed or floating charge.
4.Interest The interest the debenture yield.
(8√ x ½ = 4 marks)

c. In your own words, Briefly explain the phrase “crystallization of floating charge”. State
the events that may cause the crystallization of the charge.
“crystallization of floating charge” means floating charge will be converted to fixed charge.
√
Events that cause crystallization:
i) Default in repayment of interest and principal sum √

ii) On the commencement of winding up or when the company cease business √
iii) When there is a clause charge will crystallization upon breach of certain
condition. √
(4√ x 1 = 4 marks)
d. Discuss the circumstances where the issuance of debentures is preferred than the
issuance of shares.
i. When company wishes to obtain addition capital for investments but existing
shareholders do not wish to lose control of company. The issuance of new ordinary
shares would confer the shareholders full right of voting and thereby the shareholder
will be able to participate in the running of the company.
For the issuance of debentures, the holders of the debentures do not have rights to
vote at a general meeting hence holders have no special ability to exercise control and
participate in the running of the company. √√
ii. When company wishes to obtain capital for investment but existing shareholders do
not wish their existing shares to be diluted. The issuance of debentures with no rights
for conversion into equity shares on maturity would help the company to achieve its
objective to secure adequate financing while conserving the shareholders’ rights (no
dilution of shareholders’ shareholding). √√
iii. When company wishes to obtain additional capital for investments but existing
shareholders want their exposure to be quantified and no sharing of future profits. The
interest payable on the debentures is usually fixed on issuance, though normally higher
than the prevailing interest rate to attract takers. The company would be able to
calculate and know the total amount of interest to be paid on borrowings. In addition,
when company made much profits, such profits need not be shared as in the case for
issuance of ordinary shares where all shareholders would be entitled to dividend if a
dividend is declared on the shares. √√
(6√ x 1 = 6 marks)
(Total: 20 marks)

QUESTION 3
a. List six (6) persons who may petition to call for a compulsory winding up.
- The company itself√
- A creditor√
- A contributory or personal representative of a contributory or the trustee of a
bankrupt contributory or the Director General of Insolvency√
- The liquidator√
- The Minister Charged with the responsibility for companies on the grounds under
section 465√
- Bank Negara Malaysia√
- The ROC√
- The Malaysia Deposit Insurance Corporation√
(Any 6√x1mark = 6marks)
b. Briefly describe the commencement of a compulsory winding up.

- The compulsory winding up commences on the day of the winding up order
(s467(2)). √√
- If the company passes a resolution to voluntarily wind up before the presentation
of winding up petition, the winding up commences at the passing of members’
resolution (s467(1)). √√
(4√x1 mark = 4 marks)
c. If the company itself is the petitioner, briefly explain the procedure to wind up the
company.
- The company has passed a special resolution that the company be wound up by
the court (s465(1)(a)) √
- Then, either the company itself or a contributory of the company may present a
petition to wind up the company√
- The contributory must fulfil any of the conditions prescribed in section 464(2)(a) √
- It is immaterial whether the company is solvent or insolvent√
(4√x1mark= 4 marks)
d. Since the company has difficulty in paying its debts, explain three (3) circumstances
when a company is said to be unable to pay its debts.
- The creditor is owned a sum exceeding the amount prescribed by the Minister. √√
- The creditor has obtained judgement against the company. √√
- The court is satisfied that the company is unable to pay its debts after taking into
account the company’s contingent and prospective liabilities. √√
(6√x1 mark = 6 marks)
(Total: 20 marks)
END OF QUESTION PAPER

FOR INTERNAL USE ONLY 1 AC/DEC 2019/CRG660
PART A
Answer ALL questions.
1. State the main characteristics of a company limited by guarantee.

(4 marks)
The main characteristics of a company limited by guarantee are:
The liability of its members is limited by the Memorandum of Association to the amount
to which the members have undertaken or ‘guaranteed’ to contribute to the assets of the
companion winding up. √
The company must be incorporated as a public company. √
The name for guarantee companies shall have the word ‘Berhad’ or ‘Bhd’ at the end of
its name unless it has obtained the license from the Ministry of Domestic Trade and
Consumer Affairs to dispense with the word ‘Berhad’ or ‘Bhd’. √
The company is usually formed by trade associations, charitable bodies, professional

and learned societies or social or sport clubs for the purpose of providing art, science,
religion, charities, services or any other useful purpose for the community. √
(4√ x 1 = 4 marks)
2. Identify any TWO (2) similarities between a Limited Liability Partnership and a Limited
Company.
(4 marks)
Any debts and obligations of the LLP will be borne by the assets of the LLP and not
that of its partners’. √
An LLP has the legal status of a body corporate which is capable of suing and being
sued in its own name√, holding assets and doing such other acts √ and things in its
name as bodies corporate may lawfully do and suffer. √
(4√ x 1 = 4 marks)
3. Briefly explain the FOUR (4) circumstances that can lead the Companies Commission
of Malaysia (CCM) to initiate the deregistration of a company.
(4 marks)
The circumstances that can lead the CCM to Initiate the deregistration of the
company are: -
The company is not carrying business or is not in operation. √
The company has contravened this Act. √

The company is being used for unlawful purposes or any purpose prejudicial to or
incompatible with peace, welfare, security, public interest, public order, good order or
morality in Malay. √
In any case where the company is being wound up and the Registrar has reasonable
cause to believe that (any 1 √):
No liquidator is acting√
The affairs of the company are fully wound up and for a period of six months the
liquidator has been in default in lodging any return required to be made by him√
The affairs of the company have been fully wound up under a winding up by the
Court and there are no assets or the assets available are not sufficient to pay the
costs of obtaining an order of the Court dissolving the company√
(4√ x 1 mark = 4 marks)
4. Outline FOUR (4) categories of company names prohibited by virtue of the direction of
the Minister.
(4 marks)
Prohibitions by virtue of the direction of the Minister
i. Names suggesting connection with a member of the Royal family or Royal

patronage √
ii. Names suggesting connection with a State or Federal government department,
statutory body, authority or government agency or any municipality or other
local authority√
iii. Names suggesting connection with any Asean, Commonwealth or foreign
government or with the United Nations or with any other international
organization or cartel √
iv. Names suggesting connection with any political party, society, trade union,
cooperative society or building society; √
v. Names that are misleading as to the identity, nature, objects or purposes of a
company or in any other manner; √
vi. Names that are blasphemous or likely to be offensive to members of the public√
vii. Names including the following words or any words of like import:
“Bank”, “Banker”, “Banking”, “Bumiputra”, “Bureau”, “Chamber of Commerce
and Industry”, “Chamber of Manufacturers”, “Chartered”, “College”,
“Consumer”, “Council”, “Credit”, “Exchange”, “Executor”, “Fair Price”,
“Finance”, “Foundation”, “Fund”, “Guarantee”, “Institute”, “Insurance”,
“Investment”, “Leasing”, “Made in Malaysia”, “Prime”, “Registry”, “Treasury”,
“Trust”, “Unit Trust”, “University” √
viii. Names which:
a) are translations of a name of a company or foreign company already
registered under CA2016; √
b) may resemble or be mistaken for the name of any other company or foreign
company registered under CA2016; √
c) may resemble or be mistaken for a name that is being reserved for the
purpose of incorporation of a new company or registration of a foreign
company or for the purpose of a change of name of a company or foreign

company registered under CA2016. √
(Any 4√ x 1 mark = 4 marks)
5. Determine FOUR (4) contents in the Register of Members as mentioned in Section 50

(1) of the Companies Act 2016.
(4 marks)
The contents that shall be included in the Register of Members:
The names, addresses, the number of the identity card, nationality and the usual place
of residence of any person who is a member. √
Where any member is a corporation, the corporate name, place of incorporation,

establishment or origin, registration number and registered office of the corporation shall
be included. √
A statement of the shares held by each member if a company having a share capital. √
The date at which the name of each member was entered in the register√
The date at which any person ceases to be a member during the previous seven years.
√
The date of allotment and the number of shares allotted to each member. √
The amount of stock units held by each member if the company has converted its shares
into stocks. √
The names and particulars of persons ceased to be members may be kept separately.
√
(Any4√ x 1 = 4 marks)
6. Briefly explain the terms an associate director and an alternate/substitute director.

(4 marks))
Associate directors are senior executive directors of the company√
They are not directors within the meaning of the Act because they will expressly deny
their rights to attend or vote at any board meetings√
Alternate directors must give their consent to act and duly execute form-Declaration by
person before appointment as director√
They are entitled to notice of meetings, attend, and vote to exercise all powers of the
principal directors in their places√
(4√ x 1 = 4 marks)
7. A public company may finance their operations through issuance of debentures.

Determine FOUR (4) rights of debenture holders.
(4 marks)
The rights of a debenture holder are as follows:

The right to receive the audited financial statements√
The right to sue for repayment√
The right to take possession of the charged assets√
The right to appoint a receiver and/or manager√
The right to take action under section 346 if it is oppressed. √
(Any 4√ x 1mark = 4 marks)
8. Briefly explain FOUR (4) reasons for a company to purchase its own shares.
(4 marks)
The reasons for a company to purchase its own shares are:

- To support, share price during a depressed period by controlling demand and
supply of the shares. √
- To distribute surplus cash to shareholders in lieu of cash dividends. √
- To improve capital structure – to modify leverage, gearing and debt equity ratio. √
- To provide a means for utilizing surplus cash. √
- Defense against a hostile takeover attempt by reducing public shareholding. √
(Any 4 √ x1 mark = 4 marks)
9. Outline the situations for a resignation of a company secretary.

(4 marks)
According to section 237 of the Companies Act 2016:

- Subject to the constitution or the terms of appointment of a company secretary
may resign by giving notice to the Board. √
- If none of the directors can be communicated √
- On the expiry of thirty days from the date of the notice lodged or in the constitution
or agreement √
- On the expiry of thirty days from the date of the notice to the Registrar √
10. Determine FOUR (4) qualifications of a liquidator as provided by Section 433 of the
Companies Act 2016.
(4 marks)
A liquidator in a winding up shall not be qualified if:

-he is not an approved liquidator√
-he is indebted to the company exceeding twenty-five thousand ringgit√
-he is an officer of the company√
-he is a partner, employer or employee of an officer of the company√
-he is a partner or employee of an employee of an officer of the company√
-he assigns his estate for the benefit of his creditors or made an arrangement with his
creditors√
-if he becomes bankrupt√
-if he convicted an offence involving fraud or dishonesty by imprisonment for three
months or more√
(Total: 40 marks)

PART B
QUESTION 1
Your managing director, Mr. Johari Johan brought his business associate from London,
Madam Clementine Brawn, to your office. Madam Clementine informed you that she had
decided to make Malaysia as her investment hub after seeing positive changes in the
Malaysian business environment. Prior to making any capital commitment, Madam
Clementine wishes to know more about the various instruments of investment available in
Malaysia. You, as a company secretary, are requested to assist Madam Clementine in
answering all her queries.
Required:
a. Explain briefly how debentures may be differentiated in Malaysia.

(6 marks)
SUGGESTED ANSWER:
Debentures may be differentiated in Malaysia as follows:
i. Form - the form of the debentures. E.g. Debenture Stock, loan stock,
bond√
ii. Redeemability - whether redeemable within a specified period or only the
occurrence of various specified contingencies√
iii. Security - whether secured on the property or undertaking of the company
or not and if secured whether by way of a fixed or a floating charge√
iv. Interest - the interest (Coupon rate) charges for the debenture√
(4√ x1.5 mark = 6 marks)
b. Outline the procedures to issue debentures in Malaysia.

(6 marks)
SUGGESTED ANSWER:
The procedures are:
1. To ensure compliance with various guidelines on the regulatory framework

√ for issuance of debentures such as Securities Commission Act (SCA),
Companies Act (CA) and Financial Services Act √.
2. Preparation of a prospectus
A prospectus must be prepared√in accordance with debentures
prospectus guidelinesas S.159 of CA2016 defined as any prospectus,
advertisement, notice, invitation or circular (‘PANIC’) inviting applicants or
offers to the public to subscribe for or purchase any shares or debenture of
a company√.
3. Underwriting
Underwriting is not mandatory where it is up to the company and the
adviser to undertake√.
i. If no underwriter, the company must state the minimum level of

subscription necessary to achieve the funding objective of the
company (0.5 √).
ii. Where in the event of under-subscribe, cannot meet the minimum
level requirement, all proceeds must be returned to subscribers
(0.5 √).
4. Rating
All issues of debentures must be rated by a recognized rating agency √
unless otherwise exempted by SC. However, no mandatory rating is
required for any issue, offer or invitation in respect of irredeemable
convertible loan stocks√.
5. Registration of charges
According to S.352 (1) of CA2016, when a charge is created to secure the
debentures√, the details of the charges must be lodged with CCM within 30
days of creation√. Failure in doing so could lead contravened S.354 where
the officer and the company could be penalized for an amount of not
exceeding RM50,000 and additional of RM500 per day for further
offences√. (ANY 2 √)
(Any 6√ x 1mark =6 marks)
c. Discuss the qualification of the trustee for debenture holders according to section
176 of Companies Act 2016.
(8 marks)
SUGGESTED ANSWER:
The qualification of trustee for debenture holders according to S.176 of Companies

Act 2016 are:
◼ S 176 (1) - Every company which offers debenture for public subscription shall
only appoint a trustee corporation as a trustee√√
◼ S 176 (2) - The consent to act as trustee must be obtained before the trustee
corporation can act as a trustee of debenture holders√√
◼ S 176 (3) - A trustee corporation shall not be appointed as a trustee if that
trustee corporation is:-
a) A shareholder of the borrowing co√;
b) Beneficiary entitled to moneys owed by the borrowing company
(Borrowing company borrowed monies, then pass the monies to trustee)
√;
c) A corporation that has entered into a guarantee in respect of principal
debt secured by those debentures or in respect of the interest thereon√;
and
d) Deemed to be related to the corporation as mentioned in Para (1) to (3)
above and also related to the borrowing corporation√.
(8√ x1mark = 8 marks)

(Total: 20 marks)

QUESTION 2
QAMA Sdn Bhd is in the process of being converted to a public company called QAMA Bhd.
Previously, as a private company, Miss Rina was the only sole director. Section 196(1)(b) of
the Companies Act 2016 provides that a public company shall have a minimum of two
directors. Miss Rina, therefore. approaches Miss Ayu to be the other director of QAMA Bhd.
However, Miss Rina notes that Miss Ayu was previously the director of two wound up
companies.
Required:
a. Describe the qualifications of a director with respect to the Companies Act 2016.
(6 marks)
SUGGESTED ANSWER:
-a private company shall have a minimum of one director√

-a public shall have a minimum of two directors√
-Must attained the age of majority of 18 years old√
-a director shall be a natural person√
-a director shall ordinary reside in Malaysia√
-a director shall not include an alternate or substitute director√
(6√x1mark=6marks)
b. Explain who may not be a director in accordance with the Companies Act 2016.
(8 marks)
SUGGESTED ANSWER:
-A person who has been adjudicated a bankrupt (has not been discharged from his
bankruptcy) √ (section 198 (1)). It is immaterial whether he was made a bankrupt
within or outside Malaysia√ section 198(2)).
-A person who has been convicted of an offence relating to promotion, formation or

management of a company√ under section 198 (1)(b).
-A person who has been convicted of an offence involving bribery, fraud and
dishonesty √ under section 198 (1) (c).
Under section 198 (1) (d):
-A person who has been convicted of an offence involving duties and responsibility of
a director under section 213√.
- A person who has been convicted of an offence involving responsibility of a

nominee director under section 217√.
- A person who has been convicted of an offence involving improper use of

property, position, etc under section 218√.

-A person who has been convicted of an offence involving transactions with directors,
substantial shareholders or connected persons under section 228√.
- A person who has been convicted of an offence involving liability where proper
accounts are not kept under section 539√.
-A person may also be restrained from being a director by the court√ under section
199 (under section 198 (1)(e)).
- An auditor of a company cannot be an officer of the company√ (section 264). This

includes a director as an officer of the company.
-If the director becomes of unsound mind√ under section 208(1)(e).
-A person who does not hold the minimum of number of shares required for holding
the position of a director√.
(Any 8√x1mark=8marks)
c. Determine the position of Miss Ayu as the next director of the QAMA Bhd.
(6 marks)
SUGGESTED ANSWER:
Since Miss Ayu was the director of two wound up companies, Miss Rina must note
that first, the two companies were wound up due to insolvency within a period of 5
years√. Secondly, Miss Rina must note that there should be a restraining order from
the court for Miss Ayu’s position√. Finally, Miss Rina must note that there should be a
court order to make Miss Ayu fit to hold a position as a director after the period of 5
years√.
(3√x2marks=6marks)
(Total: 20 marks)
QUESTION 3
Shareholders of Merdeka Ria Bhd (MRB) and their respective shareholding are as follows:-
Dato’ Basir 25%

Dato’ Tan Kaw Kaw 12%
KMN Bhd 30%
Datin Lee Choo Leng 33%
The Board of Directors of MRB comprises of Dato’ Tan Kaw Kaw, Datin Lee Choo Leng,
Dato’ Basir and Dato’ Shahrir who is the corporate representative of KMN Bhd.
a. The board of MRB insists to know who has the power to convene an Extraordinary
General Meeting (EGM) for the company. Advise the board.
(4 marks)
SUGGESTED ANSWER:
Power to convene an EGM:

-Board of Directors√
-Requisitioned by shareholders holding at least 10%√
-For a company’s without share capital at least 5% of its member√ or total
voting rights√
(4√x1mark=4marks)
b. Dato’ Shahrir seeks your advice as to how KMN Bhd can exercise its rights to request an
EGM for the purposes of removing Dato’ Tan Kaw Kaw as a director of MRB.
(6 marks)
SUGGESTED ANSWER:
Dato’ Shahrir on behalf of KMN has a right to requisition for an EGM to remove Dato’
Tan Kaw Kaw under section 206 CA 2016√ as KMN holds more than 10% of the
voting rights in MRB. √√ Dato’ Shahrir shall have to lodge at the registered office the
special notice√ to remove Dato’ Tan Kaw Kaw . The EGM shall be held not less than
28 days from the date of his lodgement.√ He must lodge as a corporate
representative of KMN. √
(6√x1mark=6marks)
c. State the methods of giving notice to the members, if KMN Bhd could convene the EGM
to remove Dato’ Tan Kaw Kaw.
(5 marks)
SUGGESTED ANSWER:
Method of notices can be

i. Verbal by telephone, √
ii. Press advertisement, √
iii. Bill posting√
iv. broadcasting√
v. Electronic form√
vi. Website√
(Any 5√x1mark=5marks)
d. At the EGM held to remove Dato’ Tan Kaw Kaw, Dato’ Tan Kaw Kaw demands that the
motion of removing him is by a poll basis. Advise (with reasons) the Chairman in the
meeting, whether he/she should allow the demand from Dato’ Tan Kaw Kaw.
(5 marks)

SUGGESTED ANSWER:
Any member or members present in person or by proxy and representing not less
than one tenth of the total voting rights of all the members having the right to vote at
the meeting have a right to demand a poll. √√
Dato’ Tan Kaw Kaw has a right to demand a poll, although the motion is to remove
him. √
This is his rights as a shareholder. √ Otherwise, the Chairman can demand a poll. √
(5√x1mark=5marks)
(Total: 20 marks)
END OF SOLUTION

CONFIDENTIAL 1 AC/JUN 2019/CRG660
SUGGESTED ANSWERS
PART A
1. State FOUR (4) characteristics of a private company, in accordance with the

Companies Act 2016.
(4 marks)
The characteristics according to Companies Act 2016 are:

• It must have a share capital, i.e. a company limited by shares√
• Restrict the rights to transfer its shares√
• Limit the number of members to not more than 50√
• Prohibits any invitation to the public to subscribe for any shares in or debentures of
the company√
• Prohibits any invitation to the public to deposit money with the company for fixed
periods or payable at call, whether interest-bearing or interest-free. √
(Any 4√ x1 mark = 4 marks)
2. Define the meaning of limited liability and unlimited capacity in relation to a company
limited by shares.
(4 marks)
Limited liability – the shareholders of the company are legally responsible for the
debts of a company only to the extent of the nominal value of their shares. √√
Unlimited capacity - The company can carry on any lawful business or activity
together with full rights, powers and privileges unless the constitution provides
otherwise. √√
3. Outline FOUR (4) particulars to be provided in the MyCoID 2016 portal as required by
section 14 (3) of the Companies Act 2016, with regard to the application for registration
of a company.
(4 marks)
The information needed in the MyCoID 2016 portal:
The name of the proposed company√

The status of the company, whether it is private or public√
The nature of business of the proposed company√
The proposed address of the registered office of the proposed company√
The details of the members, directors and secretary of the proposed company√
The details of the class and number of shares to be taken by members (for a company
limited by shares) √
The amount the member undertakes to contribute, in the event the company is wound
up (for a company limited by guarantee) √
(Any4√ x 1 mark = 4 marks)
4. State the circumstances where a person may be disqualified to act as a company

secretary.
(4 marks)
A person shall be disqualified to act as a company secretary if:

i. He is an undischarged bankrupt√
ii. He is convicted, whether within or without Malaysia of any offense mention. √
iii. He has ceased to be a member of the body prescribed by the Minister. √
iv. He ceases to be a holder of a valid license. √
v. He ceases to be a holder of a valid practicing certificate √
5. List FOUR (4) of the statutory books required to be maintained by a company in

pursuant to the requirements of the Companies Act 2016.
(4 marks)
a) The Register of Members√

b) The Register of Directors, Managers and Secretaries√
c) The Register of Debenture Holders√
d) The Register of Substantial Holders – for public companies only√
e) The Register of Directors’ Shareholdings, Debentures and Interests√
f) The Register of Charges√
g) Index of Members for companies with more than 50 members
h) Register of Options to take up Unissued Shares
i) Books of Accounts
j) Records of Resolutions
k) Records of Meetings
6. Briefly explain FOUR (4) features of a non-executive director

(4 marks))
The features of non-executive director are:

• Do not receive salaries and benefits because they do not hold any management
posts√
• Receive director fees which is determined by the member/shareholder at general
meeting √
• Their sole function is to determine/agreed the overall policy of the company,
contribute to discussion and decision making. √
• Carries independent function in BOD√
• MB listing requirements: one-third (or nearest to 1/3) of directors sit on BOD are
independent directors. √
(Any 4√ x1 mark = 4 marks)

7. Give FOUR (4) rights conferred to the holders of ordinary shares in a company as
stated in the Companies Act 2016.
(4 marks)
The FOUR (4) rights conferred are:

• Attending and voting at the company’s annual general meetings (AGMs), general
meetings and meetings of members (MOMs). √
• Election and removal of auditors√
• Receiving and adopting annual audited financial statements and reports. √
• Rights to information about the company√
• Rights to receive notices of meetings√
• Appointment and removal of auditors√
8. Describe the FOUR (4) ordinary businesses transacted during an Annual General
Meeting (AGM).
(4 marks)
The FOUR (4) ordinary business transacted during an AGM are:

• To table the audited Accounts, balance sheet and auditors report√
• The appointment and the fixing of the fee of directors √
• The election of directors in place of those retiring √
• Any other resolutions / Appointment and fixing of the remunerations of Auditors√
(4√ x1 mark = 4 marks)
9. Briefly explain about a company's Constitution in place of Memorandum and Articles of

Association.
(4 marks)
In place of M&A a company may choose to have a single document to be referred to

as a company’s constitution. √ It is a single document that contains the basic
information about the company√ and other matters regarding the company’s internal
management. √ It is also optional for companies limited by shares to have a
constitution. √
(4√ x 1mark = 4 marks)
10. State FOUR (4) circumstances in which a company may be wound up by the Court.
(4 marks)
The Court may order the winding up if:

i. the company by special resolution resolved that the company be wound up by
the Court √
ii. the company does not commence business within a year from its
incorporation or suspends its business for a whole year √
iii. the company has no members √
iv. the company is unable to pay its debts √

v. the directors have acted in the affairs of the company in the directors’ own
interests rather than in the interests of the members as a whole or acted in
any other manner which appears to be unfair or unjust to members√
vi. when the period, if any, fixed for the duration of the company by the
constitution expires or the event, if any, occurs on the occurrence of which the
constitution provide that the company is to be dissolved√
vii. the company is being used for unlawful purposes or any purpose prejudicial
to or incompatible with peace, welfare, security, public interest, public order,
good order or morality in Malaysia√
viii. the Court is of the opinion that it is just and equitable that the company be
wound up√
ix. the company has held a licence under the Financial Services Act 2013 or the
Islamic Financial Services Act 2013, and that the licence has been revoked or
surrendered√
x. the company has carried on a licensed business without being duly licensed
or the company has accepted, received or taken deposits in Malaysia, in
contravention of the Financial Services Act 2013 or the Islamic Financial
Services Act 2013, as the case may be√
xi. the company defaults in lodging the statutory declaration under subsection
190(3) √
xii. the Minister has made a declaration under section 590. √
(Total: 40 marks)

PART B
QUESTION 1
Nina started a small business of supplying stationeries for schools around Kangar about five
years ago. She then decided to convert her small business to a company named QQ
Stationery Sdn Bhd. Being the only director of the company, Nina invited his friend Ayu to
join her company and appointed Ayu as an executive director of QQ Stationery Sdn Bhd.
Both of them then decided to hire Mia, a young graduate to act as the company secretary for
QQ Stationery Sdn Bhd in order to aid them with administrative matters.
After several months of operating, QQ Stationery Sdn Bhd successfully secured a contract
with the Ministry of Education to supply stationeries to all government schools in Perlis. Their
business started flourishing as the sales volume accelerated tremendously. Nina and Ayu
started to realize that they need extra hands to help them in managing the company
effectively. They discussed this issue with Mia and she advised them to appoint another
person to act as a managing director. The managing director will be responsible in handling
the management of the company. As a result, Nina and Ayu would have more time to think
about the best strategic actions to conquer the market.
Required:
a. Discuss the procedure in appointing Mia as the company secretary of QQ Stationery

Sdn Bhd with reference to the Companies Act 2016.
(6 marks)
SUGGESTED ANSWER:
According to s236(3) of the Companies Act 2016, a company should appoint a person as its
company secretary only if he is qualified√
The qualified company secretary should fulfill the criteria as a company secretary under
s235 and s241 of the Companies Act 2016, for example:
A natural person
18 years of age and above
A citizen or permanent resident of Malaysia
A member of prescribed professional bodies in the Fourth Schedule of the
Companies Act 2016
A person who registers and obtains a practicing certificate from the Registrar of
Companies (s241)
(Any 2√)
For the first company secretary, the name of the company secretary should be given in the
application for incorporation of the company (s18(5))√
However, s236 (2) requires the Board of Directors to appoint the first company secretary
within 30 days from the incorporation of the company√

For the subsequent company secretary, the appointment is made by the Board of Directors.
The board should determine the terms and conditions of the appointment√
b. Explain the administrative matters that Mia should handle as prescribed in the
Companies Act 2016.
(6 marks)
SUGGESTED ANSWER:
The administrative matters as prescribed in the Companies Act 2016:
Maintenance of registered office

As a full time employee, the company secretary should be present at the company’s
registered office at the company’s place of business√
As a secretarial firm or company, the company secretary may use the secretarial
firm’s place of business as its registered office√
According to s46(2) of the Companies Act 2016, the company secretary or his agent
should be present at the registered office during ordinary business hours√
Under s48 of the Act, the company secretary should provide assistance especially for
inspection purposes by the ROC on documents and records kept at the registered
office√
(Any 3√)
Maintenance of register of members

Based on s102(1) of the Companies Act 2016, among the company secretary’s
duties is to ensure the register of members is properly kept and maintain regularly√
Lodgement of documents
Generally, the company secretary is the person to lodge company’s documents such
as the particulars of directors, manger and secretaries and thereto (s58 of the Act)
and the company annual returns (s68 of the Act) √
Meetings
At the instruction of the Board of Directors, the company secretary should issue the
notice of the company’s meetings as well as attend the meeting as recorder of the
minutes (by implication under s221(8)) √
(6√x 1 mark = 6 marks)
c. Assuming Nina and Ayu agreed with the suggestion to appoint a managing director,
prepare a notice of a board of directors meeting to include such agenda.
(8 marks)

SUGGESTED ANSWER:
QQ Stationery Sdn Bhd√

(Incorporated in Malaysia)√
(Company no: 12345X)√
NOTICE OF BOARD OF DIRECTORS’ MEETING√
NOTICE IS HEREBY GIVEN THAT the Board of Directors’ Meeting of the company√ will be
held on Tuesday√, 2 January 2019√ at 10.00 am√ at Conference Room 1, Putra Palace
Hotel, Kangar, Perlis√ for the purpose of transacting the following business:
1. To appoint a Managing Director√√
2. To transact any other business√√
By order of the Board√

Mia√
Company Secretary
Date: 26 December 2018√
(note: the day, date, venue and place of the meeting based on students’ own creation)
(16√x ½ mark = 8 marks)

(Total 20 marks)
QUESTION 2
KreamCheezy Bhd (the company) is a public company listed on the ACE market of Bursa
Malaysia. Its company secretary is Ms Lim Bee Ling, a partner of Ling and Azmah
Consultancy. The company is planning on creating a fund (scheme) for the purpose of
providing financial assistance, through giving out loans, to its employees and eligible
directors. Ling and Azmah Consultancy has been asked to hold a half-day briefing to the
directors of the company regarding the legal and secretarial issues related to the creation of
the fund (scheme).
You have just recently been employed by Ling and Azmah Consultancy and have been
asked by Ms Lim to handle the half-day briefing on behalf Ling and Azmah Consultancy.
Required
Answer all the following issues and support your answers with reasons:
a. During the Question and Answer session, some directors asked the following
questions:
i. Tuan Razali Tuan Razi, the managing director asked if he would be eligible to
borrow from the company to finance the renovation of his house when the
scheme has been duly approved and implemented.
(3 marks)

SUGGESTED ANSWER:
Yes√, an executive director is a full-time employee of the company. √ He is allowed

to borrow from a scheme approved by members in general meeting. √This is in
accordance with section 224 (2)(d) of the Companies Act 2016.
ii. Encik Supardi Osman, an executive director has been borrowing from the
company in the past to cover his expenses made for the company’s business
purposes. He explained that all this while he has to make a list of the
expenditure to be approved via a resolution in the Annual General Meeting.
He inquired whether he still will need to do the same in the future if he
borrows from the fund.
(3 marks)
SUGGESTED ANSWER:
No√, borrowing under an approved scheme requires no prior members’ approval√ for
an executive director’s expenses to meet the expenditure incurred or to be incurred
for the purpose of the company.√ This can be referred to section 224(2)(b) of the
Companies Act 2016.
iii. Encik Chua Lee Da, a non-executive director asked if he would be eligible to
borrow from the scheme to finance the purchase of shares in a subsidiary of
KreamCheezy Bhd for his own investment purposes.
(3 marks)
SUGGESTED ANSWER:
No√, a non-executive director is not a full-time employee of the company. √

They are not allowed to borrow under the scheme. √
b. During the tea break, Dato’ Sagoff, a member of the Board of directors of
KreamCheezy Bhd, asked if he would be eligible for reappointment in the next
Annual General Meeting which will be held next month. He was 70 years of age at
that time and was told by his friend that he will no longer be eligible to be a director of
a public listed company.
He is also curious about the position of his alternate director, Stephen Young, if he is
no longer eligible to be a director of the company at the next annual general meeting.
(6 marks)
SUGGESTED ANSWER:
Is Dato’ Sagoff eligible for reappointment?:

Yes. He can be reappointed √. Age limit for public companies no longer applies in
CA2016. √ √ √

Position of alternate director, Stephen Young:

His appointment ends with with the retirement of Dato’ Sagoff. √ √
c. Explain who is a family member for the purpose of “a person connected to a director”
under section 197 of Companies Act 2016.
(5 marks)
SUGGESTED ANSWER:
Under section 197 of the Companies Act 2016, “a person connected to a director”:
• His spouse√
• His child (natural/adopted/step) √
• His parent√
• His brother or sister√
• The spouse of his child, brother or sister√
(5√ x 1 mark = 5marks)
(Total 20 marks)
QUESTION 3
OMMA Sdn. Bhd. (OSB) is a private company. The chairman of the company is seeking your
view on the following matters:
a) One of the shareholders, Puan Ziha would like to give her shares worth RM25, 000 to
her son Encik Ahmad. However, she is confused between the transfer and
transmission of shares. Explain with examples, the differences between transfer and
transmission of shares.
(6 marks)
SUGGESTED ANSWER:
Transfer
• Ownership of the share changes by voluntary act √
• The action involves only, the transferor, transferee and the company √
• Example: Owner sells his share to the new owner, giving away as a gift √
Transmission
• Ownership of the share changes by operation of law √
• The transmission might also involve other parties such as administrator, receiver,
and even a court order may also be required. √
• Example: transmission of shares due to death, bankruptcy or lunacy √
(6 √ x 1 mark each = 6 marks)
b) A prospective investor, Encik Nadzri has written to the company to inform his interest
in purchasing 20,000 shares of the company. In exchange for the shares, Encik
Nadzri will provide the company two vans valued at RM60, 000. Describe the
procedure for Encik Nadzri’s application of new shares.
(8 marks)
SUGGESTED ANSWER:
• The company will request Encik Nadzri to complete an application form for
submitting together with application monies. √
• A board meeting shall be convened the directors to approve the application.√
• Where no such power of the allotment of shares given to the directors, Meeting of
Members (MOM) shall be convened√ either to give the power of allotment to the
board√ or to allot the shares and authorizing the board to issues shares, share
certificate and common seal.√
• The meeting shall authorized director to issue share certificate (if requested by
Encik Nadzri).√
• The company will ask its company secretary to update the Register of Members.
√
• The company secretary will lodge with ROC the return of allotment of shares
within 14 days from the allotment. √
c) Based on the latest OSB board of directors’ meeting, all directors have agreed
unanimously to distribute a 10% final dividend to the shareholders. Advise the board
on the distribution of the dividends in accordance with the requirements of the
Companies Act 2016.
(6 marks)
SUGGESTED ANSWER:
• Distribution out of profit

o A company may only make a distribution to the shareholders out of profit of
the company available if the company is solvent. √√
• Distribution only if company is solvent

o Before a company makes a distribution, the directors of the company shall
authorize the distribution. √
o The directors may authorize a distribution at the time and amount as the
directors feel appropriate. √
o The company remains as solvent within 12 months after the distribution
made. √
o However, if the distribution is authorized and the directors think the company
may not be solvent, then the directors shall take necessary actions to prevent
the distribution. √
(Total: 20 marks)

CONFIDENTIAL 2 AC/DEC 2018/CRG660
PART A
1. State the TWO (2) conditions for the passing of a special resolution.
(4 marks)
1 passed by at least 75% of the votes of members present and voting at that
meeting (constitution may provide for higher percentage)
2 notice for the meeting must be given at least 21 days before the meeting
3 notice must include the text of the resolution and states the resolution is
proposed as a special resolution.
4 the resolution must expressly state that it is a special resolution and passed as
a special resolution
2. Briefly explain the differences between a bonus issue and a rights issue.
(4 marks)
Rights issue Bonus issue
The issue of new shares to existing Also referred to as scrip issue or a
shareholders for cash. capitalization issue
One of the cheapest ways to raise It represents only an adjustment to the
additional capital for company’s accounts of a company
expansion
Issue at below prevailing market price of No additional capital raised
the company’s quoted shares.
3. Section 238 of the Companies Act 2016 states that a person shall be disqualified to
act as a secretary for THREE (3) reasons. Provide the reasons.
(4 marks)
 he is an undischarged bankrupt;
 he is convicted within or without Malaysia of any offence mentioned in Sections
213, 217, 218, 228 and 539 of CA 2106
 he ceases to hold a practicing certificate issued by ROC, CCM
4. State any TWO (2) rights of preference shareholders that must be set out in a
company’s Constitution.
(4 marks)
- Repayment of capital
- Participation in surplus assets and profits
- Cumulative dividends
- Voting rights
- Priority of payment of capital and dividends.
5. Provide a brief explanation of a prospectus.

(4 marks)
Any prospectus, notice, circular, advertisement or invitation
 inviting applications / offers from the public to subscribe for or purchase any shares
in or debentures of a corporation (or proposed corporation - or any units of shares
or debentures thereof), or
 offering to the public for subscription or purchase any shares in or debentures of a

corporation (or proposed corporation - or or any units of shares or debetures
thereof).
6. The Listing Requirements of Bursa Malaysia Berhad requires every public listed
company to establish an Audit Committee. List any TWO (2) requirements for the
composition of this Committee.
(4 marks)
i. Comprise of at least 3 non-executive directors,
ii. A majority of the non-executive directors must be independent.
iii. At least one Committee member is either
- A member of the Malaysian Institute of Accountants, or
- If he is not a MIA member then
 he must have at least 3 years’ experience and
 have passed the final examination in accounting of one of the
institutions specified in Part I of the 1st Schedule, Accountants Act
1967
or
 be a member of one of the specified accountant bodies under Part II
of the 1st Schedule, Accountants Act, 1967.
7. Provide a brief explanation of the Central Depository System (CDS).

(4 marks)
 The CDS is a system by which “dealings" (transactions of in shares) of public
listed companies deposited with the Central Depository is affected by means of
book entries.
 Under CDS there is no physical delivery of scrips and share certificates.
 The system has minimized fraudulent share transfers or issuance of “phantom‟
share certificates and scrips.
8. State TWO (2) criteria that the Companies Commission of Malaysia shall consider
before issuing a license to an applicant to act as a Company Secretary.
(4 marks)
i. The character, qualification and experience of the applicant
ii. Public interest
9. The Constitution of a company may regulate the manner in which a poll may be taken
but it cannot exclude the right to demand a poll. State the persons who have the right
to demand a poll.
(4 marks)
 least five members present who have voting power.
 member(s) having at least 10% of voting power present at the meeting or his
proxy
 member(s) having at least 10% of paid up shares present at the meeting or his
proxy
10. There are a number of considerations that the Companies Commission of Malaysia
must take into account prior to striking off a company. Briefly describe any TWO (2) of
the said considerations.
(4 marks)
(Total: 40 marks)
a) The company is not carrying on any business or not in operation
b) The company has contravened CA 2016
c) The company is being used for unlawful purposes or any purpose prejudicial of
or incompatible with peace, welfare, security, public interest, public order, good
order or morality in Malaysia.
d) In the case of a company being wound up and the Registrar has reasonable
cause to believe that:
 no liquidator is acting [Section 549(d)(i)];
 the affairs of the company are fully wound up and the liquidator has failed to
lodge any return for a period of six months [Section 549(d)(ii); or
 the affairs of the company have been fully wound up under a winding up by
the Court but there are no assets or assets available are not sufficient to
obtain a dissolution order from the Court [Section 549(d)(i
PART B
QUESTION 1
Nilsson and Olsson are Swedish businessmen. Together with their Malaysian business
partner, Rahman, they intend to incorporate a company in Malaysia known as Triple NOR
Berhad. Nilsson and Olsson are residents of Stockholm, Sweden and have been declared
bankrupt in Sweden.
Required:
a. i. Discuss whether Nilsson and Olsson can be appointed as the directors of Triple
NOR Berhad under the Companies Act 2016. Cite the relevant provisions of
the Act.
(5 marks)
The rule (Section 196 CA2016)
A director must be a natural person
At least 18 years of age
The minimum number of directors must have his principal or only place of
residence in Malaysia
Application to case
Triple NOR Berhad is a public company thus the minimum number of
directors is two (2) (Private company – one)
If only Nilsson and Olsson are appointed directors, then the minimum
directorship is not met. At least 2 other directors (including Rahman) must be
appointed for the minimum directorship to be met.
ii. How would Nilsson and Olsson bankruptcy status in Sweden affect their
appointment in the intended Malaysian company? Cite the relevant provisions
of the Companies Act 2016.
(3 marks)
The rule (Section 198 CA2016)
An undischarged bankrupt is disqualified from becoming a director of a

company or even takes part in the management of the company except with
the Leave of Court.
It is immaterial whether he was made a bankrupt within or outside Malaysia.
Application to case
Nilsson and Olsson are disqualified from becoming directors as they are
undischarged bankrupts.
b. Nilsson and Olsson seek your advice on the procedures to remove Rahman as a
director and the consequences of Rahman being removed from the company. Advise
Nilsson and Olsson and cite the relevant provisions of the Companies Act 2016.
(Note: Assume that Nilsson, Olsson and Rahman are directors of Triple NOR Berhad)
(12 marks)
The rule (Sec. 206 of CA 2016 – applicable to public companies)
Before meeting
 The member who wishes to remove the director must give special notice to the
company at least 28 days before the intended removal of the director.
 The company must provide the director with a copy of the special notice as he has
the right to defend himself. The director can either provide a written response
against his removal or can attend and speak at the meeting that is held to remove
him.
 14 days’ notice of meeting to remove the company director by an ordinary

resolution needs to be sent to members of the company.
At the meeting
 The removal of the director only takes effect when the ordinary resolution is passed
by members at the general meeting.
 Where the director that is to be removed represents the interest of a specific class
of shareholders that director cannot be removed unless his successor has been
appointed
Consequences after removal

 Where a director’s removal results in the company having breached its contractual
obligations to the director, the director is not prevented from suing the company for
compensation.
(Total: 20 marks)
QUESTION 2
Star Bright Bhd, a non-listed public company has just appointed Farhan Ali (newly graduated
with the Institute of Chartered Secretaries and Administrators (ICSA)) as the new assistant
company secretary. You are the chief company secretary of the company and will be on leave
for about two months. Farhan Ali has been asked to organize the annual general meeting
(AGM) which will take place in the following month when you are on leave. As Farhan Ali is
new and has never organized an AGM before, you are required to provide a general guide to
Farhan Ali so that the AGM will be successfully carried out. The guide will cover matters to
consider before, during and after the AGM.
Required:
Prepare a guide for Mansor Ahmad’s reference covering the following matters:
a. Before the AGM:
i. Notice of AGM
ii. Venue and time of meeting
(6 marks)
(i) Notice of meetings
- Fourteen (14) clear days-notice must be given for the AGM and 21 clear days if
there is a special resolution to be passed
- The notice has to be given to every member and auditor of the company.
- State the following information
 Company name,
 type of meeting,
 date and time of meeting,
 venue of meeting,
 the appointment of proxy and time and place for deposit of proxy form.
 the agenda which also includes
o The notice of meeting should state which directors are standing for
election or
o Re-election and relevant particulars of the directors should be given (e.g.
age,
- Include any relevant explanatory circular providing explanation for any special
business has to be sent together with the notice.
.
(ii) Venue and time of meeting
Take into account
 the accessibility of the venue
 convenience to the shareholders generally.
 facilities to help shareholders with physical disabilities.
 Inform all directors to attend the AGM as they (being stewards) have to fulfill
their obligations to the shareholders.
b. During the AGM:
i. Chairing and seating arrangements

ii. Checking for Quorum
iii. Laying of reports and accounts
iv. Assisting the Chairman of meeting in the counting of votes
v. Proxy and polls
(10 marks)
(i) Chairing and seating arrangements
o Directors should be seated with the chairman facing the shareholders to

facilitate answering shareholders’ questions.
o A chairman should be appointed and is usually the chairman of the board.
(ii) Checking for Quorum

 Ensure the minimum number of attending members needed to form a

quorum as laid out in the Constitution/Articles of Association (if any) of the
company.
 If the constitution does not state:
o Where the company has only one member, the quorum shall be only
one member personally present.
o If the quorum of the company is a minimum of two then two members
personally or by proxy is considered the quorum for the meeting.
 Quorum must be present for the whole meeting and any resolution passed
after the quorum ceased to exist may be invalidated.
(iii) Laying of reports and accounts

 Audited financial reports and accounts must be provided to all attending
members.
 The auditor of the company is to present the audit report of the company
 The directors are to entertain any queries from the members on the financial
position of the company.
 The audited accounts, directors’ report and an auditors’ report must be laid
before the AGM - it is not required that the members must approve the
accounts.
 Tabling the accounts at the meeting means that it is subject to debate by
the shareholders.
(iv) Assisting the Chairman of meeting in the counting of votes
 No member must be prevented from exercising his right to vote.

 Subject to the constitution,
o every member or corporate representative present will have one vote
each on show of hands irrespective of their shareholdings.
o a resolution put to vote shall be decided by show of hands first, unless
a poll is demanded.
o The votes on show of hands shall be nullified once a poll is demanded.
(v) Proxy and polls
 A member is entitled to appoint another person(s) as his proxy to attend

and vote.
 A proxy may speak at the meeting
 A proxy shall be entitled to vote on a show of hands if he is the only proxy
appointed by the member. The sole proxy should also be entitled to vote
on poll.
 If the member has appointed more than one proxy, then his proxies are not
entitled to vote by show of hands but only on a poll
 There is no maximum number of proxies which may be appointed by
members. The appointment is invalid unless the proportions of his holdings
to be represented by each proxy are specified.
 Proxy form shall be deposited at the registered office not less than 48 hours
before the time of the meeting.
c. After the AGM:
i. Preparing the minutes of the meeting

ii. Preparing documents for lodgment with Companies Commission of Malaysia

(CCM)
(4 marks)
(i) Preparing the minutes of the meeting
 Minutes must be entered in the Minutes Book within 14 days of the meeting.
 Minutes to be signed by the Chairman of the meeting or the Chairman of
the next succeeding meeting.
(ii) Preparing the documents for lodgement with CCM
Documents such as annual returns, Notices of resolutions must be prepared

and lodged within a prescribed time as instructed by CCM.
(Total: 20 marks)
QUESTION 3
Speedy Delivery Sdn Bhd is a company involved in courier business. It has a piece of land
with a warehouse on it, a few office buildings, twenty vans and ten motorcycles. It wishes to
increase its business by buying more vehicles and machinery. BNE Bank Berhad agreed to
give RM4 million loan to Speedy Delivery Sdn Bhd where a fixed charge was created over the
piece of land, warehouse and office and a floating charge over all of its other properties in the
company. The bank’s lawyers have prepared the charges and the bank has paid out the loan
to the company.
A few months later, Speedy Delivery Sdn Bhd asked the bank for another RM500,000 to be
secured over the same fixed charge created earlier. It was found out then that the bank’s
solicitors have failed to register the fixed charge with the Companies Commission of Malaysia.
This failure hampers the additional bank loan sought by the company.
Required:
a. Explain to the board of directors why floating charges are more common and are
created over different assets in the company as compared to fixed charges by
discussing in depth the characteristics of both types of charges.
(12 marks)
Fixed charge Floating charge
a mortgage of one (or more) specific, an equitable mortgage on some or all of the
ascertained and definite property of the company’s present and future property. The
company mortgage is constantly fluctuating over
assets of the company until an event occurs
which causes it to crystallize where upon it
becomes a fixed charge.
Situations that cause the crystallization are:

- on liquidation of the company
- or upon default in payment of interest or
principal sum
- or cessation of business of the company
- or when creditor take steps to enforce or
take possession of the charged assets
The charge sticks to the particular asset until Attaches to the class of assets and does not
the charge is satisfied. If the asset is fasten on definite property but is constantly
transferred, the charge follows it changing. As a result, the charge does not
stick to a particular asset and the charge
does not follow the assets transferred
The company is prevented from dealing company is allowed to deal with the property
freely with that property without the prior so charged without any prior consent of the
consent of the holder of the charge holder of the charge
Reasons for floating charge’s popularity – yellows
b. Explain the person/s responsible to register a charge and the consequences of the
non-registration of the fixed charge against the company as provided in the Companies
Act 2016.
(8 marks)
Section 352 of the CA 2016
 The duty to register charges is on the company
 Any persons interested in the charges can also register – he/she is entitled for
reimbursement for the costs. There is a practical obligation on the part of the lending
company to register the charge
Implications of failure to register charge

 Failure to register the charge within 30 days of its creation would render the security under
the charge void against the liquidator and any creditor of the company- section 352 CA
2016
 However, it will not prejudice any contract for repayment of money secured by the charge
where the money become payable immediately.
 The company and every officer of the company who is in default who must pay penalty.
(Total: 20 marks)

CRG530 – JUNE 2018
CRG 530 JUNE 2018
SUGGESTED ANSWER
PART A
1. Briefly explain the features of a Limited Liability Partnership.

(4 marks)
SUGGESTED ANSWER:
1. The LLP is a body corporate and has the legal personality separate from the
partners (separate legal entity).
2. LLP is a perpetual succession.
3. Any partnership in the partnership will not affect the existence, right or liberty of
the LLP.
4. LLP has unlimited capability and is capable of suing and be sued for it, acquire,
owning, holding and develop or dispose of property.
5. LLP may do and suffer such other acts and things as bodies corporate may
lawfully do and suffer.
2. State the circumstances when companies are deemed to be related.

(4 marks)
SUGGESTED ANSWER:
Section 7 of CA 2016 provides that a corporation is deemed to be related to each other

if:
- It is a holding company of another corporation

- It is a subsidiary of another corporation; or
- It is a subsidiary of the holding company of another corporation.
3. State TWO (2) conclusive evidence that a notice of registration serves.

(4 marks)
SUGGESTED ANSWER:
The certificate of incorporation shall serve as conclusive evidence that:
- a company has been duly registered as from the date mentioned in the certificate
that the incorporation process of the registered company have duly complied with
the requirements of the CA 2016
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CRG530 – JUNE 2018
- that the certificate shall also state the type of company that has been registered
Presently, a Notice of Registration will be issued as evidence of incorporation. A

Certificate of Incorporation will only be issued upon application made with a
prescribed fee.
(4 x 1 mark each= 4 marks)
4. In relation to preference shares, describe FOUR (4) rights normally attached to them.
(4 marks)
SUGGESTED ANSWER:
- Repayment of capital
- Participation in surplus assets and profits
- Cumulative dividends
- Voting rights
- Priority of payment of capital and dividends.

(Any 2 x 2mark = 4 marks)
5. Explain FOUR (4) situations in which the office of a company director becomes vacant.
(4 marks)
SUGGESTED ANSWER:
The situations in which the office of a company director becomes vacant are:
- When he is disqualified or prohibited to be a director by virtue of the CA 2016
- When he becomes a bankrupt or makes any arrangement or composition with his

creditors generally
- When he becomes of unsound mind or a person whose person or estate is liable to

be dealt with in any way under the law relating to mental disorder
- When he resigns his or her office by notice in writing to the company
- When he is absent for more than 6 months without permission of the directors from
meetings of the directors held during that period
- When he without the consent of the company in general meeting holds any other
office of profit under the company except that of managing director or manager
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CRG530 – JUNE 2018
- When he is directly or indirectly interested in any contract or proposed contract with

the company and fails to declare the nature of his interest in manner required by the
Act
- When he passes away

(Any 4 x 1mark= 4 marks)
6. State in brief any FOUR (4) key functions of the Companies Commission of Malaysia.
(4 marks)
SUGGESTED ANSWER:
- To encourage and promote proper conduct amongst directors, secretaries,

managers and other officers of a corporation
- To ensure that all corporate and business activities in the corporate sector are
conducted in accordance with established norms of good corporate
governance
- To enhance and promote the supply of corporation information under the laws
specified in the First Schedule
- To carry out research and commission studies on any matter relating to

corporate and business activities
- To advise the Minister generally on matters relating to corporations,

companies and businesses
- To carry out all such activities and to do all such things as are necessary or
advantageous and proper for the administration of the Commission
(Any 4 x 1 mark= 4 marks)
7. Explain the term ‘underwriting’ arrangement.

(4 marks)
SUGGESTED ANSWER:
Underwriting is the arrangement for a firm (the managing underwriter) to subscribe

or procure subscription for the shares to be issued in consideration to be paid by
the company.
Usually the managing underwriter is a merchant bank and is

responsible to arrange for sub-underwriting (by underwriting agreement) with a
consortium of merchant banks/issuing houses/stockbrokers.
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CRG530 – JUNE 2018
For companies with shares listed on the Bursa Malaysia or seeking quotation on the
Bursa Malaysia, they are required to have the issue underwritten to ensure that the
company will get the required funds it intends to raise by the public issue or offer
for sale.
(4 x 1= 4 marks)
8. Briefly state the TWO (2) conditions for the passing of a special resolution.
(4 marks)
SUGGESTED ANSWER:
a) The giving of 21 days- notice of the meeting

b) The resolution must be passed by a majority of 75% or three-fourths of the members
present at the meeting
(4 x 1= 4 marks)
9. There are two important registers pertaining to members. They are the Register of Members
/ Index of Members and the Register of Substantial Shareholders. Explain the requirements
of maintaining the Register of Members / Index of Members.
(4 marks)
SUGGESTED ANSWER:
Sect 50 of CA 2016 requires every company to keep a register of its members. The
particulars of each member and the number of shares held and amount paid must be
entered in the register.
If a company has more than 50 members, it shall keep an index of members in a

convenient form. Thus, a public company is usually required to have an index of
members.
Sect 54 of CA 2016 provides that the register of members and its index shall be kept at:
- The company’s registered office:
- Another office of the company in Malaysia:
- The office of the person who maintains the register in Malaysia.
(4 x 1= 4 marks)
10. Briefly explain the consequences of a creditors’ voluntary winding up

(4 marks)
SUGGESTED ANSWER:
The effects or consequences are as follows:

- Despite the commencement of the winding up of the company, its corporate status
and corporate powers continue until the company is dissolved.
- As the company assets will be liquidated, the company shall not continue its
business.
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CRG530 – JUNE 2018
- Any transfer of shares or alteration of status of members made after the

commencement of the winding up is void unless sanctioned by the liquidator.
- Any attachment, distress or execution against the company’s assets after the
commencement of the winding up shall be void.
- Any action against the company cannot continue or commence unless with the
leave of court.
(Any 4 x 1= 4 marks)
(Total: 40 marks)
PART B
Answer THREE questions only
QUESTION 1
Formiss Properties Bhd (Formiss) was incorporated on 1 February 2017 and the board of
directors has yet to convene the annual general meeting since the date of its incorporation. The
board is silent about it but there have been queries by members pertaining to the running of the
company.
Tuan Syed Hussein, a director, has contacted you, the company secretary of Formiss, seeking
clarification regarding the following matters:
(a) The appropriate time frame to convene the First Annual General Meeting of Formiss.
(5 marks)
SUGGESTED ANSWER:
Sec. 340 of the Companies Act 2016 provides that every public company must convene
the First AGM within 18 months from the date of its incorporation.
It need not be held in the year of incorporation or in the second calendar year of
incorporation provided that the First AGM is held not more than 18 months after its
incorporation. The section further provides that a company must hold its AGM within 6
months of the company’s financial year end.
However, for subsequent AGMs, it must be held every calendar year but not later than 6
months from the end of the company’s financial year and not later than 15 months after
the last AGM.
The company may apply to CCM to extend the period of 15 or 18 months and CCM may if
it thinks fit extend the period.
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CRG530 – JUNE 2018
(b) Draft the notice of the First Annual General Meeting of the company by including all the
relevant agenda to be considered at that meeting.
(10 marks)
SUGGESTED ANSWER:
(a) Notice of Annual General Meeting of Formiss Properties Berhad
FORMISS PROPERTIES BERHAD (123456-G) (�)

(Incorporated in Malaysia)
NOTICE OF FIRST ANNUAL GENERAL MEETING (�)
NOTICE IS HEREBY GIVEN that the First Annual General Meeting of the Company will be held
at Lot 10, Second Floor, Grand Riverview, Jalan Yahya, 18500 Kota Bharu, Kelantan on
Saturday, 16 May 2018 at 10.00 a.m. to transact the following ordinary business:- (�)(�)(�)
1. To receive the Audited Accounts for the financial year ended 31 January 2018 and
the Reports of the Directors and Auditors thereon(�)
2. To declare a final dividend of 3.0% less 28% income tax for the financial year ended 31 January
2018. (�)
33. To re-elect the following Directors, who are retiring pursuant to Article 98 of the Company’s
Articles of Association who being eligible offer themselves for re-election:-
- Mr A
- Mr B
- Mr C
- Mr D(�)
4. To re-appoint the auditors and to fix their remuneration(�)
5.To transact any other business (�)
6.As Special business(�)

To consider and if thought fit, to pass the following resolutions as Ordinary resolution: (�)
(a) Authority to allot shares

“THAT the Directors of the Company be and are hereby authorized pursuant to Section …..
of the Companies Act 2016, to issue shares in the Company at any time subject to Section
……. and upon such terms and conditions and for such purposes as the Directors may, deem
fit provided that the aggregate number of shares to be issued pursuant to this resolution does
not exceed 10 percent of the issued share capital of the Company for the time being.” (�)(�)
By order of the Board

Raslan bin Ahmad
Secretary
26 April 2018(�)(�)
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CRG530 – JUNE 2018
Notes:
1. A member of the Company entitled to attend and vote at this meeting is entitled
to appoint a proxy to attend and vote instead of him. (�)
2. A proxy need not be a member of the Company. (�)
3. If the proxy is executed by a corporation, the proxy form must be under its common seal
or the hands of its Attorney. (�)
4. The instrument appointing the proxy must be deposited at the registered office of
the Company at Lot 10, Second Floor, Grand Riverview, Jalan Yahya, 18500
Kota Bharu, Kelantan not less than 48 hours before the time appointed for holding meeting
(�)
(20� x 1/2 mark = 10 marks)

Note:
(Content of Notice of meeting is only a guide. Format is expected)
(c) Explain the duties of a company secretary BEFORE the annual general meeting.
(5 marks)
SUGGESTED ANSWER:
Duties of company secretary BEFORE AGM:
● To arrange for suitable venue for the meeting

● To prepare the necessary documentation for presentation at the meeting
● To obtain copies of the reports and accounts, and signed copies of the Balance
Sheet and Chairman’s Statement
● To arrange for the printing of proxy cards
● T arrange with the bank to open a dividend account
● To send the report and accounts to all registered shareholders
● To file signed copies of the annual audited accounts with the CCM
● To send invitations to those who may be called upon to attend the meeting
● To undertake preparations for the holding of a poll
● To prepare the agenda of the meeting in consultation with the chairman
● To arrange for the name cards to be paced on the main table where the chairman,
members of the board, secretary and the auditor will be seated
● To place the Register of Members (soft copy) at the entrance of the meeting room
for checking purposes
● To arrange for particular members to propose and second resolution appointing
auditors and fixing their remuneration.
(Total: 20 marks)
QUESTION 2
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CRG530 – JUNE 2018
PICON Technologies Bhd has just appointed Janice Tan, a newly qualified company secretary.
Being new in the profession, Janice faces difficulties in understanding the practices specifically in
the area of charges secured over company’s assets which are required to be registered with the
Companies Commission of Malaysia (CCM).
She seeks your advice on the following:
(a) Briefly explain on any four (4) types of debentures.

(6 marks)
SUGGESTED ANSWER:
1. Mortgage debentures – secured on the property of the company either in the form
of floating charge or fixed charge.
2. Simple debentures – issued without security and they are usually known as
bonds. On winding up the holders would rank with the unsecured creditors.
3. Redeemable debentures – issued with a fixed date of redemption or are redeemed

within a specified period.
4. Registered debentures – have certificates bearing the names and addresses of the
holders.
Note:
Any other relevant types of debentures and explanation
(1 mark for type and 1/2 marks for brief explanation = 6 marks)
(b) Explain the phrase “crystallization of a floating charge and the events that may cause
crystallization.
(5 marks)
SUGGESTED ANSWER:
Crystallization of a floating charge means floating charge will be converted to a fixed

charge.
Events that constitute crystallization:
● Default in repayment of interest or principal sum
● On the commencement of winding up or when the company ceases business
● When there is a clause that states a charge will crystallize upon the breach of
certain conditions.
(c) State two (2) disadvantages of a floating charge.
8
CRG530 – JUNE 2018
(2 marks)
SUGGESTED ANSWER:
● Priority given to fixed charge to take over the floating charge over the same
assets
● Lose assets over priority to judgement creditors
● Landlord may sell assets of floating charge to cover overdue rental
● Assets of floating charge may be used to pay preference creditors
(d) State the time period, documents, fees and the type of register book to be maintained for
registration of charges and the effects of its non-registration.
(7 marks)
SUGGESTED ANSWER:
Sect 352 of CA 2016 provides that charge will have to be registered with CCM within 30
days of its creation by filling a prescribed form and a fixed payment to CCM. Upon the
registration of the details of the charge, CCM will issue the certificate of registration.
The type of register book is the Register of Charges.
Failure to register the charge will result in severe consequences for the lender, the
company as well as the company’s officers. The charge will be void against the
liquidator or any creditor of the company. Company will be held liable and will have to
pay a default fine. Though the creditor becomes unsecured, the debt remains valid and
the creditor may sue for it.
(Total: 20 marks)
QUESTION 3
ERA Digital Bhd (ERA) is a company listed on the ACE Market of Bursa Malaysia since 2010.
Tan Sri Fakhrul Ahmad who was recently appointed as Chairman of the Board of Directors has
asked you several questions regarding the way in which board appointments are made.
The following events have recently occurred with respect to the directors of the company:
Datuk Harith, was recently appointed an independent non-executive director of ERA. Datuk Harith
was formerly an executive director of the same company eighteen (18) months ago.
Tan Sri Fakhrul noticed that some of the directors have to attend to some urgent business on a
short notice and has asked whether it would be possible to appoint alternate directors.
Mr Robert Lim, another independent non-executive director, has been absent from board
meetings without permission for seven consecutive months as he likes to go on long holidays.
Advise Tan Sri Fakhrul on the following:
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CRG530 – JUNE 2018
(a) Five (5) characteristics of an independent non-executive director as defined by the Listing
Requirements of Bursa Malaysia Bhd.
(5 marks)
SUGGESTED ANSWER:
Among the characteristics of an independent non-executive director as defined by

MICG is an independent non-executive director is
• An officer of the listed corporation or its related corporation
• A substantial/major shareholder of the listed corporation or its related

corporation
● Any person who is not a relative of any executive director, officer or major
shareholder of the listed corporation
● A person who is not acting as a nominee or representative of any executive

director or major shareholder of the listed corporation.
• A person connected to the Executive Director, officer or substantial/major

shareholder
• A professional adviser engaged by the listed corporation or any of its related

corporation
• Any person who has not been within the last two years and is not an officer of
the listed corporation.
(b) The appointment of Datuk Harith as an independent non –executive director of the
company. Provide comments and justify your answer.
(5 marks)
SUGGESTED ANSWER:
From the scenario above, Datuk Harith had been an executive director of the
company one and the half years ago, after which he was appointed an
independent non-executive director of the same company.
An independent director is one who should be independent of management and

free from any business or other relationship which could interfere with the
exercise of independent judgement or the ability to act in the best interest of the
company.
It is clear that Datuk Harith did not fulfill one of the characteristics of an
independent non-executive director which requires a person who has not within
the last two years and is not an office of the listed corporation.
(c) The appointment of an alternate director, including the rights and responsibilities of an
alternate director.
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CRG530 – JUNE 2018
(6 marks)
SUGGESTED ANSWER:
Any non-executive director may appoint an alternate director as his alternate

subject to the approval of the Board.
An alternate director must then complete Form 48A and lodge with CCM within one
month.
Form 49 particulars of Directors, Managers and Secretaries must be completed and
lodged with CCM within one month.
Register of Directors, managers and Secretaries must be updated.
An alternate director carries the same rights and responsibilities of a principal
director.
(d) Tan Sri Fakhrul is annoyed with Mr Robert Lim for his lack of commitment and has asked
you whether there are any provisions under either the Constitution/Articles of Association
or the Companies Act 2016 to remove him.
(4 marks)
SUGGESTED ANSWER:
As ERA has been listed on Bursa Malaysia since 2010, the assumption is ERA has
adopted the articles of association in Table A of the 4th Schedule of CA 1965. It is
also assumed that ERA has not passed a resolution to modify its constitution.
The Articles of Association/Constitution provides that a director who is absent

without permission for 6 consecutive months will be disqualified from becoming a
director of the company.
In this regard Robert Lim is disqualified from being a director of the company.
(Total: 20 marks)
QUESTION 4
HMS Corporate Solutions Provider is a professional corporate secretarial firm offering corporate
secretarial services to medium and large sized corporations. You are one of the senior company
secretaries of the firm. For the last few months, the firm has failed to contact the directors of Sinar
Mutiara Sdn. Bhd, one of your clients. The firm has tried all means of communication such as
sending mail to their business premises but it was returned, sending electronic mail but no reply
and neither were the directors answering their phone or fax. You are now thinking of vacating the
office of the company secretary of Sinar Mutiara Sdn. Bhd.
Required:
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CRG530 – JUNE 2018
a) Discuss the relevant sections of the Companies Act 2016 that allow you to vacate the
office of company secretary. State the required documents to be lodged to the Companies
Commission of Malaysia.
(6 marks)
SUGGESTED ANSWER:
a) The provisions of Section 237 of CA 2016 allows the company secretary to vacate
office when none of the directors of the company can be communicated with at the
last known residential address. The secretary may lodge a Notice of intention to
vacate the office of secretary to CCM. With this notification, the secretary shall
cease to be the secretary on the company on the expiry of 30 days from the
lodgment of the notice.
The secretary is not relieved from liability for any act or omission done before he
vacated office.
Any appointments and vacation of office of company secretaries and any changes
thereof must notify to the CCM by lodging Notice on return giving particulars in
Register of directors, managers and secretaries within one month from the date
of change. Subsequently, the register of directors, managers and secretaries must
be updated accordingly.
b) If the directors of Sinar Mutiara Sdn Bhd are unhappy with the secretarial services
provided by you, and would like to remove you as their company secretary, discuss the
necessary procedures for the removal of company secretary.
(4 marks)
SUGGESTED ANSWER:
The procedures for removal of company secretary are still subject to the
company’s Articles of Association/Constitution or the terms of his appointment.
The board of directors may pass a directors’ resolution to remove a secretary
and notify the CCM by filing a Form - Return giving particulars in register of
directors, managers and secretaries within one month from the effective date of
removal and the register of directors, managers and secretaries must be updated
accordingly.
The office of a company secretary shall not be left vacant for more than 30 days at
any one time.
( Any 4 x 1 mark = 4 marks)
c) Jamalauddin, one of the firm’s staff who is just newly appointed as an assistant company
secretary, would like to know the procedure for application and renewal of company
secretary’s licence.
(6 marks)
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CRG530 – JUNE 2018
SUGGESTED ANSWER:
Procedure for application and renewal of company secretary’s licence.
i) A qualified person can apply for a license to act as a company secretary by

filling in the Application for company secretary’s licence and fees of RM350.
ii) With related documents and information such as recent photograph, copy of
related certificate, referee letter and need to attend an interview.
iii) The applicant will have to sit for a written test and attend an interview
session where the candidates will be assessed on knowledge in the
company law and regulation, company secretarial practices, Practise Notes
and Code of Ethics for Company Secretaries issued by SSM.
iv) A licence issued under section 20G of the Companies Commission of

Malaysia (Amendment) Act 2015 shall be valid for a period of three years
from the date of issuance unless sooner suspended or revoked by the
Commission or upon cessation under regulation 10 of the Companies
Commission Of Malaysia (Licensing Of Secretaries) Regulations 2017.
v) The application for renewal of license shall be made at least thirty (30) days
before the expiry of the license by submitting relevant documents to SSM
together with a processing fee of RM350.00.
vi) An application to renew a license may not be accepted if CCM in the opinion
that the applicant has failed to act honestly or failed to use reasonable
diligence to discharge his duties as a secretary.
d) Recently, there were a few university students undergoing their practical training at the
firm. Farah, one of them has expressed her interest in pursuing a career as a company
secretary. She seeks your advice to explain the necessary qualification to become a
company secretary in Malaysia.
(4 marks)
SUGGESTED ANSWER:
Qualification to be a company secretary:
Section 235 of CA 2016 of the Act states that a company secretary shall be a natural
person of full age who has his principal or only place of residence in Malaysia.
Section 235 of CA 2016 requires the name of the first secretary to be named in the
Constitution/Articles of Association of the newly formed company. The Act also
stipulates that a person cannot act as a secretary of a company unless:
13
CRG530 – JUNE 2018
i) He is a member of a professional body, or any other bodies, which has been

prescribed by the Minister of Domestic Trade and Consumers Affairs by
notification published in the gazette; or
ii) He is licensed by the CCM in line with Section 139 B of the Act.
Membership in the following professional bodies has been approved and

accepted by the Minister as a qualification to act as company secretary.
MAICSA, MIA, MICPA, the Malaysian Bar Council, the Bar Council of Sabah and
Sarawak and the Malaysian Association of Company Secretaries.
(Total: 20 marks)
QUESTION 5
The members of Seagatec Sdn Bhd want to discontinue the company’s business and take back
their money to retire in comfort. The company is in a solvent position. They have come to you for
the following advice.
(a) Explain the circumstances in which a company may be wound up voluntarily.

(6 marks)
SUGGESTED ANSWER:
Section 432 of CA 2016): a company may be wound up voluntarily
(i) when the period, if any, fixed for the duration of the company by the memorandum or
articles expires, or the event, if any occurs, on the occurrence of which the memorandum
or articles provide that the company is to be dissolved and the company in general meeting
has passed a resolution requiring the company to be wound up voluntarily
(ii) if the company so resolves by special resolution
A company shall :
(i) within 7 days after the passing of a resolution for voluntarily winding up lodge a printed
copy of the resolution with the Registrar
(ii) Within 10 days after the passing of the resolution give notice of it in a newspaper
circulating generally throughout Malaysia
(6 x 1 mark =6 marks)
(b) Detail out the procedure for commencing a members’ voluntary winding up.
(8 marks)
SUGGESTED ANSWER:
14
CRG530 – JUNE 2018
- A members’ voluntary winding up is initiated by special resolution of the company and

can only proceed if the company is solvent.
- The directors must first make a written declaration (Declaration of Solvency) to the effect
that they have made an inquiry into the affairs of the company and are of the opinion that
the company is able to pay its debts in full within a period of 12 months after the
commencement of the winding up.
- The declaration will be made by way of Form 66 and filed with the CCM before the EGM
to pass the special resolution to wind up the company voluntarily.
- After the passing of the special resolution, notice of the resolution will have be filed with
the CCM within 7 days and advertised in a newspaper that circulates throughout Malaysia.
- The resolution will have to name a liquidator who shall proceed with the liquidation of the
company.
(c) If some members wish to carry on business while some others do not and wish to apply to
court for the company to be wound up, advise them on the persons who can apply to court
for a compulsory winding up.
(6 marks)
SUGGESTED ANSWER:
Only persons specified in Section 464 of CA 2016 can apply to the court to have a
compulsory winding up.
They are:
- The company
- A creditor
- A contributory or any person who is the representative of a deceased contributory or the
trustee in bankruptcy or the Official Assignee of the estate of a bankrupt contributory
- A liquidator appointed in a voluntary winding up
- The Minister pursuant to Sections 465 of CA 2016
- Bank Negara in the case of banks and finance companies under the purview of the
Ministry of Finance
- The CCM on the ground specified.
- The Malaysian Deposit Insurance Corporation (for financial institutions).
(Total: 20 marks)
END OF SOLUTION
15
CONFIDENTIAL 1 CRG 660 JAN 2018
SUGGESTED ANSWERS
Section A
1. Objectives of Code of Ethics of Company Secretary

• To instill professionalism among company secretaries within tenets of
morality, efficiency and administrative effectiveness √; and
• To uphold the spirit of social responsibilities and accountability in line
with the legislations, regulations and guidelines governing a company. √
(2√ X 2 = 4 marks)
2. Briefly describe two (2) types of shareholders’ meeting.
• annual general meeting – held once in every calendar year to transact the following
ordinary business: - to consider the audited accounts - to re-elect directors - to
declare dividend - to appoint auditors
• extraordinary general meeting – held between annual general meetings to transact
special business
• statutory meeting – section 142 requires a newly incorporated public company to
hold a statutory meeting within a period of not less than one month and not more
than three months after the company received its Form 23 (Certificate to commence
business). The purpose of the statutory meeting is to table the statutory report
• class meeting – holders of a class of shares which are held to consider variation of
their rights
(Any 2√ X 2 = 4 marks)
3. Section 133 of the Companies Act 1965, prohibits a limited company from giving
loans to a director. State the exceptions to the rule.
Exceptions of S.133:
i.funds provided to a director to meet expenditure incurred or to be incurred by

him for the purposes of the company or for purpose of enabling him to
perform his duties as an officer of the company. √
ii. funds given by the company to a director who is engaged in the full-time
employment of the company or its holding company to meet expenditure
incurred or to be incurred by him in purchasing or otherwise acquiring a
home. √
iii. any loan given to a director who is engaged in the full-time employment of
the company or its holding company, where the company has at a general
meeting approved of a scheme for the making of loans to employees of
the company and the loan is in accordance with that scheme. √
iv. if the person is a director of an exempt private company √
(4√ x 1 =4 marks)

4. Briefly explain the functions of an “independent non-executive director”.
An independent non-executive director is expected to play the following roles:
i) to help identify the right strategy that will improve shareholders’ value;
ii) to balance up board structure and
iii) to give independent view and judgement in the board decision making
process;
iv) to act as a “watchdog” and to monitor board processes.
v) advise the company on financial matters since independent non exec director
usually act as head of audit committee
vi) liase with the external auditors when they are performing the audit for the co.
vii) assist the company in providing advise in various committee such as
remuneration & risk management committee.
5. Sec 18(1) provides that MOA must contain the following clauses:
a. The name clause√

b. The objects clause √
c. The capital clause√
d. The limited liability clause√
e. The subscribers clause√
f. Registered office clause√
(Any 4√ x 1 = 4 marks)
6. .Under Section 122A of the Act, a person shall be deemed to be connected with a
director if he is:
a) a member of the director’s family i.e. the spouse, parent, child (including adopted
child or step child), brother, sister and the spouse of his child (i.e, son-in-law or
daughter-in-law) and spouse of his brother or sister (sister-in-law or brother-in-law) √
b) a body corporate which is associated with the director, that is: √

i) if the body corporate is accustomed or is under an obligation, formal or informal,
to act in accordance with the directions, instructions and wishes of that director
(e.g. chairman or advisor)
ii) if the director is also a director of that body corporate
iii) if the director and/or persons connected with him are entitled to exercise or
control the exercise of more than 15% or the total voting rights in the body
corporate.
iv) if the director has a controlling interest in the body corporate
c) a trustee of a trust under which the director or a member of his family is a

beneficiary√
d) a partner of the director or a partner of a person deemed connected with the

director. √

(4√ x 1 = 4 marks)
7. Briefly discuss the characteristics of an exempt private company and its exemptions.
The characteristics of an exempt private limited company are:

• must not have more than twenty members √
• the shares must not be owned directly or indirectly by a corporation√
An exempt private company is exempted from:

• submitting its financial statements with its annual return with CCM √
• restriction on loans to directors and persons connected to directors under
section 133 and section 133A of the Act. √
(4√ x 1 = 4 marks)
8. State the circumstances where a person may be disqualified to act as secretary of a

company.
Under Section 139C of the Act, a person is disqualified to act as a secretary if:
a) he is an undischarged bankrupt; √
b) he is convicted, within or outside Malaysia of: i) any offence in connection with

the promotion, formation or management of a corporation ii) any offence
involving fraud or dishonesty punishable on conviction with imprisonment for
three months or more iii) any offence involving dishonesty and lack of
reasonable diligence in the discharge of his duties iv) insider trading v) any
offences in which proper company accounts are not kept √
c) he ceases to be a member of the professional body prescribed by the Minister

under Section 139A of the Act√
d) he ceases to be a holder of a valid license issued under Section 139B of the

Act (b) Starlight Berhad issued dividend warrants√
(4√ x 1 = 4 marks)
9. Disadvantages of going public of companies:

• Tedious and expensive listing costs – substantial cost will incur for the
application for listing, consultation of merchant bankers, cost for printing of
prospectus and the listing fees. √
• Loss of privacy – every listed company to make available to the public
information necessary to make informed investment decisions for them to
enjoy equal access to the information. √
• Risk of eventual dilution of control – the entrepreneurial or family concern
will have to be shared with the shareholders at large and directors will have to
share control of the company. √
• Accountability to the public – greater responsibility in promoting share
performance and ensuring better return on investment by way of dividend. √

•Disclosure requirements – the investors have to be informed the company’s

performance through bi-annual press release or annual reports, AGM and
EGM. √
• Volatility – when the market is volatile, the share price could fluctuate
considerably and will affect the company’s value. √
(Any 4√ x 1= 4 marks)
5. Agree. √√
• A member of a company
▪ must hold shares, √
▪ be a subscriber to memorandum and articles of association of the
company, and √
▪ his or her name must be included in Register of Member of the
company. √
• A shareholder
▪ Are person only hold shares of the company, √
▪ but not necessarily be a subscriber to memorandum and articles of
association of the company, √
▪ his or her name is not included in Register of Member of the company.
√
(8√ x 0.5 = 4 marks)
(Total: 40 marks)
SECTION B
QUESTION 1
a) Ordinary Business in AGM

• The consideration of the accounts, balance sheet and the reports of
the directors and auditors. √
• Declaring a dividend as recommended by the directors. √
• Re-election of directors. √
• Appointment and fixing of the remuneration of auditors. √
b) Company Secretary’s Duties During Annual General Meeting

• To ensure that the directors are properly seated √
• To check for a quorum √
• To read the notice of the meeting when instructed by the chairman √
• To note the names of those members asking questions √
• To assist the chairman in the counting of votes √
• If the polling documentation has been arranged, the secretary will advise
the chairman that it should be taken immediately √
• To ensure the chairman give the vote of thanks at the closure of the
meeting √
c) Section 169 of the Companies Act 1965

• requires company to table its audited accounts at an AGM √ not later
than 6 months after the company’s financial year end. √

• there is no legal requirement either in the CA 1965 or in the Articles that

requires the audited accounts to be adopted by the company in
general meeting
• The purpose for which the audited accounts are to be tabled before AGM
is for the shareholders to seek clarification from the board of
directors on any matters pertaining to the audited accounts and not
for the shareholders to approve or adopt the accounts. √
• Where any adjustment proposed in the meeting was not approved,
the audited accounts for the year would not be amended but an
adjustment shall be made in the accounts of the following year.
Section 143 – require a company to hold its AGM once in a year. √ The first
AGM is to be held not more than 18 months √while the subsequent AGM is to
be held not more than 15 months. √
d) Circumstances where special majority is required to pass as an ordinary resolution.

• Appointment of a director of a public company who have attained
the age of 70 (s.129) √
• Appointment of another person to fill the casual vacancy created by
the removal of the company’s auditor (s.172) √
(Total: 20 marks)
QUESTION 2
a) Under section 218 of the Act, court may wind up a company on any of the following
grounds:
(i) Default in holding a statutory meeting and failing to lodge the statutory
report. √
(ii) The company fails to commence business within 1 year from
incorporation or suspends business for more than a year. √
(iii) The membership of the company (except for a wholly owned subsidiary) is
below 2. √
(iv) The company is unable to pay its debt. √
(v) The directors have acted in their own interests rather than in the interests
of the members as a whole, or in any other manner which appears to be
unfair to other members. √
(vi) Based on the inspector’s report √ of which he is of the opinion:
a) That the company cannot pay its debts √ and
b) That in the interests of the public or the shareholders or the
creditors that the company should be wound up. √
(vii) The court is of the opinion that it is just and equitable that the company
be wound up √ under any of the following circumstances:
a) Where the main object of the company has failed √
b) Where there was a deadlock in the management √
c) Where the company was formed for a fraudulent purpose √
d) Where the company was a bubble company √
e) Where a director had voting control and refuse to hold meeting,

procure accounts or pay dividends √
(viii) The company has held a license under the Banking Act 1973 and that
license has been revoked, expired and has not been renewed.
b) Procedure for compulsory winding up:

(i) Presentation of the petition by the company√ (special resolution
required), creditors, contributories, the Official Receiver, the liquidator, the
Minister of Trade and Industry or Bank Negara.
(ii) Hearing by the court√ at which the winding up order is made.
(iii) Separate meetings of the company and creditors summoned by the
liquidator√ to decide whether or not to appoint a Committee of
Inspection√ to act with the liquidator. If there is no liquidator appointed,
the Official Receiver must summon separate meetings of the
creditors and contributories√ for the purpose of determining whether or
not to apply to court for appointment of a liquidator to replace the
Official Receiver√.
(iv) Liquidator files notice of his appointment on Form 70 with the CCM and
the Official Receiver√ within 14 days from the date of his
appointment√.
(v) Liquidator continues with the duties of winding up which will involve calling
meetings of the Committee of Inspection√.
(vi) Liquidator distributes assets in correct legal order√.
(vii) Liquidator applies to the court for an order for his release and that the
company be dissolved√.
(Any 10√ x 1 = 10 marks)
c) Commencement of winding up – at the time of the presentation of the petition√

Deemed to be dissolved – on the expiration of three months after the lodgment
of Form 69 with the CCM √
(2√ x 1 = 2 marks)
d) Functions of Committee of Inspection

• To appoint liquidator. √
• To assist and supervise the acts of the liquidator. √
• To act in fiduciary position. √
(3√ x = 3 marks)
(Total: 20 marks)

QUESTION 3
a. If Plan A is to be considered:
(i) Three methods by which a public company can issue shares to the public are as follows:
• Public issue – a direct allotment, where the shares are issued and allotted directly to
members of the public who have subscribed for the shares. √ √ √
• Offer for Sale – Two scenarios: √√√

1. Where a private company seeks to go public, a portion of their shares held by
the existing shareholders may be offered for purchase by members of the
public.
2. A company allots or place shares to an issuing house which then will offer
them for sale to the public.
• Rights Issue – an offer (in the contractual sense) to the existing members of a
corporation of new shares for subscription. √√√
(ii) Underwriting arrangement
It is an arrangement for a firm (the managing underwriter) to subscribe or procure

subscription for the shares to be issued in consideration for a commission to be paid by the
company. √ It is not a statutory requirement for the issue of shares to be underwritten, but for
companies with shares listed on the Bursa Malaysia or seeking quotation on the Bursa
Malaysia, they are required to have the issue underwritten to ensure the company will get
the required funds it intends to raise by the public issue or offer for sale. √ √
(b)
(i) The time when Plan B (issuance of mortgage debentures) is preferred rather than Plan A
(Offer for Sale):
i) When Intradco wishes to obtain additional capital for investments but existing
shareholders do not wish to lose control of company. The issuance of new ordinary
shares would confer the shareholders full right of voting and thereby the shareholder
will be able to participate in the running of the company. √√
For the issuance of debentures to SBB, the holders of the debentures does not have
rights to vote at a general meeting hence holders have no special ability to exercise
control and participate in the running of the company.
ii) When Intradco wishes to obtain additional capital for investments but existing
shareholders do not wish their existing shares to be diluted. The issuance of
debentures with no rights for conversion into equity shares on maturity would help
Intradco to achieve its objective to secure adequate financing while conserving the
shareholders’ rights (no dilution of shareholders’ shareholding). √√

iii) When Intradco wishes to obtain additional capital for investments but existing
shareholders want their exposure to be quantified and no sharing of future profits.
The interest payable on the debentures is usually fixed on issuance, though normally
higher than the prevailing interest rate to attract takers. Intradco would be able to
calculate and know the total amount of interest to be paid on borrowings. In addition,
when Intradco made handsome profits such profits need not be shared as in the case
for issuance of ordinary shares where all shareholders would be entitled to dividend if
a dividend is declared on the shares. √√
(3 points + explanations = 6 marks)
(ii) Characteristics of a Fixed Charge:

• The charge sticks to the particular asset, until the charge is satisfied. If the asset is
transferred, the charge follows it √
• The company is not at liberty to deal with the charged assets. √
(2 √ = 2 marks)
(20 marks)
END OF SOLUTION

SAMPLES QUESTIONS & SUGGESTED ANSWERS
MEETING
***PLEASE USE COMPANIES ACT 2016 IF WANT TO ANSWER THIS QN****
JuN 2017 - QUESTION 2

The board of directors of Prasarana Properties Berhad, a property development
company, has decided to hold its 10th Annual General Meeting (AGM) on 20 January
2017. Besides the ordinary businesses, the agenda will include two special
businesses;
(i) to change the name of the company to Prasarana Alam Berhad; and
(ii) to alter its objects clause to permit it to carry on business as hoteliers.
A number of members have written to the company indicating their displeasure on

these proposed changes and they would like to demand a poll vote to object the
amendments. Datuk Seri Hamdan, who has recently been appointed as Chairman of
the board of directors, will be chairing this forthcoming AGM. He seeks your advice
on the following:
a) Explain the requisites of a valid meeting.

(9 marks)
b) Explain the purpose of demanding a poll vote, who can demand a poll vote and
how can Datuk Seri Hamdan deal with this demand?
(5
marks)
c) State the business to be transacted and the types of resolution required for
approving both the ordinary and special businesses in the AGM of Prasarana
Properties Berhad.
(6
marks)
ANSWER 2
a) A valid meeting is a meeting: -

• Which has been properly convened(√)
It must be called by persons with the proper authority and the following are
the persons empowered to convene general meetings of a company:
- The board of directors(√)
- If authorized by the articles, any director may, whenever he thinks fit convene
an EGM
- Two or more members holding not less than 10% of the issued share
capital of the company, or if the company has no share capital, not less
than 5 % in number of the members or such lesser number as allowed
by the articles. (√)
- Any of the requisitionists holding more than one – half of the total voting
rights of all the requisitionists requisitioned for an EGM may proceed
to convene the EGM if the directors fail to convene the EGM. (√)
- The court has the power to convene or direct the calling of a general
meeting of the company where it is for any reason impracticable to call
the meeting in any manner as provided by the articles. (√)
Further, a meeting will not be properly held unless proper notice of

meeting is sent out to all persons entitled to receive it. They should be
notified in advance, of the date, time and place at which a general
meeting will be held, and the nature of the business to be transacted at
the meeting. (√) The text of the resolution must be set out clearly in the
notice. It must contain sufficient information to enable members to decide
whether or not to attend the meeting.
• Which is properly constituted(√)

For a meeting to be properly constituted, the quorum must be present. If
there is no quorum, any business transacted and resolution passed is invalid.
The articles of the company usually will specify the requisite number
of members to constitute a quorum. If the articles do not have a quorum
S147 (1)(a) CA1965 provides that two members of the company
personally present shall be a quorum. (√)
If the requisite number is not present, the meeting should be formally
adjourned. (√)
Further, S149 (1) CA1965 provides that a member of a company who is
entitled to attend and vote at a meeting is entitled to appoint another
person as his proxy to attend and vote for him. (√)
• Which is properly conducted(√)

- There must be a chairman. The board of directors may, and usually does,
appoint one among them to be the chairman of the board. If so appointed,
the chairman presides as chairman at general meeting of the company.
(√) If however, the chairman is not present within 15 minutes after the time
appointed for the holding of the meeting, or if present, is unwilling to act, the
members present may elect one of their number to chair the meeting.
It is the duty of the chairman to preserve order at the meeting and to
take care that the proceedings are conducted in a proper manner. (√)
- Voting by show of hands, The Articles provide that every member or
corporate representative present shall have one vote each on show of
hands irrespective of their shareholdings. (√)
- Voting by poll are given proportionately the number of shares held.
The Articles provide the manner on how poll should be demanded (i.e.
before or on the declaration of the result of show of hands). (√)
b) Demand for a poll
The purpose of demanding a poll is to permit the casting of proxy votes

and to determine the result on the basis of votes related to
shareholding.(√) When a poll is demanded the chairman has to ascertain
that it is properly demanded i.e. by those who have the right to demand a
poll before or on the declaration of the result of show of hands:
i) the chairman (√)
ii) at least 5 members present in person or by proxy (√)
iii) any member(s) present in person or by proxy holding more than
10% of the total voting rights of all the members present at the
meeting (√)
iv) any member(s) holding shares more than 10% of the total paid up
capital (√)
The chairman has the power to decide when and how the poll shall be taken
(Art 52). The chairman should consider whether it will be better to
conduct the poll at the end of the meeting (as is usual to do so), or it
should be adjourned to a later date. (√) A poll demanded on the election
of chairman or on a question of adjournment shall be taken immediately,
and a poll in respect of other questions may be taken at once or after an
interval or adjournment or otherwise as the chairman may direct. If it is to
be conducted at a later date, the chairman shall move that the meeting be
adjourned either sine die or fix a date, time and venue.
c) The business and type of resolution required for approving each of the items in
the agenda of the AGM.
(i) declaring a dividend - an ordinary resolution (√)
(ii) the consideration of the accounts, balance sheets and the report
of the directors and auditors - an ordinary resolution(√)
(iii) the election of directors in place of those retiring - an ordinary

resolution (√)
(iv) the appointment and fixing of the remuneration of the auditors -

an ordinary resolution (√)
(v) to change the name of the company to Prasarana Alam Berhad - a

special resolution (√)
(vi) to change its objects to permit it to carry on business as hoteliers

- a special resolution (√)
For passing an ordinary resolution requires 14 days’ notice and

special resolution requires 21 days’ notice.
(Total: 20 Marks)
COMPANY SECRETARY
SAMPLE QUESTIONS AND SUGGESTED ANSWERS
JuN 2017 - QUESTION 3
You are a company secretary employed by Renhill Management Consultancy Sdn Bhd, a
professional corporate secretarial firm offering corporate secretarial services to small and
medium sized corporations. For the last few months, the firm has failed to contact the
directors of Prowajah Sdn Bhd, one of your clients. The firm had tried all means of
communication such as sending mail to their business premises but it was returned, sending
electronic mail but no reply and neither were the directors answering their phones. You are
now considering vacating the office of the company secretary of Prowajah Sdn Bhd.
Required:
a. Discuss the relevant sections of the Companies Act 1965 that allow you to vacate the
office of company secretary. State the required documents to be lodged with the
Companies Commission of Malaysia.
(7 marks)
b. If the directors of Prowajah Sdn Bhd were unhappy with the secretarial services
provided by you, and would like to remove you as their company secretary, discuss
the necessary procedures for the removal of a company secretary.
(4 marks)
c. Recently, there were a few university students undergoing their internship at the firm.
Suraya, one of them has expressed her interest in pursuing a career as a company
secretary. She seeks your advice to explain the necessary qualification to become a
company secretary in Malaysia.
(5 marks)
d. Amirul, a newly appointed assistant company secretary of the firm would like to know
the procedures for application and renewal of company secretary’s licence.
(4 marks)
(Total: 20 marks)
ANSWER 3
a) Notwithstanding the provision of Section ___) (√), where the office of secretary of a
company shall not be left vacant for more than a month at any one time.(√) If
none of the directors of the company can be communicated with at the last known
residential address, the secretary may lodge Notice of intention to vacate the
office of secretary.(√) With this notification, the secretary shall cease to be the
secretary on the company on the expiry of one month (√) from the date of the
notice.
Section __ however states that the secretary shall not be relieved from liability for
any act or omission done before the secretary vacated the office.(√)
Any appointments and vacation of office of company secretaries and any changes
thereof must notify to the CCM by lodging Return giving particulars in register of
directors, managers and secretaries (√) within one month from the date of
change. Subsequently, the register of directors, managers and secretaries must
be updated accordingly.(√)
b) The board of directors may pass a directors’ resolution (√) to remove a secretary
and notify the CCM by filing Return giving particulars in register of directors,
managers and secretaries (√) within one month (√) from the effective date of
removal and the register of directors, managers and secretaries must be
updated accordingly.(√)
c) Qualification to be a company secretary:
Section ____ (√) of the Act states that a company secretary shall be a natural
person of full age (√) who has his principal or only place of residence in
Malaysia. (√)
Section _____ of the Act requires the name of the first secretary to be named in the
articles of association of the newly formed company. The Act also stipulates that a
person cannot act as a secretary of a company unless:
i) He is a member of a professional body, or any other bodies, which has

been prescribed by the Minister of Domestic Trade and Consumers Affairs by
notification published in the gazette; (√) or
ii)
iii) He is licensed by the CCM in line with Section ____ of the Act. (√)
Membership in the following professional bodies has been approved and accepted
by the Minister as a qualification to act as company secretary.
MAICSA, MIA, MICPA, the Malaysian Bar Council, the Bar Council of Sabah and
Sarawak and The Malaysian Association of Company Secretaries.
iv) Holder of a valid practising certificate from CCM
c) Procedure for application and renewal of company secretary’s license.
i) A qualified person can apply for a license to act as a company secretary

from CCM with the form provided by CCM
ii) With related documents and information such as recent photograph,
copy of related certificate, referee letter and need to attend an interview.
iii) Need to pay processing fees of RM350 together with the application.
(Total: 20 marks)
SAMPLES QUESTIONS & SUGGESTED ANSWERS
DIRECTORS
JUNE 2017 - QUESTION 1
Scientex Sdn Bhd has received several proposals from its directors to be approved at
the board meeting. The board of directors is uncertain whether the following proposals
are valid and do not contravene the provisions of the Companies Act 1965. As a
company secretary, you are required to advise the board of directors on the following
proposals:
a. The company has been awarded a RM40 million project by the government of
Brunei, and Farah, a director of the company has undertaken the job to set up
an office and she has approached the company for a loan for this purpose.
(5 marks)
b. Ken, an independent non-executive director of Scientex Sdn Bhd has been
urging the board of directors to give him a loan of RM900,000 to purchase a
bungalow house for him.
(5 marks)
c. Raja, an executive director has requested a loan from the company to enable
him to purchase shares in the company. The recent Annual General Meeting of
the company has approved a scheme of loan to employees to purchase shares
of the company.
(5 marks)
d. Halim, the Managing Director of the company, is in the process of getting a
personal loan from MUI Development Bank and the bank would like Halim to
provide security for the loan. Halim has approached the board of directors
indicating that he would like the company to pledge the company’s multi-storey
building located at Jalan Kilang to secure his personal loan.
(5 marks)
Required:
Advise the board of directors and briefly discuss the statutory provisions of the
Companies Act 2016 that would affect the above situations.
(Total: 20 marks)
ANSWER 1
a. The proposal for the loan is valid (√) because the loan provided to a director is
to meet expenditure incurred or to be incurred by her for the purposes of the
company or for purpose of enabling her to perform her duties as an officer
of the company (√)
Section ___ (√) states that a company (other than an exempt private company)
shall not:
 Make a loan to a director of the company or
 Make a loan to a director of a company which is deemed to be related to
the company
 Enter into any agreement or provide any security in connection with a loan
made to such director
However, there is exception to the rule states that, any funds provided to
a director to meet expenditure incurred or to be incurred by him for the
purposes of the company or for purpose of enabling him to perform his duties
as an officer of the company is sanctioned. (√√)
b. The proposal for the loan is invalid (√) because the loan provided to a director
is not to meet expenditure incurred or to be incurred by her for the purposes
of the company or perform his duties as an officer of the company (√).
Furthermore, exception to the rule states that, funds given by the company to
a director who is engaged in the full time employment (√) of the company to
meet expenditure incurred or to be incurred by him in purchasing a home.
Related to the case, he is a non-executive director (not working full time)
for the company, therefore he is not eligible for the loan. (√)
Section ____ (√) states that a company (other than an exempt private
company) shall not:
the company
c. The proposal for the loan is valid (√) because the recent Annual General
Meeting of the company has approved scheme of loan to employees (√)
to purchase shares of the company and director is engaged in a full-time
employment of the company.(√)
Section ___(√) states that a company (other than an exempt private company)
shall not:
the company
However, there is exception to the rule states that, any loan given to a
director who is engaged in the full-time employment of the company where the
company has at a general meeting approved of a scheme for the making of
loans to employee of the company and the loan is in accordance with that
scheme. If the approval of loan is not given as aforesaid, the directors
authorizing the making of the loan shall be jointly or severally liable to
indemnify the company against any loss arising there from. The loan shall
be repaid within 6 months from the conclusion of that meeting (√)
d. The proposal for the loan is invalid (√) because the security provided in
connection with a loan made to Salim is for his personal loan which
obviously not to meet the expenditure incurred (√) or to be incurred by him
for the purposes of the company. Therefore, the board of directors cannot
approve such loan since it will contravene section ___ (√).
Section ____ (√) of the Companies Act 1965 states that a company (other than
exempt private company) shall not enter into any agreement or provide any
security in connection with a loan made to such director (√).
(Total: 20
marks)
JUNE 2018 - QUESTION 3
ERA Digital Bhd (ERA) is a company listed on the ACE Market of Bursa Malaysia since
2010. Tan Sri Fakhrul Ahmad who was recently appointed as Chairman of the Board
of Directors has asked you several questions regarding the way in which board
appointments are made.
The following events have recently occurred with respect to the directors of the
company:
Datuk Harith, was recently appointed an independent non-executive director of ERA.

Datuk Harith was formerly an executive director of the same company eighteen (18)
months ago.
Tan Sri Fakhrul noticed that some of the directors have to attend to some urgent
business on a short notice and has asked whether it would be possible to appoint
alternate directors.
Mr Robert Lim, another independent non-executive director, has been absent from
board meetings without permission for seven consecutive months as he likes to go on
long holidays.
Advise Tan Sri Fakhrul on the following:
(a) Five (5) characteristics of an independent non-executive director as defined by

the Listing Requirements of Bursa Malaysia Bhd.
(5 marks)
SUGGESTED ANSWER:
Among the characteristics of an independent non-executive director as

defined by MICG is an independent non-executive director is
• An officer of the listed corporation or its related corporation √
• A substantial/major shareholder of the listed corporation or its related

corporation√
 Any person who is not a relative of any executive director, officer or
major shareholder of the listed corporation√
 A person who is not acting as a nominee or representative of any

executive director or major shareholder of the listed corporation. √
• A person connected to the Executive Director, officer or

substantial/major shareholder√
• A professional adviser engaged by the listed corporation or any of its

related corporation √
• Any person who has not been within the last two years and is not an
officer of the listed corporation.
(Any 5 √ x 1 mark = 5 marks)
(b) The appointment of Datuk Harith as an independent non –executive director of

the company. Provide comments and justify your answer.
(5 marks)
SUGGESTED ANSWER:
From the scenario above, Datuk Harith had been an executive director of
the company one and the half years ago, after which he was appointed an
independent non-executive director of the same company. √√
An independent director is one who should be independent of

management and free from any business or other relationship which
could interfere with the exercise of independent judgement or the ability
to act in the best interest of the company. √
It is clear that Datuk Harith did not fulfill one of the characteristics of an
independent non-executive director which requires a person who has not
within the last two years and is not an office of the listed corporation. √√
(5 √ x 1 mark = 5 marks)
(c) The appointment of an alternate director, including the rights and

responsibilities of an alternate director.
(6 marks)
SUGGESTED ANSWER:
Any non-executive director may appoint an alternate director as his

alternate subject to the approval of the Board. √
An alternate director must then complete Form 48A and lodge with CCM
within one month. √
Form 49 particulars of Directors, Managers and Secretaries must be
completed and lodged with CCM within one month. √
Register of Directors, managers and Secretaries must be updated. √
An alternate director carries the same rights and responsibilities of a
principal director. √√
(6 √ x 1 mark = 6 marks)
(d) Tan Sri Fakhrul is annoyed with Mr Robert Lim for his lack of commitment and
has asked you whether there are any provisions under either the
Constitution/Articles of Association or the Companies Act 2016 to remove him.
(4 marks)
SUGGESTED ANSWER:
As ERA has been listed on Bursa Malaysia since 2010, the assumption is
ERA has adopted the articles of association in Table A of the 4th Schedule
of CA 1965. It is also assumed that ERA has not passed a resolution to
modify its constitution. √
The Articles of Association/Constitution provides that a director who is

absent without permission for 6 consecutive months will be disqualified
from becoming a director of the company. √ √
In this regard Robert Lim is disqualified from being a director of the
company. √ √
(Any 4 √ x 1 mark = 4 marks)
(Total: 20 marks)

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FINAL ASSESSMENT

CRG660 – COMPANY SECRETARIAL PRACTICE

Resignation of a company secretary:

b. Assuming Najah does not vacate the office of company secretary of

Exclusion of liability of a company secretary:

• The company secretary is a corporate officer √. As such, he cannot be exempt from,

• A fixed charge is a charge created on a fixed asset of the company. √

Appointment of new directors in public companies must be made in a general

b) The terms of appointment as a Managing Director of the company

The appointment of a managing director is usually provided in the constitution√ and

1) The company is not carrying on business or is not in operation√

PART A – 40 QUESTIONS (40 MARKS)

● Written resolution is not allowed for Syntex Bhd. ( ) In accordance to Section

Winding up a business is not the same as bankruptcy, though it is usually a result of

b. Briefly describe the commencement of a compulsory winding up.

a. List six (6) persons:

c. If the company itself is the petitioner, briefly explain the procedure:

d. Explain three (3) circumstances:

● Ownership of the share changes by voluntary act √

● Ownership of the share changes by operation of law √

b. The statement containing Particulars of a Series of Debentures must be registered with

Briefly explain the particulars of the statement.

b. The FOUR (4) particulars are:

Dato’ Tazzudin Ramzey, a professional engineer and Datuk Kushairie Ahmad, a

a) Briefly explain three (3) criteria of a non-executive director

b) Discuss the items to be included in the declaration a person before he can be

i. He is not an undischarged bankrupt

c) Discuss the effect of disqualification of a person as director of a company.

i A director is guilty of an offence if he still holds office as a director

iv If there is only one director in the company, and he is disqualified,

v Upon disqualification of a director, a casual vacancy is created and the

(Any 6 x 1 mark = 6 marks)

i) No right to attend or vote at meetings and any purported exercise of such

1. Meeting must be properly convened

A notice of the meeting should be issued to every member, director and

2. Meeting must be properly constituted.

Quorum is the minimum number of persons who must be present at the

The constitution usually provided for the appointment of a chairman.

1. In the case for companies having a share capital

a. Is it possible for MSB to apply for deregistration? Explain.

i. What can JBB do to recover its loan?

ii. Explain the process of compulsory winding up.

iii. Explain the effects of a liquidator’s (3 marks)

• the directors' powers will

• any transfer of shares or any alteration in the status of members will be

iv. Explain the functions of a committee of inspection in the dissolution process

i. To advise and assist the liquidator of the company;

c) If the investigation of the liquidator of a company undergoing member’s voluntary

The liquidator will need to arrange for a creditor’s voluntary liquidation

a. Discuss the terms of appointment for a Managing Director.

The form is known as - Declaration by a person before appointment as director or by a

Declarations to be made by a director:

(Any 6√ x 1mark each = 6 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

Exceptions to the rule are:

• Funds provided to a director to meet expenditure incurred or to be incurred by him

b. In your own words, explain the characteristic of debentures.

2.Redeemability Whether redeemable with a specified period or only upon the

3.Security Whether secured on the property or undertaking of the company