MEMORANDUM AND

ARTICLES OF ASSOCIATION

THE CONSTITUTION OF THE COMPANY

Must be lodged
incorporation

with

CCM

(ROC)

upon

Shall bind company & its members to the same

extent as if signed & sealed by each member
respectively.
Constitute a contract:
Between co & its members
Among members
Between co & outsiders

Deemed to contain
covenants each
member to observe all
provisions of M& A

RULES OF CONSTRUCTION OF THE

MEMORANDUM OF ASSOCIATION
I. Contents
S 18 provides that MOA must contain the
following basic clauses:
a) Name of the company
b) The registered office clause
c) Object clause
d) Capital clause
e) Limited liability clause
f) Subscribers clause

RULES OF CONSTRUCTION OF THE

MEMORANDUM OF ASSOCIATION

I. Form
S.18(1) provides that the MOA shall be printed
and divided into numbered paragraphs and
dated
S.18(2) provides that the document must be
signed by the first subscribers in the presence
if another person

II. Adopting the Third Schedule

S.19 (1) provides that,unless expressly
excluded or modified,the powers of the
company shall include the power set forth in
the Third Schedule

RULES OF CONSTRUCTION OF THE

ARTICLES OF ASSOCIATION
I. General Contents
II. Specific Contents for Private
Companies
III. Specific Contents for Companies
Limited by Guarantee
IV. Specific Contents for Listed
Companies
V. Form
VI.Adopting Table A of the Fourth

I. General Contents
The Act does not prescribe the contents of the Articles of
Association of the company
It may be contructed to include all articles deemed fit by
company
For example :

Share capital and variation of rights

Liens
Call on shres
Transmission of shares
Forfeiture of shares
Coversion of shares into stock
Capitalization of profits
Notices
Winding Up

I. General Contents
For example

Alteration of capital
General Meeting
Proceeding at general meetings
Directors : appointments
Power and duties of directors
Proceedings of directors
Managing director
Associate director
Secretary
Seal
Accounts
Dividends and reserves
Indemnity

II. Specific Contents for Private

Companies
S. 15 requires a private company to state
in either its Memorandum or Articles of
Association that :
The right to transfer shares is restricted
The number of member is restricted to not
more than 50
The prohibiton of any invitation to the public
to subcribe shares/debenture/deposit money
with the company

III. Specific Contents for Companies

Limited by Guarantee

S.24 - The Memorandum & Articles of Association

of a company limited by guarantee
Power of such a company limited as follow :
The provision of the Third Schedule shall not apply
Receive any gift,donations or grants through personal
appeals only
Not invest in or incorporate any subsidiary company
The income and property of the co derived shall be
applied solely towar the promotion of the object of
the co
No salary and no remuneration of the benefit in
money given to the member of the board

III. Specific Contents for Companies

Limited by Guarantee

Power of such a company limited as follow :

No addition,alteration or amendment in MoA & AoA
unless approved by Minister charged with the
responsibilty for companies
No person shall be appointed as a member of the
board unless approved by Minister charged with the
responsibilty for companies
Ensure that the co and the fund of co is not used for
any form of political activity/unlawful purpose
Any property left after the satisfaction of all its debts
and liabilities upon winding up shall not be distributed
among the members of the company but shall be
given to some other institution company (approved
by Director-Genral of Inland Revenue)

IV. Specific Contents for Listed

Companies

Chapter 7 of the Listing Requirement specifies the

provisions which a listed co must ensure are
contained in its AoA.
The rule and regulations governing the following
matters are either restricted and/or further
prescribed by C7 of the Listing Requirement:

With regards to shares

Directors' borrowing power to be stated
Meeting, voting rights and proxies
Records of 'Depositors'
With the regards to the directors
Deadline for accounts to be sumitted
Winding up and Liquidator's commision rules

V. Form

S.29 (4) provides that the AoA shall be

printed and divided into numbered
paragraphs be signed by the subscribers
to the Memorandum in the presence of
another person

VI. Adopting Table A of the Fourth

Schedule.

S. 30 provides that the co may adopt all or

any of the regulations contained in Table A
of the Fourth Schedule

RULES OF INTERPRETATION OF THE

M&A
The following are the rules of interpretation of the
M&A
The M&A is kept at the registered office and filed at the
CCM and thus considered as a 'public' document
The M&A is a 'contract' that binds the co anf the
members to the same extent as if they respectively had
been signed and sealed by each members(S33(1)
Members are required to observe all the provisions of
the M&A ( S.33(1))
In the event of the conflict between the Companies Act
and M&A, the former shall prevail
In the event of conflict between the Memorandum and
the Articles, the former shall prevail

ALTERATION TO MOA &

AOA

ALTERATION TO MOA

SECTION 23: CHANGE OF NAME

SECTION 28: CHANGES TO THE

OBJECT CLAUSE

SECTION 62: CHANGE IN CAPITAL

PROCEDURE TO EFFECT AN
INCREASE IN SHARES:

SUMMARY
CLAUSE

SECTION

RESOLUTION

FORMS TO
BE FILED
WITH CCM

TIME FRAME

Name
clause

23

Special
resolution

FORM 13A,
FORM 11

14 days

Object
clause

28

Special
resolution

FORM 11

Within 14
days after
the
expiration of
21-day
grace period

Limited
liability

25

Special
resolution

FORM 11

14 days

Capital
clause

62

Depend on the
articles;
ordinary or
special
resolution

FORM 11,
FORM 28

14 days

ALTERATION TO THE AOA

CONVERTING STATUS OF A
COMPANY
A company may move from one
type of company to another.
Eg : A company may be
incorporated as private company
and may change its status to a
public company and vice versa.

REASONS CONVERT FROM PRIVATE

COMPANY TO PUBLIC COMPANY

 Law & regulation applicable to a

public company is more onerous
compared to private company.
Eg: public co has to issue prospectus
when issuing shares & it has to comply
with higher standards of accounting

Convert a public co to private co may

reduce such onerous obligations.

EFFECTS OF CONVERSION OF
STATUS OF A COMPANY

PROCEDURE FOR CONVERTING FROM

UNLIMITED TO LIMITED COMPANY

Section 25 of Companies Act

1965: an unlimited company
may convert to a limited
company by a passing special
resolution

PROCEDURE FOR CONVERTING FROM

PRIVATE TO PUBLIC COMPANY

PROCEDURE FOR CONVERTING FROM

PUBLIC TO PRIVATE COMPANY

GOING PUBLIC
Process where public company becomes a listed public
company.
Private company MUST first convert to a public company
before applying for listing status.
Effect of listing:
Securities of the company are listed for quotation on a stock
market conducted by Bursa Malaysia Berhad
It provides the avenue for the securities to be freely
marketable as between investors.
Company can raise finance for its operations or for expension.

To be listed on Bursa Malaysia, company required

Securities Commisions (SC) approval, under Section
212 of Capital Market and Services Act 2007

REASONS COMPANIES GET LISTED ON

BURSA MALAYSIA

DISADVANTAGES OF GOING PUBLIC

DISADVANTAGES OF GOING PUBLIC

BURSA MALAYSIA PRE

REQUISITE FOR LISTING

SOME OF THE FACTORS TO BE CONSIDERED

WHEN GOING PUBLIC INCLUDE :

Whether the company has achieved

the requisite profit track record
Does the company have a
foreseeable good future in profit
performance
Whether the company considers
itself and its related business to have
good future prospects
Whether market condition is
favorable

PRIMARY LISTING OF LOCAL AND FOREIGN

COMPANIES (QUANTITATIVE CRITERIA)
ASPECTS
PROFIT TEST

MAIN MARKET

MARKET
CAPITALISATION TEST

ACE

Uninterrupted PAT of 3-5 full

financial years with
aggregate of at least RM20
million and
PAT of at least RM6 million
for the most recent full FY

No minimum operating
track record or profit
requirement

A total market capitalization

of at least RM500 million
upon listing, and
Incorporated and generated
operating revenue for at
least 1 full FY prior to
submission.

ASPECTS
PUBLIC SPREAD

MAIN MARKET

At least 25% of the Companys

share capital and
Minimum of 1000 public
shareholders holding not less
than 100 shares each

BUMIPUTERA
EQUITY
REQUIREMENT

Allocation of 50% of the public

spread requirement to
Bumiputera investors on best
effort basis.

SPONSORSHIP

Not applicable

ACE

At least 25% of the

Companys share
capital and
Minimum of 200 public
shareholders holding
not less than 100
shares each.
No requirement upon initial
listing.

Allocation on best effort

basis of 1.25% of their
enlarged issued and paidup share capital to
Bumiputera investors:
Within 1 year after
achieving Main Market
profit track record or
5 years after being
listed on ACE Market,
whichever is the earlier.

Engage a sponsor to
assess the suitability
for listing
Sponsors need to

ASPECTS
INFRASTRUCTU
RE PROJECT
CORPORATION
TEST

IPO PRICE

MAIN MARKET

ACE

1. Must have the right to build

and operate an
infrastructure project in or
outside Malaysia :
With project cost of not less
than RM500 million, and
For which a concession or
licence has been awarded by
a government or a state
agency, in or outside
Malaysia, with remaining
concession of licence period
at least 15 years.

Applicant with shorter remaining

concession or licence period
may be considered if the
applicant fulfils the profit
requirements under profit test.
Minimum RM0.50 each
No minimum

ASPECTS
CORE
BUSINESS

MAIN MARKET

MANAGEMENT
CONTINUITY
AND
CAPABILITY

An identifiable core
business which it has
majority ownership and
management control
Core business should not
be holding of investment
in other listed companies.

Continuity of substantially
the same management for
at least 3 full financial
years prior to submission.
For market capitalization
test, since the
commencement of
operation (if less than 3
full financial years)

ACE
Core business should
not be holding of
investment in other
listed companies.

Continuity of
substantially the same
management for at
least 3 full financial
years prior to
submission or since its
incorporation (if less
than 3 full financial
years)

ASPECTS
FINANCIAL
POSITION &
LIQUIDITY

LOCK-UP
PERIOD

MAIN MARKET
Sufficient level of working
capital for at least 12
months;
Positive cash flow from
the operating activities;
and
No accumulated losses
based on its latest audited
balance sheet as at the
date od submission.

Promoters entire
shareholdings for six (6)
months from the date of
admission.
Subsequent selling down
with conditions for
companies listed under
Infrastructure Project
Corporation test.

ACE
Sufficient level of
working capital for at
least 12 months.

Promoters entire
shareholdings for 6
months from the date
of admission,
subsequent selling
down with conditions.

ASPECTS
FINANCIAL
POSITION &
LIQUIDITY

LOCK-UP
PERIOD

MAIN MARKET
Sufficient level of working
capital for at least 12
months;
Positive cash flow from the
operating activities; and
No accumulated losses
based on its latest audited
balance sheet as at the
date od submission.

Promoters entire
shareholdings for six (6)
months from the date of
admission.
Subsequent selling down
with conditions for
companies listed under
Infrastructure Project
Corporation test.

ACE
Sufficient level of
working capital for at
least 12 months.

Promoters entire
shareholdings for 6
months from the date
of admission,
subsequent selling
down with conditions.

ASPECTS
TRANSACTION
S WITH
RELATED
PARTIES

MAIN MARKET
Must be based on terms
and conditions which are
not unfavourable to the
company.
All trade debts exceeding
the normal credit period
and all non-trade debts,
owning by the interested
persons to the company
or its subsidiary
companies must be fully
settled prior to listing.

ACE
Must be
satisfactorily
addressed before
submitting any
listing application
to the Exchange.
Sponsor must
ensure all trade
debts exceeding
normal credit
period and all nontrade debts,
owning by the
interested persons
to the company or
its subsidiary
companies must be
fully settled prior to
listing.

PRIMARY LISTING OF FOREIGN COMPANIES

(ADDITIONAL CRITERIA)

DECEMBER 2013
QUESTION 2(b)
The five (5) primary quantitative
criteria that would be considered
by the Securities Commission in
evaluating
the
companys
suitability for listing on the Main
Market of Bursa Malaysia.

ANSWERS
ASPECTS
PROFIT TEST

MAIN MARKET

MARKET
CAPITALISATION
TEST
IPO PRICE

A total market capitalization of at least RM500 million upon

listing, and
Incorporated and generated operating revenue for at least 1
full FY prior to submission.
Minimum RM0.50 each

BUMIPUTERA EQUITY
REQUIREMENT

PUBLIC SPREAD

Uninterrupted PAT of 3-5 full financial years with aggregate of

at least RM20 million and
PAT of at least RM6 million for the most recent full FY

Allocation of 50% of the public spread requirement to

Bumiputera investors on best effort basis.

At least 25% of the Companys share capital and

Minimum of 1000 public shareholders holding not less than
100 shares each

Secondary Listing of Foreign

Companies Qualitative Criteria
Listing
Board

MAIN
Approval ofMARKET
Registrati
Regulatory
on
Authorities
of FJ
Must

Secondary
Listing is
allowed on
Main Market
only

Prior approval
before the
issuing of listing
prospectus in
which it is
incorporated

Auditin
g
Standa
rds

Translation
of
documents

Standards
applied in
Msia or

Documents in
language other
than BM &
English must be
enclosed with
BM or English
translation.

registered
with ROC
under CA
1965

Valuation
of Assets

Standards
applied in
Msia or in
International
Valuation
Standards

Accounting
Standards
Standards under
Financial
Reporting Act
1997
Eg: International
Accounting
Standards Board.

Currency
Denominati
on

Multi-currency
quotation is
allowed
Applicant has to
get approval
from Controller of
Foreign
Exchange

Secondary Listing of Foreign

Companies Qualitative Criteria
Additional
Listing
Criteria
Comply with criteria:
Primary listing on
MM of foreign
stock exchange.
Comply with
listing rules of
home exchange.
Home exchange
must have
standards of
disclosure rules.

Place of

Resident

Incorporation

Directors

Equivalent standard of
laws & regulations:
Corporate
governance
Shareholders &
minority interest
protection
Regulation of takeovers & mergers
Or,
The company make
variations to its
constituent documents.

Predominantly
Malaysian-based
operations:
Majority of
directors whose
principal/only place
of residence is in
Malaysia.
Predominantly foreignbased operations:
Have at least 1
director whose
principal.

Listing of Special Purposes

Acquisition Companies
Key Listin
g Companies
MAIN
MARKET

Listing
Board
Allowed
on Main
Market
only.

IPO Price
Minimum
is RM0.50
each.

Minimum
Fund
Raised
RM 150
Million.

Management
Team
Ownership
Own in
aggregate, at
least 10% in
SPAC on the
listing date.

Lock-up
Period
Managements
team interest
from date of
listing -->
completion of
qualifying
acquisition.

Qualifying
Acquisition
Must
complete
within 36
months from
the listing
date.

Listing of Special Purposes

Acquisition Companies
Key Listing Companies
Place of
Incorporati
on
Incorporate
d in
Malaysia
under CA
1965
May be
incorporate
d in
jurisdiction
outside
Malaysia
but must
complied

Manageme
nt Team
Credibility
Have
experience,
qualification
and
competence
to:
Achieve the
SPACs
business
strategy
Performs
the

Manageme
nt of
Proceeds
Place at
least 90%
of gross
proceeds
raised in
trust
account
--> may
only be
released by
custodian
upon

Application for Procedure and

Admission Process

COMP
ANY

Initial
Listing
Applica
tion

SECURI
TIES
COMMI
SSION

M&A
Initial
Listin
g
Appli
catio
n
Form
Prosp
ectus
Prospec

App
rov
al
BURSA
MALAY
SIA

tus

CCM

Public

Shares
issued
to the
public

Shares
admitted
to Official
List

Prospectus
An applicant seeking a listing must publish in full its prospectus
and application forms in widely circulated local newspaper.
Security
Commission Act
1993
Defines
prospectus as: a notice, circular,
advertisement/document inviting applications or offers to
subscribe for or purchase securities/offering any securities for
subscription/purchase.
Section 36A (4)

Every company shall lodge.

a copy of prospectus + any supplementary prospectus + a copy of
form of application
.to CCM on or before the issuance date.

Matters in Prospectus 5th

Schedule of the Act
PART 1

Number of founders
shareholders
Number of qualification
shares
Names, descriptions &
addresses of directors
Particulars of shares
Nature of companys
business
Time of the opening of
subscription lists
Amount payable on
application & allotment
Particulars of option
Numbers & amount of
shares & debentures
issued within 2
preceding years
Particulars of property
transactions
Amount of commissions
payable
Amount of preliminary
expenses
Rights of voting at

PART 2
A report by an approved
company auditor with
respect to the profits &
losses, assets &
liabilities, & rates of
dividends for each of the
5 FYs preceding the
issue of the prospectus.
A report by directors
whether after due
inquiry by them in
relation to the interval
between the last
accounts date have
been made up & date
not later 14 days before
the issue of the
prospectus
i) The business & its
subsidiaries has in their
opinion been
satisfactorily
maintained
ii) In their opinion there
are no circumstances

PART 3
A statement to the effect
that the repayment of all
moneys is secured by a first
charge given to the trustee
for the debentures holder to
be issued in relation to the
deposit/loan over landvested corporation.
A copy of a written valuation
of the corporations interest
in the land so mortgaged
showing the nature and
extent of the corporations
interest.
In every prospectus relates
to debentures, there shall be
included:
i) Particulars of the limitations
on the amount that the
corporation may borrow
ii) A statement as to the
amount of subscription that
are being sought
iii) A statement as to whether
or not the corp reserves the