Q1. What is a company?
A company is a legal entity that is separate and distinct from its members and shareholders. When a company is formed, it is said to have become "incorporated". A company is capable of owning property, making contracts, employing people and being sued or of suing. Unlike sole proprietorships or partnerships, companies have continuity of succession, as it is unaffected by the death or incapacity of one or more of its members.
Q2. What is the principal legislation governing the formation and operation of companies in Malaysia?
The Companies Act 1965 is the principal legislation governing the formation and operation of companies in Malaysia. The Act enables an association of persons to form various types of corporate organization known as registered company. In addition to protecting the right and interests of shareholders in particular and investors in general, this Act also provides facilities for the incorporation of companies, its constitution, its relation with members and creditors, management and winding-up. The Registrar of Companies Malaysia or ROC enforces and administers the Companies Act 1965. Every company intending to carry on business in Malaysia must register with Registrar of Companies before conducting any business activity.
Q3. How do we start a company?
A company must have two directors at all times. A director must be a natural person and who must have their principal or only place of residence within Malaysia. A secretary of a company must be a natural person who has his or her principal or only place or residence in Malaysia. A secretary must be a member of a prescribed body or is licensed by the Registrar of Companies, Malaysia. You must first make an application to the Registrar of Companies to ascertain whether the intended name for your company is available. If so, three months reservation of the name is given from the date of approval. You need to submit Form 13A and a RM30 fee will be charged for each application. Within the three months reservation period, you must submit documents such as the Memorandum & Articles of Association, Form 6 and Form 48A together with the registration fee to the Registrar of Companies. The Statutory Declaration Form 48A is required of each proposed directors and subscribers of the company. A company must have at least two directors named in the Articles of Association of the company and two subscribers to the Memorandum and Articles of Association of the proposed company. In the Articles of the proposed company Form 6, at least one secretary of a company shall be named. The Registrar of Companies will issue a certificate of incorporation upon registration. A company must have a registered office in Malaysia of which all books and accounts required under the Companies Act 1965 should be kept. In the circumstances of a public limited company, the directors of a company have the responsibility to ensure that a prospectus is issued and circulated to the public and its contents are in accordance with the requirements of the Companies Act 1965.
Posted by
snowie
,
2:31 PM
When Ali and his family take meal in a restaurant, there is a contract. But when is the offer? And when is the acceptance? Also, suppose he sees this special dish 'X' on the restaurant's website. He calls and they say it should be available. So he makes a reservation. But after that they say it is out of stock. Discuss the issue above whether Ali’s reservation contract enforceable? And is his contract for the availability of X enforceable?
The elements of a contract are offer, acceptance, exchange of consideration and discussion of terms and conditions/promises. It would be hard pressed to even argue that an offer and acceptance took place. He could try to argue it is when he enter the restaurant he is offering to eat there and they are accepting his offer by seating him. However this would have policy repercussions because say for instance he decides to change his mind after seeing the menu and leave prior to ordering, he could technically be in breach of contract. The Boots Pharmacy case explores this issue and it was determined in a retail setting the offer and acceptance does not take place until the final transaction where the customer makes an offer to the cashier to purchase a product. Therefore, I would imagine the same rule would apply in the restaurant setting where money (thus consideration) is exchanged.
Now in regards to 'X' dish as there was no contract in place he could not sue for breach of contract. The representation made on the phone is not a guarantee - notice the restaurant said it "should" be available. Should do not imply something definite - as such I think they would have no liability.
Ali’s contract for the reservation is not enforceable. He offers no consideration in exchange for their service. If he paid them money in exchange for the reservation, for example, then perhaps he would have an enforceable contract in theory.
Prior to March 1996, known as the Department of Inland Revenue Malaysia which under the Ministry of Finance. Also, it became a Statutory Board on the 1st March, 1996.Generally, the Inland Revenue Board Malaysia (IRB) act as an agent to provide services in assessing, administering, collecting and enforcing the payment of income tax and other taxes that are under the board’s jurisdiction. In addition, the Inland Revenue was, until April 2005, a department of British Government responsible for the collection of direct taxation, including income tax, national insurance contributions, capital gains tax, corporation, tax, inheritance tax, estate duties, stamp duties and real property gains tax. Recently, the Inland Revenue also administered the Tax Credits schemes, such as Working Tax Credit (WTC) and Child Tax Credit (CTC), are paid by the Government into a recipient’s bank account or as part of their wages. Also the Inland Revenue was also responsible for the payment of child benefit.
Functions of the Board:
(a)To act as agent of the Government and to provide services in administering, assessing, collecting and enforcing payment of income tax, petroleum income tax, real property gains tax, estate duty, stamp duties and such other taxes as may be agreed between the Government and the Board
(b)To advice the Government on matters relating to taxation and to liaise with the appropriate Ministries and statutory bodies on such matters
(c)To participate in or outside Malaysia in respect of matters relating to taxation
(d)To perform such other functions as are conferred on the Board by any other written law
(e)May act as a collection agent for and or behalf of any body for the recovery of loans due for repayment to that body under any written law
Powers of the Board:
(a)To enter into contracts
(b)To utilise all property of the Board, movable and immovable, in such manner as the Board may think expedient including the raising of loans by mortgaging such property
(c)To engage in any activity, either alone or in conjunction with other organisations or international agencies, to promote better understanding of taxation
(d)To provide technical advice or assistance, including training facilities, to tax authorities of other countries
(e)To impose fees or charges for services rendered by the Board
(f)To grant loans to employees of the Board for any purpose specifically approved by the Board
(g)To provide recreational facilities and promote recreational activities for, and activities conducive to, the welfare of employees of the Board
(h)To provide training for employees of the Board and to award scholarships or otherwise pay for such training
(i)To do anything incidental to any of its powers
a) Formation
A contract of sale is made by an offer to buy or sell goods at a price and by the acceptance of such an offer: Section 5(1), Sales of Goods Act 1957. The contract may provide for the immediate delivery of the goods or the immediate payment of the price or both. Delivery or payment may even be by installments: Section 5(1), Sales of Goods Act 1957. Price means the money consideration for the sale of goods.
b) Formalities
A contract for the sale of goods can be made in any manner that shows agreement between the buyer and seller. A contract of sale may be made in writing or by word of mouth, or partly in writing and partly by word of mouth, or maybe implied from the conduct of the parties: Section 5(2), Sales of Goods Act 1957. There is an acceptance of goods when the buyers, either before or after delivery of the goods, expresses by words or conduct his assent to becoming the owner of those specific goods.
c Price
As seen earlier, a contract of sale is basically an offer to buy or sell goods for a price and the acceptance of such an offer. Price is the money consideration for the sale of goods. Where necessaries are sold and delivered to an infant, or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price therefore. Price may be fixed in the following manner:
1.It may be fixed by the contract.
2.It may be left to be fixed in a manner agreed in the contract.
3.It may be determined by the course of dealing between the parties.
4.Where the price is not determined in any one of the aforesaid ways, the buyers must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case: Section 9, Sale of Goods Act 1957.
d) Capacity of contract
The question of capacity to contract is regulated by the Contracts Act 1950. The legal principles and the law on contract governing capacity in ordinary contract law apply to contracts of sale. Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property.
The English rule "Nemo dat Quod non habet" is set out in the Section 27 of the Sales of Goods Act 1957 which means that if goods are bought from a person who is not the owner, and who does not sell them under the owner’s equity, the buyer does not acquire any title. This rule is to protect the right of ownership. This general rule is illustrated in the cases of Lim Chut Lai v. Zeno Ltd. and Ng Ngat Siang v. Arab-Malaysian Finance Bhd. & Anor.
However, there is six exceptions to the rule which are:
1)The operation of estoppel (section 27)
2)Sale by mercantile agent (section 27)
3)Sale by one of joint owners (section 28)
4)Sale under a voidable title (section 29)
5)Sale by a seller in possession after sale (section 30(1))
6)Sale by a buyer in possession (section 30(2))
1) The operation of estoppel
Where the owner by his conduct make it appear to the buyer that the person who sells the goods has his authority to do so and the buyer relies on that conduct, the buyer obtains a good title because the owner is precluded by his conduct from denying the seller’s authority to sell: Section 27, Sale of Goods Act 1957 and Eastern Distributers v. Goldring.
2)Sale by mercantile agent
The proviso to Section 27, Sale of Goods Act 1957 provides that where a mercantile agent is, with the consent of the owner, in possession of the goods or of document of title to the goods, any sale made by him when acting in the ordinary course of business of a mercantile agent shall be as valid as if he were expressly authorized by the owner of the goods to make the same. Examples of a mercantile agent would be a broker, or an auctioneer.
3)Sale by one of joint owners
Goods may be owned by more than one person. Section 28, Sales of Goods Act 1957 provides that if one of several joint owners of goods has the sole possession of them by permission of the co-owners, the property in the goods is transferred to any person who buys them from such joint owner in good faith and has not at the same time of the contract of sale notice that the seller has no authority to sell.
4)Sale under a voidable title
Section 29 of the Sales of Goods Act 1957 provides that where the seller of goods has obtained possession thereof under a contract voidable under Section 19 or 20 of the Contracts Act 1950, but the contract has not been rescinded at the time of the sale, the buyer acquires a good title to the goods provided he buys them in good faith and without notice of the seller’s defect of title.
5)Sale by a seller in possession after sale
Section 30(1) of the Sale of Goods Act 1957 provides that if a seller continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person to any person receiving the same in good faith and without notice of the previous sale shall have the valid.
6)Sale by a buyer in possession
Section 30(2) of the Sales of Goods Act 1957 provides that if a buyer having bought or agreed to buy goods, obtains possession of the goods or the documents of title with the consent of the seller, he can pass a good title to a subsequent buyer acting in good faith, even if under the first transaction he has not obtained a good title. This is illustrated in Newtons of Wembley Ltd. v. Williams.
This evening, while I’m reading some e-news, a new titled ‘RM324m suit over breach of contract’ snatched my attention. –NST online, 12 February 2010.
ALOR STAR: Two companies here are suing a Kuala Lumpur-based development company and a legal firm for RM324 million for alleged breach of contract.
Real Tech Entrepreneur (M) Sdn Bhd and Beta Semarak Sdn Bhd filed the suit against Sekutu Saujana (M) Sdn Bhd and the legal firm of Azhari and Sumari at the High Court Registry yesterday.
Real Tech managing director Ahmad Shahril Ariff Zainol, accompanied by Counsel Ahmad Rizal Effande Zainol, filed the suit on behalf of Real Tech and Beta Semarak.
The plaintiffs are seeking RM144 million for four million tones of granite in a coastal reclamation project and RM80 million for the electrified double-track project in Perlis.
The two companies are also seeking RM100 million in general damages, exemplary damages and costs.
The plaintiffs said they signed an agreement with Sekutu Saujana to supply granite for the projects on Jan 22, 2008, and had paid RM150, 000 as a refundable deposit to Azhari and Sumari, which acted as the stakeholder for Sekutu Saujana.
The plaintiffs claimed that Sekutu Saujana informed them that the notice of commencement to provide the materials would be given after signing the agreement.
However, after two years, Sekutu Saujana had yet to give the notice of commencement.
The plaintiffs claimed that the defendants could not give a definitive answer and the legal firm claimed it had given the deposit to Sekutu Saujana.
Based on my point of view and understanding of law of contract, the effect of an innocent party putting an end to the contract is that the innocent party must restore any benefits that he may have received from the other party- Section 65, Contracts Act 1950. If the innocent party has rendered services or had supplied goods, he may recover a reasonable sum for such services or goods rendered. If the innocent party has paid money under the contract, he may be entitled to recover the sum paid. In this case, Sekutu Saujana has to return the refundable deposit, RM150, 000 to the plaintiffs as deal in the agreement.
Posted by
snowie
,
1:20 PM
“Uberrimae fidei” is a Latin phrase meaning for utmost good faith. It is the name of a legal doctrine which governs insurance contracts. This means that all parties to an insurance contract must deal in good faith, making a full declaration of material facts in the insurance proposal. This opposites with the legal doctrine of caveat emptor (let the buyer beware), which stated in the previous post.
It is a fundamental requirement of the parties to a transaction or contractual agreement. The doctrine of utmost good faith is a minimum standard that requires both the buyer and seller in a transaction to act honestly toward each other and to not mislead or refrain from providing critical information to the other party.
In the insurance market, the doctrine of utmost good faith requires that the party seeking insurance discloses all relevant personal information. According to Invesropedia explanation, it given and example of if you are applying for a life insurance, you are required to disclose any previous health problems you may have had. Likewise, the insurance agent selling you the coverage must disclose the critical information you need to know about your contract and its terms.
Miracles always be with you
