Introduction:
In the final part of our series on the Companies (Amendment) Act 2024, we turn our attention to the third objective – Fortifying Corporate Governance and Practice. This objective aims to enhance the regulatory framework, ensuring greater accountability, transparency, and integrity within corporate Malaysia. Below, we explore the key amendments introduced to achieve this goal.
Alternative to Traditional Newspaper Publication
New Section 612A - Publication or Advertisement on SSM's Website
"612a. Where any information is required to be published or advertised in a newspaper under this Act, any person may, in lieu of publishing or advertising the information in a newspaper, publish or advertise the information on the website of the Commission in the form and manner as the Registrar may determine upon payment of the prescribed fee.”
This provision allows for the publication of required notices and documents on the SSM website as an alternative to traditional newspaper publication. This change addresses the decline in newspaper circulation and reduces advertising costs, ensuring that stakeholders can access important information more efficiently.
Maintaining Auditor Independence
New Subsections 264(4A) and (4B) - Auditor Independence
“(4a) Notwithstanding paragraph (4)(b), no partner of the firm is disqualified by reason of his spouse being an officer of the company, if such reason does not compromise the independence of the auditor and the firm of auditors.
(4b) The Registrar may issue guidelines for the purpose of determining the independence of the auditor and the firm of auditors.”
These subsections empower the Registrar to issue guidelines ensuring auditors' independence, particularly concerning situations where an auditor's spouse is employed by the company being audited. This measure addresses potential conflicts of interest and reinforces the integrity of the audit process.
Reporting Requirements for Liquidators
New Subsections 433(4D) and (4E) - Liquidator Reporting
“(4D) Any person who has been approved as a liquidator under subsection 433(4) shall, within thirty days of the approval, notify the Registrar the following particulars:
(a) personal information of the approved liquidator;
(b) approval as an approved liquidator;
(c) the firm of the approved liquidators, including partners of the firm and branches, if any; and
(d) any other particulars required by the Registrar.
(4E) If there is any change to the particulars specified in subsection (4E), the liquidator shall update the information within fourteen days from the date of such change.”
These new subsections require liquidators to report their details to the Registrar once their license has been approved. This ensures that the Registrar maintains up-to-date records of licensed liquidators, facilitating better regulatory oversight and governance.
Conclusion
The Companies (Amendment) Act 2024 marks a significant step forward in strengthening corporate governance in Malaysia. By clarifying directors' duties and liabilities, enhancing transparency in corporate reporting, maintaining auditor independence, and empowering shareholders, these amendments aim to create a more accountable and robust business environment. The Malaysian Government's commitment to fortifying corporate governance practices will undoubtedly contribute to a more transparent, ethical, and investor-friendly corporate landscape.
This concludes our comprehensive overview of the Companies (Amendment) Act 2024. Should you have any questions or require further clarification on any aspect of the Act, please do not hesitate to contact our Managing Partner, Eugene Yeong, for assistance.
Thank you for your attention, and we hope this series has provided valuable insights into the recent legislative changes impacting corporate Malaysia.
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