What agreements are required for investment into a company?
When determining what agreements are required for investment into a company, consider the following: 1. What is the mode of investment? For example, is the investment by way of acquisition or subscription of shares of the company? 2. What is the subject matter and purpose of the agreement? 3. Who …
Lawyering: Being technically good is just the first step
Being good in the technical aspect of law is just the first step in practising law. There is so much more that goes into practising law in the private practice. Consider the following: 1. Having a template or precedent (even a good one) would not help much if you do …
Subscribing or acquiring shares: check the pre-emptive rights first
An investor who wants to subscribe to shares or acquire shares in a private company should first consider whether there are any restrictions to do so in the following documents: 1. Constitution of the company (if the company has adopted a constitution); and 2. Shareholders agreement (if the current shareholders …
Dividend of a Malaysian company: What directors and shareholders should know
1. It is permissible to use preference shares as an instrument to give investors (i.e. preference shareholders) priority to receive payment of dividend over ordinary shareholders. This preferential right must be stated in the constitution of the company. 2. A company may only distribute dividend to the shareholders out of …
What I do as a corporate lawyer
Part of my job as a corporate lawyer is to listen when clients explain the commercial terms that they want to include in agreements. The next stage involves asking detailed questions to clarify how the commercial terms should work in the actual world (and not just in theory). Sometimes the …
How I delegate effectively
One of the challenges that I face as I progress through my career is how to delegate effectively. Sometimes, it is easier to draft than to review others’ drafts. Putting my own thoughts into words may be easier than reviewing others’ work and trying to understand their flow of thoughts. …
IPO is like an open book exam
Me: “IPO is like an open book exam. You can see from the prospectuses the kind of issues typically encountered by companies going for listing.” My learned friend: “Yeah, but it is a 300 to 400+ pages of open book exam.” While not every IPO is the same, the following …
Terms of preference shares
When drafting the terms and conditions of preference shares, you may want to consider the following: 1. Number of preference shares to be issued 2. Issuance price 3. Dividend • Rate of dividend • Whether dividend is cumulative • Time for dividend payment 4. Tenure of preference shares Whether the …
Voting rights of non-voting shares (preference shares)
Under the Companies Act 2016, “preference share” means a share by whatever name called, 𝒘𝒉𝒊𝒄𝒉 𝒅𝒐𝒆𝒔 𝒏𝒐𝒕 𝒆𝒏𝒕𝒊𝒕𝒍𝒆 𝒕𝒉𝒆 𝒉𝒐𝒍𝒅𝒆𝒓 𝒕𝒐 𝒕𝒉𝒆 𝒓𝒊𝒈𝒉𝒕 𝒕𝒐 𝒗𝒐𝒕𝒆 𝒐𝒏 𝒂 𝒓𝒆𝒔𝒐𝒍𝒖𝒕𝒊𝒐𝒏 or to any right to participate beyond a specified amount in any distribution whether by way of dividend, or on redemption, in …
Three things you may miss out in legal due diligence
1. Boilerplate clauses in agreements are usually not controversial. Nothing that makes your eyes widen in surprise or your heart skips a beat. Notice provisions with the header “NOTICE” towards the end of agreements usually set out the mode of serving notice, the timeline by which notice is deemed to …