Points to consider when investing in shares in a private limited company
1. Should the investor subscribe to new shares issued by the company or acquire shares from the current shareholder(s) of the company? The stamp duty for instrument of transfer of shares is 0.3% of the price or value of the shares on the date of transfer, whichever is higher. The …
Is it your intention to be bound by the terms?
It is a common practice in certain sectors where parties enter into a short form agreement, typically a letter of offer or letter of award which requires the parties to enter into an agreement within a specified period of time. The second agreement sets out the detailed terms and conditions. …
Moratorium on pre-IPO investors’ shares for SPAC and ACE Market listing
Pre-IPO investors who invest in shares of companies seeking for listing on Bursa Malaysia should take note that their shares would be subject to moratorium in the following circumstances: 1. Moratorium on pre-IPO shares of Special Purpose Acquisition Company (“𝗦𝗣𝗔𝗖”) Pre-IPO investors are not allowed to sell, transfer or assign …
Can PLS vary a corporate proposal which has been approved by shareholders?
A client may change its mind at the last minute. Shareholders’ and regulators’ approvals are required for certain corporate proposals by a public company listed on Bursa Malaysia (“𝗣𝗟𝗖”). After all the required approvals have been obtained, the PLC may ask: “Can we do it this way instead?” Sometimes the …
Completion account clause in SPA
Points to consider when drafting completion account clause in SPA 1. How much will be paid on completion of the transaction? Typically, the parties will agree on the amount to be paid on completion based on the parties’ best estimate of the purchase price with adjustment to the purchase price …
Not all clients are the same
Not all clients are the same. The legal counsel of a corporate client thanked me for the advice I gave. I thought it was very nice of this legal counsel as I was merely doing my job i.e. providing legal advice. The matter was pretty straight forward but it went …
Transfer of shares of a Malaysian company
How do investors who want to invest in a company in Malaysia check whether the legal requirements relating to transfer of shares in the company have been complied with? The things you need to check include: 1. Whether there are any provisions in the constitution of the company or shareholders’ …
Matters requiring shareholders’ approval for PLC
Which corporate actions undertaken by public companies listed on the Main Market or ACE Market of Bursa Malaysia (“PLC”) require shareholders’ approval? A PLC is required under the Listing Requirements to obtain shareholders’ approval for, among others, the following: 1. Issuance of securities by the PLC including rights issue, bonus …
What to consider when negotiating sale and purchase of business
Today’s post is on matters to consider when negotiating M&A deals, in particular during times of uncertainty. Parties may want to consider the following: 1. Whether to include price adjustment based on agreed parameters. Price adjustment is relevant if the value of the target company at the execution of the …
Directors’ and shareholders’ powers
Ever wonder which corporate actions require board of directors’ approval and which require shareholders’ approval? This depends on the division of management powers between directors and shareholders of a company. Sources of powers The main sources which set out and divide the management powers between directors and shareholders are as …