Lecture 2 Revision - Part 1

Going public" means a private company is converted to a public company by having its shares being offered to the public and sometimes with listing in Bursa Malaysia. Compulsory conversion happens only in 3 ways as stated under s.42(4).
Conversion will not affect the Co's identity, legal rights and obligations.
Conversion will affect the company's name - through the addition of "Sdn" to the name of a private company, and the deletion of "Sdn" from the name of a public Co.

The 2nd sentence contains inaccuracy...In a professional partnership, the clients' account must be audited.

Maximum number of members is 20. It must not have a company as its shareholder. So a subsidiary cannot be an EPC because it has the holding company as its shareholder. Its accounts must still be audited and circulated to all members.

It can only have maximum 50 members. Luke and Rey, who are joint-holders of the 20000 shares, will be counted as 1 member. Transfer of shares are restricted. Only a public-listed company is required to have a spread of public shareholders. A bank must be a public Co since banks usually invite members of the public to deposit their money with the banks.

If Jedi Sdn Bhd holds more than 50% of the shares of Star Wars Sdn Bhd, and Jumanji Bhd holds more than 50% of the shares in Jedi, Star Wars' holding Co is Jedi Bhd, and the ultimate Holding Co is Jumanji Bhd. All 3 companies are related corporations. It is not necessary that a holding Co must be a public limited Co or a subsi must be a private limited co......sometimes a holding Co can be a private ltd Co and the subsidiary can be a public ltd Co.

The correct answer is that if Jumanji Bhd holds 100% of the shares of Star Wars Sdn Bhd, Star Wars is a wholly-owned subsidiary of Jumanji. This means that Jumanji has complete control and ownership over Star Wars. Similarly, if Luke holds 100% of the shares of Star Wars Sdn Bhd as a nominee of Jumaji Bhd, Star Wars is still a wholly-owned subsidiary of Jumanji because Luke is acting on behalf of Jumanji. Additionally, if Jumanji Bhd holds 100% of the shares of Jedi Sdn Bhd, and Jedi holds 100% of the shares of Star Wars Sdn Bhd, both Jedi and Star Wars are wholly-owned subsidiaries of Jumanji. This is because Jumanji has full ownership of Jedi, which in turn has full ownership of Star Wars. Finally, if Luke holds 100% of the shares of Star Wars Sdn Bhd as a nominee of Jedi Sdn Bhd, and Jumanji Bhd holds 100% of the shares of Jedi, both Jedi and Star Wars are also wholly-owned subsidiaries of Jumanji.

Liability of Co is unlimited. Members' liability is also unlimited. It can be either a private unlimited Co or a public unlimited Co. It is rarely used for trading, usually used to hold assets as investment and divide the income from the assets among the members. E.g. a family has 6 members (father, mother, 2 daughters and 2 sons). There are 4 big warehouses that can be rented out to get income. An unlimited Co can be incorporated to hold those warehouses and to collect rentals. After payment of overheads, expenses and other taxes, the rental amounts can be divided among the 6 family members. Whatever liabilities left, members are prepared to bear in full.

It can be a Co limited by guarantee, limited by shares and an unlimited Co. It has 1 to unlimited number of shareholders. Only a public limited Co must have “Bhd” as part of its name; a public unlimited Co will not have "Bhd". Not all public Co's shares are listed on Bursa Malaysia - only for public-listed Co. An unlisted public company is a public limited company whose shares are not listed on Bursa Malaysia, or a public unlimited Co.

A professional partnership has no maximum number of partners, only a general partnership will have a limit of 20 members.
A public company needs only minimum 1 member. Sole-proprietorship & limited company need not with the purpose of profit-making.

Only public limited companies' names end with "Bhd", and only private limited companies' names end with "Sdn Bhd".....Public unliimted Co will not have "Bhd", while private unlimited Co will end with "Sendirian" only, without Bhd. Both public and private companies can have minimum of 1 share...but a public company requires minimum 2 directors. Private companies no longer need to hold AGM every year.

There can be an agreement to the contrary where retirement, death and bankruptcy of partners will not affect the partnership. A partnership's legal action is taken in the names of all partners.

If convert an unlimited Co to a limited Co, members' liability will then be limited, so this is a disadvantage to creditors.
To convert an unlimited Co to a limited Co, must pass a special resolution and lodge a notice FOR conversion with SSM.
No provision for conversion from limited Co to an unlimited Co.

Unlimited company includes both private and public unlimited companies.
A company limited by guarantee has no share capital, so no shares to be listed.
A Co limited by share can be both private and public Co. A Co limited by guarantee must be a public Co.
A non-listed public company is a public Co, but its shares are not listed on Bursa Malaysia.
Only exempt private companies need not lodge its audited financial statements with SSM. Unlimited Co must still do so because all companies except EPCs must lodge their financial statements with SSM every year.
An unlimited Co is a company, with separate legal entity and perpetual succession.
A private Co can be a Co limited by shares and an unlimited Co.

It will not be compulsorily converted to a public Co when it offers its shares to the public.
It is the CCM that will serve a notice to the Co.
It must lodge a statement in lieu of prospectus, but its shares will not be listed on Bursa Malaysia.

The 2nd sentence contains inaccuracy...In a company limited by shares, members' liability is limited to the amount unpaid on their shares, while in a company limited by guarantee, members' liability is limited to the amount they have guaranteed to pay in a liquidation.
The 3rd sentence contains inaccuracy....In a private limited company, there are restrictions on the members' freedom to transfer shares.