Malaysia’s Bankruptcy Act 1967 is the next piece of legislation in line for an overhaul. The Bankruptcy (Amendment) Bill 2016 was tabled in Parliament on 21 November 2016.
In addition to a new name (the Bankruptcy Act 1967 will be renamed the Insolvency Act 1967 once the amendments are passed), some notable key changes are:
- Threshold for commencement of bankruptcy proceedings will be raised from RM30,000 to RM50,000
- Automatic discharge of bankruptcy after 3 years where certain conditions are made. Currently, there is no automatic discharge of bankruptcy in Malaysia – a bankrupt has to apply for a discharge, and can do so only after 5 years
- No bankruptcy proceedings can be brought against a social guarantor, that is, a person who provides not-for-profit guarantees for loans, scholarships, education and research grants, hire-purchase transaction for non-business use, or housing loans for personal dwelling.
- Even for other non-social guarantors, permission from court must be obtained to commence bankruptcy proceedings and the creditor must show the Court that he has exhausted all modes of execution and enforcement to recover from the principal debtor.
- Introduction of the “voluntary arrangement”, a pre-bankruptcy rescue mechanism – the debtor can appoint a nominee, and attempt to obtain the approval of its creditors (more than 50% of the creditors, or those holding at least 75% in value) for the proposed arrangement, before he is adjudged a bankrupt.
What are the takeaways from this development?
Although it is unclear how long it will take for the amendments to be passed and the new Act to come into force, clients should nonetheless keep the proposed changes in mind in assessing their own credit evaluation and risk mitigation procedures.
CCLC Disputes and Litigation represents clients in all stages of a dispute from pre-Court negotiations, to filing an action in court and conducting the matter all the way through to trial and final judgment. We also assist in execution proceedings, and provide general advisory. Our team is ready to be of service to you.
This article is third in a series entitled A New Corporate Landscape: Key Changes under the Companies Bill 2015 that our clients should know about.
As alerted in our previous issue of The Legal Link, the Companies Bill 2015 has received Royal Assent and shall come into force next year. We continue our series setting out the key changes under the new Act, and this time round, will examine changes relating to the accountability of directors in the running of companies.
Key Change 5: Heavier penalties for directors under the Act
The new CA 2016 imposes harsher sanctions for directors who breach the Act. The RM30,000 fine under the present Companies Act 1965 has been raised to a whopping RM3,000,000.00. Hence, directors found guilty of breaches constituting serious offences, may find themselves facing a five year term of imprisonment, a fine of RM 3,000,000.00 or even both without the possibility of compound (the CA 2016 has taken away the power of the Registrar to compound offences). Continue reading “No hiding in the shadows: Increased director’s accountability under Companies Act 2016”
Liew Siew Pen provides a brief roundup of the 2017 Budget features affecting the housing industry
Malaysia Budget 2017 has successfully been tabled by the Prime Minister Datuk Seri Najib Tun Razak. For the housing industry, there are several innovative measures, including the “step-up” end financing scheme and exemption of stamp duty, which will be implemented as part of the initiatives to promote home ownership. Stamp duty on instruments of transfer for properties costing RM1,000,000.00 and above will also be increased from the current rate of 3% to 4% in curbing speculative buying.
The key elements of the Budget affecting the housing industry are summarised below:
Continue reading “The 2017 Budget and the Housing Industry”
Mira Syahida explains the difference between a hire purchase transaction and credit sale transaction
Credit sale in general is defined as purchases made by a consumer that do not require a payment made in full at the time of purchase.
In Malaysia, credit sale is governed under Consumer Protection (Credit Sale) Regulations 2012 which came into operation on 1st October 2012. These Regulations apply to all types of businesses that are required to be registered under any laws relating to the registration of companies or businesses except co-operative societies registered under the Co-operative Societies Act 1993. The most common credit sale in Malaysia involves the purchase of home appliances, furniture and electrical items with seller or credit facility provider such as Courts, Singer and AEON.
According to the Regulations, the term “credit sale” means the sale of goods where –
(a) credit facilities are provided by the seller or the credit facility provider to the purchaser in the sale transactions of such goods;
(b) the purchaser is a consumer;
(c) the goods involved in the credit sales are as interpreted in the Act;
(d) the credit payment involves payment by installment;
but does not include sales where full payment is made via credit card.
Continue reading “Credit Sale vs Hire Purchase: A Comparison”
In this two part series, Liew Siew Pen explains the legal framework and procedures governing compulsory land acquisition
The law of land acquisition is principally concerned with the rules governing the procedures to be followed in acquiring the land by compulsory means and with the awarding of compensation to the dispossessed landowner.
The rights of a property owner in Malaysia are governed by the following legislations:-
1) The Federal Constitution;
2) The National Land Code 1965 /Land Ordinance (Sabah Cap 68) 1950/Sarawak Land Code (Cap.81) 1958;
3) The Land Acquisition Act 1960/Land Acquisition Ordinance (Sabah Cap. 69) 1950/Part IV of the Sarawak Land Code (Cap.81) 1958.
Under Article 13 of the Federal Constitution, the nature and extent of property rights of a person are as follows:
(1) No person shall be deprived of property save in accordance with law.
(2) No law shall provide for compulsory acquisition or use of property without adequate compensation.
The above provisions ensure that a person is not deprived of his property without adequate compensation being made.
Continue reading “Land Acquisition – Balancing the needs of two parties”
This article is second in a series entitled A New Corporate Landscape: Key Changes under the Companies Bill 2015 that our clients should know about.
Since our first article in this A New Corporate Landscape series, the Companies Bill 2015 has received royal assent and has been gazetted as the Companies Act 2016 (from hereon and the rest of the series, the new Act will be referred to as “CA 2016”).
Once the CA 2016 comes into force, it will bring substantial changes to the manner in which a company is run, or corporate decisions made. Particularly, key changes are brought to the area of meetings and written resolutions. Continue reading “An Easier Meeting of Minds: Meetings/ Resolutions under the Companies Act 2016”
As alerted in the last issue of The Legal Link, the Securities Commission (SC) had in August 2016 launched the revised Malaysian Code on Takeover and Mergers 2016 (“revised Takeover Code”), together with the accompanying Rules on Takeovers, Mergers and Compulsory Acquisition 2016 (“new Takeover Rules”). The revised Takeover Code sets out 12 general principles applicable to takeovers in Malaysia whilst the new Takeover Rules set out in detail the procedures and requirements to be followed.
Below, we have picked out 5 main highlights of the revised takeover and mergers framework, to bring to your attention: Continue reading “A New Take: 5 main highlights of the revised Takeover and Mergers Code and Rules 2016”
Janice Gan provides an overview of the implications for housing developers from the recent amendments to the Housing Development (Control & Licensing) Act 1966
The Housing Development (Control & Licensing) Act 1966 (“HDA”) is an Act to provide for the control and licensing of housing development in Peninsular Malaysia as well as protecting the interest of purchasers of residential property still under construction. Continue reading “More Strings Attached: Housing Development (Control & Licensing) (Amendment) Act 2012”
If the person who owes you money is not responding or you are unaware of their whereabouts, all hope need not be lost. We set out below the steps that you can take in such a situation.
In the course of your business, you may come across the predicament where you are owed money from debtors whom you have not been able to contact or are unresponsive, or whose whereabouts are now unknown. What should be your course of action in such a situation? Continue reading “The Case of the Missing Debtor: Recovering against a missing/ unresponsive debtor”
This article is first in a series entitled A New Corporate Landscape: Key Changes under the Companies Bill 2015 that our clients should know about.
Background to the Companies Bill 2015
CCLC’s clients have no doubt seen the headlines and heard much spoken of the impending changes under the Companies Bill 2015. The Bill has been passed by both houses of parliament and it is only a matter of time before it comes into force on a date to be notified in the Gazette.
The Companies Bill 2015 intends to reform the Malaysian corporate legal framework by replacing the outdated Companies Act 1965. Amongst the key aims of the Bill are to increase the ease of doing business, and to increase legal and corporate governance. Continue reading “Clear(er) Roads Ahead: Incorporation of companies under the Companies Act 2016”