Allotment of Shares Capital In Malaysia

Allotment of Shares Capital In Malaysia

In Malaysia, the allotment of share capital plays a pivotal role in the establishment and growth of companies. Share capital represents the financial foundation upon which businesses raise funds and allocate ownership stakes to investors.

The process of allotment involves the issuance and distribution of shares among shareholders, facilitating investment opportunities and facilitating capital infusion.

Through a well-regulated framework overseen by the Companies Commission of Malaysia (SSM), the allocation of share capital not only enables companies to raise funds but also fosters economic development, corporate governance, and investor protection in the vibrant Malaysian business landscape.

What does it mean?

Allotment of Shares where investors invest more money in the company. By doing this, it might or might not affect the share structure of the company. All these mainly depend on the investors’ mutual agreement.

How could it affect the structure of the company?

The investors could decide on investing the same proportion of money according to the existing portion so this would not affect the structure of the company as well as the existing right of the shareholders.

But in there are new investors added in with a certain amount of money injected into the company, these action will directly changing the proportion of shares and rights of the shareholders.

How many ways of allotment of shares?

There are 2 ways you could proceed to increase the paid up capital.

A) Allotment of shares via cash considerations

  • Investors/shareholders injected cash into the company via bank in a lump sum of money to the bank.

  • Must be issued for real value in money.

  • Shares allotted must be paid in full and in cash.

  • Proof evidence of bank in slip.

B) Allotment of shares via otherwise than in cash

  • Investors/shareholders paid on behalf of the company certainly in kind for the sake of the business of the company.

  • proof of management account or other documents.

Who could assist you in the allotment of shares?

You may approach your company’s secretary, he/she will assist you in the allotment of shares in SSM.

What are the documents that will prove the allotment of shares?

After your secretary submitted to SSM, you will receive Section 51 to prove your company’s structure. And you may request Share Certification from the Secretary.

Will the allotment of shares affect the shareholders’ rights in the company?

Subject to the Constitution, a company may issue shares that rank equally with existing shares as to voting/distribution rights. Those shares shall first be offered to the holders of existing shares.

If the offer is not accepted after the expiry of the offer date specified in the notice, the Directors may dispose those shares in such a manner as the directors think is most beneficial to the company.

What are the documents involved in the allotment of shares?

You may receive Section 76, Section 78 and Section 51.

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