KUALA LUMPUR: The Corporate Law Reform Committee (CLRC) has recommended that two “archaic concepts” in relation to share capital — authorised share capital and par value — be abandoned.
The proposals are among 188 final recommendations made by the CLRC under the Companies Commission of Malaysia’s (CCM) corporate law reform programme, which began in December 2003.
CLRC recommends that shares of all companies should no longer have a par value attached to them, and a company limited by shares is no longer required to state its authorised share capital in its memorandum.
Under a no par value (NPV) regime, companies would not have to maintain a share premium account and could elect to capitalise their profits without any issue of new shares, to capitalise their profits coupled with the issue of new shares to shareholders, or to consolidate and subdivide the NPV shares.
Read more here.
1 comment:
i wonder if it is really a good case to abandon the par value regime. i know many countries are doing without it.
after all, par value affects the voting rights. would a later subscriber pay more monies because the value of the company has increased be then entitled to a larger block of vote? it would seem that way...
afterall if all the monies are kept in share premium account and later capitalised would be distributed fairly...
need to assess it before commenting further...:p
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