How to Purchase Shares in a Malaysian Company
Updated on Tuesday 15th November 2016
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A way to invest in Malaysia is by purchasing shares in an already incorporated company. This would be a simpler option for investors who are not yet prepared to start their own company and meet all the registration requirements. In order to purchase shares in a Malaysian company, the businessmen should get in contact with the shareholders of a company interested in selling a part of the business’ shares. In this sense, there are several steps that should be completed by the investors, such as the due diligence procedures applicable to the respective purchase. Our team of company formation representatives in Malaysia can provide legal assistance on this matter.
Shares purchase agreement in Malaysia
Persons who are not interested in company formation in Malaysia, but want to activate as shareholders of a Malaysian company should complete a purchase agreement referring to the selling of shares, which should provide a complete framework on the respective shares.
In this case, it is important to receive assistance provided by local specialists, who are familiar with the applicable legislation in this matter. Due diligence is necessary in this situation and it refers to a complex set of factors, such as the financial, legal or taxation matters which should be taken into consideration when purchasing shares.
The agreement should also provide clear approvals of the company’s shareholders in terms of the respective transfer. It is also necessary to receive an approval from the bank with which the company collaborates. Our team of specialists in company incorporation in Malaysia may intermediate the relation with a local bank.
Since the purchase of the shares will result in a change in the company’s ownership, all parties that are involved in this process should provide their acknowledgement on the new situation.
How to transfer shares in Malaysia
The transfer of shares in Malaysia has to be completed following the provisions stated by the Companies Act, Section 103. Depending on the amount purchased, the businessmen can become minority or majority shareholders. In the situation in which he or she purchases the majority package, it will mean that the person will have the most important position in the company.
The person selling shares should provide the following information:
• company’s name;
• information on the shareholders;
• information on the purchaser;
• number of shares that are being transferred;
• the purchasing price.
Businessmen who want to find out further information on the procedure related to share purchase are invited to contact our team of company formation consultants in Malaysia for legal assistance.