Chapter 3 : Legal Aspects of Business Entities
This act of Parliament applies to all companies though types of companies are exempted from specific provisions. Definition
Under Section 2 Companies Act 2016: ‘A company incorporated under this Act or under any corresponding previous written law’
Therefore, a company for the purpose of the Companies Act 2016 means a company incorporated in Malaysia.
Effect of Incorporation
The effect of incorporation of a company is that the company is vested with a corporate personality. It means that in the eyes of law, a company is treated as a legal person. A company is a legal person by itself separate and distinct from its shareholder and directors. The incorporation of a company brings the following effects:
The company as a separate legal entity
3.3
Liability of member is limited
A company has perpetual succession
A company has contractual capacity
A company may hold property
A company may sue and be sued
THE DIFFERENCES BETWEEN SOLE-PROPRIETORSHIP, PARTNERSHIP & COMPANY Sole-Proprietorship
Structure
The owner and its business is the same entity
Formation
No need to be formed in writing
Partnership 2 or more persons carrying on business with a view of profit Can be formed orally or in writing
56
Company A company is a person separate from its members Must be formed in writing, through a Memorandum and Articles of Association.
