Title: A STUDY OF COMPANY LAW IN MALAYSIA, AN ISLAMIC AND COMMON LAW COUNTRY IN COMPARISON WITH THE COMPANY
1A STUDY OF COMPANY LAW IN MALAYSIA AN ISLAMIC
AND COMMON LAW COUNTRY IN COMPARISON WITH THE
COMPANY LAW IN CHINA THE FASTEST GROWING
ECONOMY OF ASIA. Dr. (Mrs) Ashraf U. Kazi
Sophia FurtadoSchool of Business Monash
University Churchill Victoria Australia 3842.
2A STUDY OF COMPANY LAW IN MALAYSIA AN ISLAMIC
AND COMMON LAW COUNTRY IN COMPARISON WITH THE
COMPANY LAW IN CHINA THE FASTEST GROWING
ECONOMY OF ASIA.
- Malaysia is an Islamic country with a strong
economic development and established companies.
- China and Malaysia are two important countries of
Asia which have made significant contribution
towards the development of companies and the
world economy. - China has seen the economic boom and it is
considered as the fastest growing economy of
Asia.
3A STUDY OF COMPANY LAW IN MALAYSIA AN ISLAMIC
AND COMMON LAW COUNTRY IN COMPARISON WITH THE
COMPANY LAW IN CHINA THE FASTEST GROWING
ECONOMY OF ASIA.
- The Chinese legal system is based upon the civil
law.
- Malaysian legal system is greatly influenced by
common law teachings of Quran and Islamic law.
- Companies in China are regulated by the Company
Law 1993 which recognises a distinct legal
personality of a company.
4COMPANY LAW IN MALAYSIA
- Company law in Malaysia is based upon English
company law and it is also influenced by the
Australian companies law.
- Companies in Malaysia are regulated by the
Companies Act 1965 which also recognises a
distinct legal personality of a company.
5COMPANY LAW IN MALAYSIA AND IN CHINA
- The main forms of companies recognised in
Malaysia are limited company public company and
private company.
- The main forms of companies recognised in China
are limited liability companies and the joint
stock companies.
6COMPANY LAW IN MALAYSIA AND IN CHINA
- Company law in China as well as Malaysia
recognises directors duties corporate
governance insider trading protection of
shareholders interests and accountability with
varying degrees of responsibility.
7COMPANY LAW IN MALAYSIA AND IN CHINA
- The economic boom of the twenty first century has
made China the fastest growing economy in Asia.
- China is influenced by traditions and civil law
and it seeks to establish modern company system
and supports a socialist market economy.
- Company law in Malaysia is greatly influenced by
common law though Islamic law is recognised and
the teachings of Quran have major impact on
Malaysia. Malaysia seeks to maintain investor
confidence and protect market integrity.
8A STUDY OF COMPANY LAW IN MALAYSIA AN ISLAMIC
AND COMMON LAW COUNTRY IN COMPARISON WITH THE
COMPANY LAW IN CHINA THE FASTEST GROWING
ECONOMY OF ASIA.
- The aim of this research is to understand the
diverse nature of company law in two Asian
countries one from a civil law jurisdiction like
China and the other from a common law
jurisdiction influenced by Islam like
Malaysia. - It also compares and contrasts the Chinese
Company Law and the Malaysian Companies Act 1965
in order to identify a better model. Further the
research identifies the merits and demerits of
company law in China and in Malaysia.
9A STUDY OF COMPANY LAW IN MALAYSIA AN ISLAMIC
AND COMMON LAW COUNTRY IN COMPARISON WITH THE
COMPANY LAW IN CHINA THE FASTEST GROWING
ECONOMY OF ASIA.
- The research looks into the development of
company law corporate forms and the concept of
legal personality in China and in Malaysia.
- It critically analyses the duties of directors
and corporate governance in both China as well as
in Malaysia. Further the research makes a
comparative analysis of the position of
shareholders and accountability in a company in
both the countries.
10A STUDY OF COMPANY LAW IN MALAYSIA AN ISLAMIC
AND COMMON LAW COUNTRY IN COMPARISON WITH THE
COMPANY LAW IN CHINA THE FASTEST GROWING
ECONOMY OF ASIA.
- The research also looks into the effect of
insider trading in China and in Malaysia.
- Finally a comparative analysis of the Chinese
Company Law and the Malaysian Companies Act 1965
is made with a view to identify the advantages
and disadvantages and to find a better model.
11THE COMPANY LAW IN CHINA THE FASTEST GROWING
ECONOMY OF ASIA.
- Two main types of private corporation authorised
under the Chinese Company Law 1993 are
- Limited liability company and
- Joint stock company.
12A STUDY OF COMPANY LAW IN MALAYSIA
- In Malaysia main forms of corporation formed
under the Companies Act 1965 are as follows
- Limited company
- Public company and
- Private company.
13A STUDY OF COMPANY LAW IN MALAYSIA
- The Companies Act 1965 facilitates formation of
other types of companies which are as follows
- Guarantee company and
- Unlimited company
14A STUDY OF COMPANY LAW IN MALAYSIA
- The Labuan Offshore Companies Act 1990 (LOCA)
regulates offshore companies and foreign offshore
companies in Labuan.
- The Companies Act 1965 does not apply to the
companies formed under Labuan Offshore Companies
Act 1990.
15CHINESE COMPANY LAW
- The reforms in the Chinese Company Law may
be addressed as follows
- Safeguards checks and balances between the
shareholders and the board of directors need
improvement.
- Shareholders must be given a right of derivative
action wherein they may bring an action on
behalf of the company to prevent any misuse of
power by the directors. - Checks and balances between the board of
directors and the supervisory committees need
improvement
- Minority shareholders should be adequately
protected and
- Shareholders should be able to transfer their
shares freely.
16Conclusion
- Malaysia has exhibited high standards of
corporate governance and corporate discipline.
- It has strong principles of disclosure financial
reporting and insider trading.
- The Companies Act 1965 exhibits strong accounting
standards better protection of the rights of
shareholders and effective regulation of
financial reporting. - A comparative study of company law in China and
Malaysia proves that the company law in Malaysia
is a better model.
