Following the recent Annual Dialogue 2022 conducted by Suruhanjaya Syarikat Malaysia (SSM) on 6 October 2022, SSM provided the presentation slides and Summary of Issues and Feedback for the public.
"Registration of Charges" is one of the issues that have been addressed.
Proposal:
The company secretary must be responsible for submitting the necessary documentation for the Registration of Charges and the cancellation of Registration of Charges.
Feedback:
Under section 352(1) of the Companies Act 2016, a company that creates a charge over its property or any of its undertakings to which this section applies shall lodge within thirty days from the creation of the charge, together with the prescribed fee with the Registrar for registration, a statement of particulars of the charge in the form and manner as may be determined by the Registrar.
Under section 352(8), notwithstanding subsection (1), any person interested in the charge may lodge with the Registrar the particulars of the charge before the end of the period allowed for registration.
In this regard, SSM believes that the provisions of the law are in line with commercial practices that give rights to the company or any party interested in registering the charge in a specific period. Therefore, according to section 352(1) of the Companies Act 2016, the company secretary has the authority to register the charge on behalf of the company.
Should this current practice be changed by only allowing registration to be done by the company secretary, it is feared that there is a risk that registration cannot be done within the specified period. If this happens, additional procedures need to be done by requesting an extension of time from the Court, which of course, also involves additional costs.
Therefore, SSM believes that the existing practice should be maintained to reduce the risk and cost that may arise if this practice is changed.
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