Category: Share Registry

IPO Application: A Guide to Listing Your Company in Malaysia

IPO Application_ A Guide to Listing Your Company in Malaysia

IPO Application: A Guide to Listing Your Company in Malaysia

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An Initial Public Offering (IPO) marks a significant milestone in a company’s journey, allowing it to transition from private ownership to a publicly traded entity. Malaysia stands out as a compelling listing destination for companies considering an IPO. With a robust regulatory framework, diverse investor community, and vibrant capital market ecosystem, Malaysia offers a conducive environment for companies to unlock their growth potential and thrive in the competitive business landscape.

Benefits of Getting Publicly Listed

Getting your company listed on an exchange provides many benefits, some of which are:

Access to capital
By getting listed, a company can tap into a broader pool of investors in the capital market, enabling it to raise funds for company expansion, research, development, or other strategic initiatives.
Facilitate growth
Listing can provide a pathway for mergers and acquisitions, offering the company access to potential partners or targets for strategic growth and consolidation in the market.
Enhance credibility
Being listed means the company will be imposed with regulatory and reporting requirements by the stock exchange. This in turn foster transparency and good governance practices, which can enhance the company’s reputation and credibility among stakeholders.
Greater visibility and branding
Listing on a stock exchange can significantly increase a company’s visibility, boosting its brand recognition and awareness, and potentially attracting new customers, partners, and opportunities.
Incentive for employees
As a listed company, the business can offer stock options or other equity incentives tied to the company’s performance to align the interests of employees with the company’s long-term success. Employee stock ownership plan (ESOP) is a powerful tool to attract and retain talent. It can also motivate employees to contribute to its growth and profitability due to employees’ ownership in the company.
Liquidity of shares
Listing provides liquidity to existing shareholders by creating a platform where they can easily buy or sell shares, thereby widening the investor base and potentially increasing demand for the company’s stock.

Eligibility and Requirements

When it comes to IPO application and listing your company on Bursa Malaysia, there are a few things to consider:

  1. Listing Boards: Bursa Malaysia offers different boards where companies can list their shares. These include the Main Market for the listing of established companies, ACE Market which is a sponsor-driven alternative market for companies with growth prospects, and LEAP Market which is an advisor-driven market for high-growth potential companies to raise capital and access funding from sophisticated investors.. Each board has its own set of rules and requirements.
  2. Criteria: Companies must meet certain criteria to be eligible for IPO application and listing. This includes showing profitability, having a good track record, and meeting corporate governance standards such as having independent directors.
  3. Minimum Share Capital: There are also requirements for the minimum amount of share capital that a company must have for it to be listed on the exchange.

Understanding these eligibility criteria and requirements is essential for companies considering an IPO in Malaysia.

IPO application

The Listing Process

Embarking on the journey of IPO application and listing your company on Bursa Malaysia involves several important steps.

Overview of the Steps

It begins with initial planning and preparation, where the company evaluates its readiness for going public. This is followed by the submission of the IPO application to the exchange, due diligence processes, prospectus development, and eventually, listing day.

Importance of Professional Advisors

Seeking guidance from professional advisors such as investment banks and solicitors is crucial throughout the IPO application process. These experts provide valuable insights, assist in navigating regulatory requirements, and ensure compliance with listing rules.

Key Milestones During the IPO Application Process

Due Diligence Process
Companies undergo a thorough examination of their financial, legal, and operational aspects during the IPO application process to ensure transparency and mitigate risks. The company’s management team plays a key role in the due diligence process in providing accurate and comprehensive information about the company’s business, operations, financials, legal matters, and other relevant areas to the underwriters, investment banks and external advisors such as the legal and accounting firms.
Prospectus Development and Approval
The prospectus, containing comprehensive information about the company and the IPO, is prepared and submitted for approval by regulatory authorities.
Marketing and Investor Roadshows
Companies engage in marketing activities and roadshows to generate interest among potential investors, showcasing their business prospects and investment opportunities. This is typically managed by the invetsment banks or underwriter. In some cases, companies may engage external public relations or investor relations firms to assist with marketing efforts and investor communications during the IPO process.
Pricing and Allocation of Shares
Determining the offer price and allocating shares to investors are critical steps in the IPO process, balancing the company’s valuation with market demand. An experienced share registrar ensures that accurate records of these shareholders are maintained, including contact information and the number of shares held. In the distribution of shares to investors, the registrar also ensures that shares are allocated correctly according to the IPO offering terms and that investors receive the appropriate documentation confirming their ownership.
By understanding and effectively navigating through these key milestones, companies can successfully execute their IPO application and achieve their growth objectives.
Pricing and Allocation of Shares

Costs and Considerations When Applying For an IPO

Before proceeding with an IPO in Malaysia, it’s essential to consider the following:

Expected Fees for IPO Application

Companies should anticipate various fees associated with the IPO application process, including advisory fees for professionals such as investment banks and solicitors, underwriting fees if the company uses the services of an underwriter to facilitate and manage the IPO, as well as expenses related to regulatory filings and compliance.

Timeline of the IPO Process

Understanding the timeline for a typical IPO in Malaysia is crucial for effective planning. While timelines may vary depending on various factors, including regulatory approvals and market conditions, companies should expect the process to take several months from initial planning to listing day.

Additional Considerations

Tax Implications
Companies need to assess the tax implications of going public, including potential capital gains taxes and other applicable taxes during the IPO application process. Seeking advice from tax professionals is advisable to ensure compliance with tax laws and optimise tax efficiency.
Post-Listing Compliance Requirements
After listing, companies are subject to ongoing compliance requirements imposed by regulatory authorities and stock exchange rules. This includes financial reporting obligations, disclosure requirements, and adherence to corporate governance standards. Being prepared to fulfil these obligations is essential for maintaining regulatory compliance and sustaining investor confidence.

By considering these costs and additional factors upfront, companies can better navigate the IPO application process in Malaysia and position themselves for a successful transition to the public market.

Tips on Your IPO Application Process

Listing your company on Bursa Malaysia offers numerous advantages:

  • Benefits of Listing: It provides access to capital for growth, enhances visibility and credibility, and creates opportunities for expansion and strategic partnerships.
  • Importance of Careful Planning: Successful IPOs require thorough planning and preparation. Companies must assess their readiness, adhere to regulatory requirements, and engage professional advisors to navigate the complexities of the process.
  • Professional Guidance: Seeking guidance from experienced professionals, including investment banks and legal advisors, is crucial for a smooth and successful IPO
  • Alternative Fundraising Options: For companies not yet ready for an IPO, there are alternative fundraising options to consider. These may include private equity investments, venture capital funding, or debt financing. Each option offers its own benefits and considerations, providing companies with flexibility in their capital-raising strategies.

By weighing the benefits, planning meticulously, and seeking professional support, companies can leverage the opportunities presented by listing on Bursa Malaysia to fuel their growth and achieve long-term success in the dynamic business landscape.

    IPO Application Process

    BoardRoom's Expert IPO Application Services

    When it comes to navigating the intricate process of IPO application in Malaysia, BoardRoom emerges as a trusted partner. With more than 50 years of experience and expertise in corporate services, BoardRoom offers comprehensive support and guidance tailored to meet the unique needs of companies venturing into the IPO landscape. From ensuring regulatory compliance to facilitating due diligence and prospectus development, our team of seasoned professionals is dedicated to orchestrating a seamless IPO journey.

    As a full-suite share registry provider, we also provide services such as corporate action services, share registry maintenance and coordination, AGM meeting and scrutineering services , corporate secretarial and corporate governance advisory services.

    Contact us today to help your business navigate the complexities of the IPO application process and increase the chance of successfully listing on Bursa Malaysia.

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    An Introduction to AGMs in Malaysia

    An Introduction to AGMs in Malaysia

    An Introduction to AGMs in Malaysia

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    The Annual General Meeting (AGM) is an annual meeting where a company’s shareholders and board of directors come together. It plays an important part in facilitating effective corporate governance in Malaysia, acting as a crucial forum for direct dialogue between shareholders and the management team. With AGMs, companies can enable transparent decision-making and strategic direction setting and solidify investor confidence. In this guide, we explore the regulatory requirements, preparation processes, best practices for conducting AGMs in Malaysia, and how to ensure compliance and foster stakeholder engagement.

    Overview of Corporate Governance in Malaysia

    The Malaysian Companies Act 2016, which establishes basic requirements for company formation and permits businesses to specify their control structure in their Memorandum and Articles of Association, defines the corporate governance framework in Malaysia. The Companies Act ensures that local businesses operate within a framework that serves the best interests of all stakeholders by emphasising transparency, accountability, and the protection of stakeholders’ rights.

    Regulatory requirements for AGMs in Malaysia

    The Companies Act 2016 lays the foundation for conducting AGMs. It emphasises transparency, accountability, and shareholder engagement; it ensures companies in Malaysia operate in a manner that is not only compliant but also ethically sound and reflective of stakeholders’ best interests. This backdrop supports a business environment where informed decision-making and strategic foresight are not just encouraged but required.

    Businesses in Malaysia must conduct AGMs within six months after the end of their fiscal year according to the Companies Act. These meetings must take place in Malaysia and can be in physical, virtual, or hybrid modes. The regulation sets quorum requirements, which require at least two members to be present, as well as a minimum 21-day notice period for all participants, while a 28-day notice period is advised to enhance corporate governance.

    Key Agenda Items of AGMs

    AGMs support open communication between a company’s board, management, and shareholders, as well as accountability inside the organisation. Their crucial significance in the field of corporate governance is highlighted by a number of functions and responsibilities.

    Election of Directors
    Electing or re-electing members of the company’s board of directors is one of the primary functions of an AGM. This ensures shareholders’ interests are accurately represented by the board.
    Appointment of Auditors
    AGMs include the appointment of auditors for the coming fiscal year so the company’s financial dealings can be transparently and independently verified, maintaining trust among stakeholders.
    Approval of Financial Statements and Annual Reports
    The company’s annual reports and financial statements are delivered to the shareholders for approval. This gives shareholders a comprehensive view of the company’s financial performance and health while reaffirming the company’s commitment to transparency.
    Approval of Financial Statements and Annual Reports

    Preparing for an AGM

    Before holding an AGM, a company must go through a thorough preparation process, and it usually includes the following steps:

    Agenda Setting

    The board of directors sets a detailed agenda for the AGM with input from the company secretary, covering points such as financial reporting, dividends and election of directors.

    Regulatory Compliance

    The company secretary then ensures the AGM’s compliance with the Companies Act 2016 and relevant securities regulations in Malaysia, and verifies all necessary documents.

    Communication with Shareholders

    The company secretary drafts and sends out AGM notices, which include the date, time, location and agenda, with a minimum 21-day notice period for shareholder preparation.

    Proxy Voting Process

    Shareholders are given instructions on how to appoint a proxy who can vote on their behalf in case of their absence. The company secretary collects and verifies all the proxy forms.

    Enhancing Shareholder Communication

    Several efforts are made to enhance shareholder communication leading up to the meeting, including Q&A forums, dedicated hotlines, or information sessions.

    Conducting an AGM

    Once the preparation stage is completed, the Annual General Meeting (AGM) will be conducted in compliance with a set of formal procedures and protocols, which include:

    Meeting Procedures and Protocols

    The AGM begins with the chairperson opening the meeting, followed by a roll call to establish the presence of a quorum. The meeting agenda guides the discussion of each item in turn.

    Quorum Requirements

    A minimum of two shareholders, either in person or by proxy, constitutes a quorum for an AGM unless the company’s constitution states otherwise.

    Presentation of Reports and Resolutions

    Documents such as the directors’ report and the annual financial report are given to the shareholders. These reports offer a thorough summary of the business’s accomplishments and financial status over the last 12 months. Resolutions are put forward to shareholders for voting after the presentations. These may include the appointment of auditors, the reelection of directors, and the approval of the financial statements.

    Shareholder Rights and Participation

    Shareholder participation is a key element in any AGM in Malaysia, as it enables stakeholders to have a meaningful impact on the company’s operation and development.

    Their participation usually includes the following activities and rights:

    Voting Procedures

    Voting allows shareholders to exercise their rights and influence the company’s decisions. Shareholders can vote in person or via proxy for each resolution. This could be done via a show of hands or electronic voting.

    Resolutions

    Resolutions are formal decisions that shareholders vote on during the AGM, which can include the approval of financial statements, election or re-election of board members, mergers, acquisitions, or changes in the company’s constitution.

    Q&A Sessions

    These sessions enable shareholders and the company’s board of directors to communicate directly. In particular, shareholders can raise questions, seek clarifications, and express concerns regarding the company’s operations, financial health and strategies.

    Recent Developments and Best Practices

    In recent years, there have been numerous changes to AGMs in Malaysia. The majority of these have been propelled by simultaneous worldwide developments in technology and increased awareness of Environmental, Social, and Governance (ESG) principles.

    Virtual and Hybrid Meetings

    The adoption of digital formats for has increased significantly around the world, including Malaysia. Even with physical meetings making a comeback in 2023, virtual meetings accounted for 58% of all meetings in Malaysia.

    ESG Prioritisation

    ESG topics have gained prominence in corporate governance. Shareholders increasingly demand transparency and action on issues such as climate change and sustainable business practices through resolutions at AGMs. Bursa Malaysia has also introduced the new enhanced Sustainability Reporting Framework, aimed at facilitating businesses in embracing global standards for disclosing ESG-related information. By strengthening your ESG compliance, companies can help attract investment, improve your corporate reputation and minimise your risk of penalties for non-compliance.

    Best Practice Guide

    Bursa Malaysia has released the Best Practice Guides on AGMs, which provide a thorough framework for navigating the changing environment. These principles assist businesses in adopting international best practices, ensuring regulatory compliance, and organising productive meetings. They address useful issues, including how to improve shareholder involvement, how to employ technology for distant voting, and how to enable open dialogue about ESG issues.

    Environmental, Social, and Governance (ESG) principles

    Challenges and Mitigation Measures

    Companies conducting AGMs often encounter several challenges, including securing widespread shareholder engagement and navigating the logistical intricacies of hybrid meeting formats. To tackle these issues, companies in Malaysia are advised to implement different measures for each area.

    Enhancing Shareholder Engagement
    Companies can leverage technology to make AGMs more accessible, such as digital tools, live streaming, e-voting and interactive Q&A sessions in order to increase shareholder engagement. Companies can also facilitate clear communication by providing agendas and instructions for digital participation in the pre-meeting materials. Last, but not least, mechanisms can be put in place for shareholder feedback so that the AGM procedures can be improved.
    Managing Hybrid Meeting Complexities
    To manage hybrid meetings more effectively, companies should select a reliable platform that enables both virtual and physical participation. The meeting services provider should provide technical support and conduct rehearsals to ensure a smooth AGM execution.
    Ensuring Regulatory Compliance
    To guarantee adherence to rules, companies need to stay informed about the instructions issued by Bursa Malaysia and the Companies Commission of Malaysia (SSM). If there is a need, companies should obtain expert advice from professional corporate secretarial services providers like BoardRoom to ensure that you comply with regulations related to AGMs in Malaysia.

    How Can BoardRoom Offer Support for Your AGM in Malaysia?

    BoardRoom offers comprehensive share registry services, managing more than 350 AGMs and meetings every year in Malaysia. With a strong focus on enhancing engagement, streamlining proceedings, and ensuring regulatory requirements are met, BoardRoom empowers businesses in your AGM preparation.

    Contact us today to discuss your AGM needs and make your next AGM a seamless experience.

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    How full suite share registry services help with AGM preparation

    How full suite share registry services help with AGM preparation

    How full suite share registry services help with AGM preparation

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    Annual general meetings (AGMs) play a pivotal role in shaping the future of public companies by encouraging informed decision-making and strategic planning. These crucial gatherings bring together key stakeholders, including board members and shareholders, to collectively steer the company’s direction. They can help your company build shareholder confidence and maintain a competitive advantage.

    In addition to traditional share registrar duties, a full suite share registry services provider can offer support for various types of meetings such as AGMs, extraordinary general meetings, and special general meetings, provide companies with secure processes to protect clients’ data while also offering a wide range of polling solutions and assistance for companies navigating the complexities of IPO listings. In this article, we focus on how full suite share registry service providers can empower businesses to prepare their board members for AGMs, with the view to facilitate meaningful shareholder engagement and promote strong compliance with local regulations.

    Understanding annual general meetings

    AGMs hold a critical place on the corporate calendar. They provide a platform for stakeholders to convene, deliberate and make decisions that shape the future trajectory of a company.

    Per the Malaysian Companies Act, public companies must adhere to local AGM regulations regarding the following:

      Timing
      AGMs must be held once every calendar year, within six months of the company’s financial year-end and no more than 15 months from the last AGM.
      Location
      Companies incorporated in Malaysia must hold their AGM in Malaysia, regardless of whether the meeting mode is physical, virtual or hybrid.
      Quorum
      Unless the company has only one member, at least two people must be present at the AGM. Proxy attendance is permitted.
      Notice period
      Attendees must have at least 21 days written notice of the AGM date, but a 28-day notice period is advised for good corporate governance.

      In the lead-up to an AGM, the company secretary plays a pivotal role in preparing for regulatory compliance, precise documentation, and smooth communication, all essential for a successful shareholder assembly. However, AGM attendance rules and their adherence are the responsibility of the chair.

      Poor compliance can have serious consequences for your business. Disordered or legally invalid meetings can lead to shareholder complaints, fines and reputational harm, and recovering can take significant time and resources. Meanwhile, compliant AGMs that encourage open, orderly discussion will help to foster stakeholder confidence and bolster your corporate reputation.

      It is not unusual to feel daunted at the prospect of ensuring all your AGM obligations are satisfied, especially when requirements and standards vary for physical, virtual and hybrid formats. As a solution, many businesses engage professional full suite share registry service providers for personalised assistance with running productive, efficient and compliant AGMs.

      Preparing board members for AGM attendance

      Mandatory participation in the company’s AGM stands as a responsibility of board membership. AGMs play a crucial role in demonstrating your company’s commitment to transparency and accountability. Well prepared board members ensure a well run AGM that will leave a positive impression on shareholders and enable businesses to spend more time on strategic planning and less on administrative work. Your company can prepare for a successful AGM by:

      • understanding the company’s regulatory obligations for running a physical, virtual or hybrid meeting;
      • reading meeting materials thoroughly at least one week prior to the meeting and asking clarifying questions ahead of the meeting;
      • providing sufficient notice to shareholders of the date, time and location of the meeting;
      • sending clear instructions to shareholders explaining how they can attend the meeting, access relevant documents and participate in discussions and polls;
      • providing detailed information to shareholders about matters for discussion;
      • ensuring shareholders will have the opportunity to ask questions at the meeting and vote on important matters relating to the company’s governance;
      • anticipating shareholder questions in advance and formulating helpful answers (without divulging sensitive information such as trade secrets); and
      • preparing a shareholder presentation before the AGM to highlight company milestones, achievements and financial highlights.

      Preparing an AGM can be a complex, time-consuming process. Partnering with an experienced full suite provider that offers share registry, meeting and corporate secretary services can reduce the burden on your company during the planning stage and further minimise your risk of non-compliance.

      Preparing board members for AGM attendance

      Mitigating technology risks in AGMs

      As AGMs evolve to accommodate diverse formats, technology has emerged as both an enabler and a potential hurdle. According to Alex Chew, Director of Share Registry Services for BoardRoom Malaysia, the technology risks of AGMs vary depending on the meeting mode selected.

      “If it’s a virtual meeting, then connectivity is a key risk, especially as it has a third-party element,” he says. “Ensuring a good connection as the meeting organiser is only half of the success – for best experience, remote participants at home or in the office need to ensure good, stable, and unfiltered internet connection besides having a good working device.”

      In physical meetings, power outages and hardware failure (e.g. audiovisual equipment and electronic voting systems) can also cause problems.

      Businesses can effectively mitigate technology risks and ensure meeting continuation by implementing thorough contingency plans.

      “For virtual and hybrid meetings, we take steps to ensure a dedicated connection and backups are in place, and we also educate remote participants on how to achieve a good connection,” Alex says. “In physical meetings, we always prepare backup hardware equipment to ensure service continuation and minimise any disruption risk.”

      Mitigating technology risks in AGMs

      Engaging advanced share registry services in Malaysia

      In Malaysia, where digital technology is rapidly advancing and regulations are becoming more complex, businesses must embrace innovation to keep up with AGM trends. Thus, selecting a meeting services provider specialising in powerful, secure, easy-to-use digital meeting technology is important.

      “At BoardRoom, we partner with a reputable meeting platform Lumi Global, which is a certified system that supports all types of meetings,” Alex says. “The system is designed to manage all aspects of security risk.”

      Expert full suite providers like BoardRoom, powered by premium general meetings platforms, like Lumi Global provide a variety of features that empower you to:

      • implement AGM best practices and strategies to enhance engagement, streamline proceedings and promote transparency; and
      • satisfy regulatory requirements with ease (e.g. live voting and Q&A).

      For example, a popular time-saving strategy in virtual and hybrid meetings is to designate moderators or team members who can monitor the live chat and help answer repeat questions.

      “This means your Chairman won’t need to deal with the same questions over and over again, which can help to cut meeting times,” Alex explains.

      Another smart strategy is inviting shareholders to submit questions before the AGM, allowing the board to group similar themes and prepare insightful answers in advance.

      Comprehensive AGM support

      Comprehensive AGM support

      Planning and executing smooth and strategic AGMs can be a complicated task. By ensuring your board members are well-prepared and engaging the support of full suite share registry experts, you can ensure every meeting provides real value to shareholders and achieves strong compliance.

      BoardRoom leads the way for quality full suite share registry services in Malaysia, managing upwards of 350 AGMs and general meetings every year for a diverse range of clients. Our wealth of experience, deep knowledge of local regulations and high-level technological expertise make us the provider of choice for AGM support.

      According to Alex, many clients choose to partner with BoardRoom due to the unrivalled flexibility of our service.

      “Our tailored services have the agility to meet your unique business requirements as they evolve,” he says. “Lumi Global has the agility to accommodate various meeting modes and can be adapted to align with your company constitution.”

      BoardRoom also provides complementary company secretarial services as part of our suite of corporate services, making it quick and easy for clients to access quality support across business functions. Whether you’re a small startup or a sprawling multinational corporation, our qualified business specialists work together to help your business achieve its goals and thrive within Malaysia and beyond.

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      SG-MY-Lumi Meeting Services : Optimising Hybrid AGMs

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      SG-MY-Lumi Meeting Services : Optimising Hybrid AGMs

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      In our recent webinar, ‘2023 AGMs and EGMS – What Have We Learned’, more than 50% of respondents identified cost as a major concern when considering hybrid meetings. Many believe that hosting hybrid meetings costs twice as much due to the need for physical venues and remote setup. While rising costs and logistical expenses pose challenges, they also create opportunities for creative solutions.

      One strategy is downsizing venues, prioritising quality over quantity. The key is to strike a balance between limited physical attendance and remote participation.

      Here are our tips on how you can maximise cost efficiency and engagement in your hybrid meetings.

      Download Resource

      Connect with our Meeting Services team today to discuss on how you can promote a dynamic and inclusive meeting environment that serves all stakeholders.

      Contact BoardRoom for more information:

      Richard Lee

      Share Registry Services, Sales Director, BoardRoom Malaysia

      E: [email protected]

      T: +60 3 7890 4700

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      Choosing between a physical or virtual AGM meeting: what works best for you?

      Choosing between a physical or virtual meeting_ what works best for you Banner

      Choosing between a physical or virtual AGM meeting: what works best for you?

      boardroomsuperadmin

      With recent changes in regulatory requirements and shareholder activism, we have observed significant differences in how listed companies conduct their meetings to ensure regulatory compliance and meet shareholders’ expectations. Adoption of technology such as AGM webcasts and ESG factors have also influenced the way companies conduct their meetings. How do you decide on a suitable format for your next AGM?

      We have compiled valuable insights reflecting the dynamic shifts that have taken place in the world of Annual General Meetings (AGMs) for the January-June period in Malaysia. Whether you’re an investor or a company executive, our infographic helps you understand the dynamics of virtual and physical AGMs in Malaysia. We help you weigh the pros and cons of each format and show you the contributing factors to a successful meeting.

      Download our AGM Trends Infographic today to find out how you can make the right decision for your AGM strategy.

      Download AGM Trends Infographic

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      How is planning a Virtual AGM different from Physical AGM?

      Virtual AGM

      How is planning a Virtual AGM different from Physical AGM?

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      Planning a Virtual AGM in Malaysia?

      Virtual Annual General Meetings (AGMs) provide greater flexibility and engagement opportunities for all of your company’s shareholders regardless of their location.

      However, there are many practical elements to consider when planning a virtual AGM. These include your company’s readiness to go digital, how to do a live Q&A, how polling will occur, which virtual meeting platform to use and more.

      But, before you even get to the detailed planning stage, it is essential to review your company’s constitution to check if virtual AGMs are permitted and the AGM regulatory requirements to ensure that your company can meet its statutory obligations.

      Below is a guide to everything you need to know about running a virtual AGM in Malaysia.

      01 An overview of the current AGM requirements in Malaysia

      Virtual, fully virtual and hybrid AGM limitations

      Companies can only run virtual, fully virtual or hybrid AGMs if their constitution or trust deed allows them to.

      AGM meeting inclusions

      As per section 340 of the Companies Act 2016 (“CA”), publicly listed companies must discuss the following at their AGM:

      • audited financial statements and the reports of the directors and auditors;
      • the election of directors in place of those retiring;
      • the appointment and the fixing of the fee of directors; and
      • any resolution or any other business included on the meeting notice or as per the company’s constitution.

      Timing of AGMs

      The Guidance and FAQs on the Conduct of General Meetings for Listed Issuers (“Guidance Note”) issued by the Securities Commission Malaysia (SC) on 18 April 2020 and revised 16 July 2021 states:

      Under section 340(2) of Companies Act 2016, a company shall conduct its annual general meeting (AGM)–

      (a) within six months of the company’s financial year; and
      (b) not more than 15 months after the last preceding annual general meeting.

      In relation to listed real estate investment trusts (REITs), paragraph 13.18(a) of the Guidelines on Listed Real Estate Investment Trusts (Guidelines on Listed REITs) requires a management company to hold an annual general meeting–

      (a) within four months of the REIT’s financial year end; and
      (b) not more than 15 months after the last preceding annual general meeting.

      Notice of AGM

      The CA states that all shareholders must be sent a notice in writing about the AGM at least 21 days before it is being held. In addition, publicly listed companies must:

      • advertise the notice of AGM no later than 21 days before it occurs in at least one nationally circulated daily newspaper in Bahasa Malaysia or English;
      • send the notice of AGM in writing to each stock exchange where the company is listed; and
      • make an announcement to Bursa Malaysia Securities Berhad 21 days before the AGM is held.

      AGM venue and member participation

      The main AGM venue must be in Malaysia and with the chairperson present at this venue according to section 327 of the CA. Further, the venue must allow members to be able to participate and exercise their rights to speak and vote at the AGM using any technology or method.

      Meeting quorum

      To achieve quorum, there must be at least two members personally participating in the meeting or by proxy, pursuant to sub-section 328(2) of the CA.

      Voting scrutineer

      At least one scrutineer must be appointed to validate the votes cast at an AGM whether on-site or remotely.

      02 How COVID-19 has impacted these AGM requirements

      In response to COVID-19, the Malaysian Government have implemented a number of physical distancing and other safety precautions measures, including:

      • a movement control order (MCO);
      • a conditional movement control order (CMCO);
      • a recovery movement control order (RMCO);
      • an enhanced movement control order (EMCO); and
      • standard operating procedures (SOPs).

      Companies have started to conduct virtual AGMs to mitigate risks associated with Covid-19 and comply with Guidance Note on AGM requirements issued by the Securities Commission of Malaysia (“SC”).

      What are the definitions for Physical and Virtual AGM?

      SC’s Guidance Note defines them as:

      Physical AGM

      “Conducted at a physical meeting venue(s) only, without any online participation.”

      Physical AGMs are only an option during an RMCO, with the number of people allowed to physically attend subject to venue size and ability to comply with SOPs.

      Fully Virtual AGM

      “Conducted online where all meeting participants including the Chairperson of the meeting, board members, senior management and shareholders participate in the meeting online.”

      Fully Virtual AGMs are a recommended option during any of the Movement Control Orders. They are the only AGMs allowable under an EMCO.

      Virtual AGM

      “Conducted online from a broadcast venue, where only essential individuals are physically present to conduct the virtual general meeting. All shareholders in a virtual general meeting participate in the meeting online.”

      Virtual AGMs are a recommended option during an MCO, CMCO or RMCO. If held during an MCO, a maximum of 8 essential people are allowable at the broadcast venue. This increases to 20 people during a CMCO, and during an RMCO the number of people allowable is subject to venue size and ability to comply with SOPs.

      03 What are the advantages and disadvantages of each AGM type?

      Advantages

      Disadvantages

      Physical


      • Helps alleviate shareholder concerns about transparency: Some shareholders have the perception that physical AGMs allow for more transparent and robust discussions on company performance.

      • Access equity: caters to those who lack skills/equipment to participate remotely.


      • Additional costs: eg. venue hire, travel, catering, security, door gift and audiovisual support costs.

      • Limited accessibility: difficult for all shareholders to attend if they do not live within proximity of the venue.

      • Inflexible: physical AGMs are not able to be held when force majeure events occur such as pandemics or natural disasters.

      Fully Virtual and Virtual


      • Lower costs if your company has a large shareholder base: companies can avoid the expenses associated with large physical venue hire and travel costs. While there is an initial upfront investment required for virtual AGM technology, companies save more in the long term.

      • Highly accessible: most shareholders can easily participate remotely.

      • Highly flexible: AGMs can proceed even during force majeure events such as pandemics or natural disasters.


      • Transparency concerns: perception held by some shareholders that Fully Virtual and Virtual AGMs may result in less transparent and robust discussions on company performance. However, reputable virtual AGM providers will offer a live Q&A function to help dispel these concerns.

      • Access equity issues: some shareholders may lack the equipment and skills to participate remotely.

      • Risk of technology failure: meetings may have to be adjourned until technology issues are resolved. An excellent meeting services provider will hold ‘dry-runs’ to minimise the risk of any technical issues.

      Digital AGM tools are no longer just ‘nice to have’, but essential

      Data from the SC’s Corporate Government Monitor 2020 (CG Monitor) indicates that younger people prefer to participate in AGMs using remote participation and voting facilities (RPV). In all age groups (except the 71 years and older category), vast majority of shareholders stated that they would like to have the option of remote AGM participation.

      In short, AGM participation in the future will be firmly rooted in digital technology. This means that it is important for companies to start making the transition now to running virtual AGMs.

      Need help running your next Virtual AGM?

      Our team of share registry experts here at BoardRoom are poised to support your business to deliver the best Virtual AGM possible. We have extensive experience in executing AGMs, scrutineering and also using an independent, thoroughly integrated and purpose-built e-polling platform, Lumi. Through our unique platform, your company can hold live Q&A discussions and authenticate shareholders in real-time at your next virtual AGM.

      Speak to one of our share registry experts today to find out why we are the leading provider of shareholder support solutions in the Asia Pacific region.

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