Challenges to SMEs from the New Malaysian Company Law and covid-19
In 2016, Malaysia’s new Company Law provided growth incentives for SMEs to meet the challenge of covid-19 infectious diseases.
SMEs play an important role in the engine of economic growth in Malaysia and other countries. Small and medium-sized enterprises can help workers increase their income. It is necessary to have a deep understanding of the industries with great potential in Malaysia’s economic growth. Fundamentally speaking, SMEs play an important role in the economy; That is, we should stimulate economic growth and growth, reduce poverty levels and help improve people’s basic living standards.
On the surface, the increasingly flat world and the borderless environment of a network seem to increase and continue entrepreneurship; The personality that national economic stakeholders focus on can mainly become the relevant driving force of the economy, so it is not subject to the specific obstacles or restrictions such as fixed working hours or other restrictions of ordinary employees.
1) New Malaysian Company Law – Introduction to the Role Play of SMEs
In order to keep up with the modern business convenience in the form of the Company Law of 2016 (Act No. 777), the previous Company Law of 1965 has undergone a strict reform process. These bills passed the House of Representatives (Dewan Rakyat) on April 4, 2016. The Act entered into force on 30 January 2017 (except for section 241 and section 8 of Part 3).
The goal of the new act is to provide sustainable protection for company directors and all other stakeholders of the company, and to provide the latest regulatory legal framework for better supporting new enterprises related to SMEs.
2) Malaysian Companies Act and SME – barriers or assistance to SMEs?
At present, there is no clear or fairly clear answer to what “pigeonhole” is. In the new company law of 2016, it may be premature or even dangerous to try to popularize the role of SMEs. Many schools try to answer this question with different views and results, often the opposite. For example, the Austin School equates law with force. If the order is not complied with, the “sanction” (threat of harm) supports the order or order. This “black letter” method is the same as the narrow study of legal rules, and may also be traditional, or even Gothic. This refers to what the law can or should do in its appropriate context, especially in the actual stage, social context, or more precisely, in the context of task relevance and business.
In order to ensure that the law governing the enterprise is the best or fair, the main question to be answered is: “What is a good law to make the law suitable for the enterprise environment?” At this juncture, it is necessary to limit the scope of the debate so that all differences cannot be discussed in a concise task; The prescribed limitations apply only to common law. The origin of common law originates from the writ system of Roman law and medieval English law, which gives specific answers to a series of personal problems or disputes. Ruyi foreign exchange/or civil liability rules for intentionally infringing upon others’ freedom and property; Legal rules regulating court enforcement agreements And the rules governing the relationship between tenants or users who pay money or other forms of consideration for the legitimate use of these rights. There are mainly two schools of thought on civil liability. First, according to the economic analysis of the law, it is determined that the law is about maintaining efficiency. The other is to emphasize judicial punishment. That is, the law is about the compensation of the victim for the damage caused by the wrongdoer. The same argument for civil liability; In other words, these two ideas are also applicable to contractual commercial disputes. In the legal theory of property, some people believe that personal property (i.e. private enterprises) has its origin and form in everyone and his own labor. It is also common that property is referred to as an independent right“ A pile of grass dust“ (Rights binding is usually a series of claims rights and obligations related to ownership, but may change in some cases according to the different public interests. Considering that new laws such as the Company Law of 2016 have entered the field of enterprises, attention should be paid to/or education should be given to relevant persons. The effect of managing enterprises Better legal model.
3) Some important provisions of Malaysian Company Law on SMEs
Section 196 (1) (a) and (b) of the new Act provides for the minimum number of directors of public and private companies. The concept of “single member company” here has been realized. For individual limited companies, a company can be composed of a single member, and the former can also serve as the sole director. Please note that in addition to two directors, the situation is similar for listed companies (Bhd). This is a huge advantage for one-man enterprises. It can be converted from one-man system to one-man company. Because the latter provides limited liability. This is a feasible, sustainable and smart economic advantage for SMEs. Because SMEs can avoid premature bankruptcy due to unlimited liability in the competitive environment.
Various technical difficulties faced by SMEs in the past have been simplified in the process of merger. Previously, many forms were required (Forms 6, 48A and a copy of the organizational summary and articles of association), but now all forms are merged into the “super form” process by the sponsors or shareholders. The Memorandum and Articles of Association of the Company (see Article 31 (2) and (3) of the New Act) and the appointment of the Company Secretary are optional. These measures have effectively improved the transparency and perceived viability of SMEs as a whole.
Article 19 of the new Act stipulates that the registration notice is conclusive evidence. Articles 21 (1) and 14 (2) effectively eliminate the outdated strict provisions in the 1965 Company Law, requiring all small and medium-sized enterprises to comply with the objective provisions of the articles of association in order to decide what the enterprise can or cannot do. The removal of this restriction has greatly improved the opportunities and flexibility of SMEs in business programmes. Of course, the only restriction that exists is the logical restriction that companies related to SMEs cannot engage in or establish for illegal purposes.
4) Conclusion: The Company Law is a social structure that can be implemented by SMEs
A good way to rebuild ownership is to realize more democratization of knowledge, or complete democratization of knowledge if possible. This can be seen as a modified version of sustainable socialism. i. Knowledge is a social commodity, not a property in the hands of anyone. The problem is how to embody the concept of knowledge democratization in our economy. Some people admit that in economy, the law is not only to protect the superstructure of the upper class, but also to take the common interests as the goal and fulcrum of all economic laws in the commodity production of SMEs. This kind of democratization of knowledge is the third way between sustainable socialism and fragmentation of personal knowledge, which is the characteristic of the market. Will defeat casino capitalism. Because macroeconomic planning is not only about big ideas, small and medium-sized enterprises will have a more fair competition environment in the political discussion.
The new Malaysian Company Law has sufficient conditions to supervise and guide SMEs, cooperate with the federal government and establish a viable national economy… From the perspective of common interests, SMEs will certainly use this concept. Small and medium-sized enterprises will make use of the platform in the production field related to business and have the ability to obtain funds from the national economic plan and annual financial budget. However, it should not be confused by the reasons for easing restrictions and more privatization. On the contrary, under the guidance of focusing on life and common interests, the black legal letters of sustainability regulations such as company laws, regulations and plans must be retained and dominated.
