** This article is subject to the Clarification Statement below.
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** Clarification Statement
- There is no fixed par value under the Companies Act 1965. In this interview, RM1 was provided as an example only.
- It should be read as 'solvency test' instead of 'solvency tax'.
- Capital reduction exercise of a company is just one of the instances where the solvency test will be relevant. Other instances where solvency test will be relevant include redemption of preference shares.
- The increase of penalty imposed on directors from RM30,000.00 to RM3,000,000.00 under certain sections of the new Companies Act was only one of the examples provided only.
- The new Companies Act applies to all companies and not just companies incorporated after the new Companies Act.
- The new Companies Act allows a company to be formed with one or more directors and does not restrict a company must be formed with single director.
- Financial institutions normally require directors to be the guarantors instead of shareholders.