Legislation

 

Mineral Legislation  


In Malaysia, activities relating to “mineral” and “rock material” are governed by separate laws.

 

"Mineral" means any substance whether in solid, liquid or gasoeus form occuring:

  • naturally;
  • as a result of mining in or on the earth; or
  • as a result of mining in or under the sea or seabed,

 

formed by or subject to a geological process, but excludes water, “rock material” as defined in the National Land Code and “petroleum” as defined in the Petroleum Mining Act 1966.  

The two main legal instruments that govern activities relating to “mineral” are the Mineral Development Act, 1994 and the State Mineral Enactment.  The Mineral Development Act came into force in August 1998, while the State Mineral Enactment is currently at various stages of being adopted by the respective State Governments.

The Mineral Development Act 525 of 1994 defines the powers of the Federal Government for inspection and regulation of mineral exploration and mining and other related issues.  The State Mineral Enactment provides the States with the powers and rights to issue mineral prospecting and exploration licenses and mining leases and other related matters.  As at end of 2008, ten states have adopted the State Mineral Enactment .

“Rock material” means any rock, stone, granite, limestone, marble, gravel, sand, earth, laterite. loam, clay, soil, mud, turf, peat, coral, shell or guano within or upon any land, and includes also any bricks, lime, cement or other commodity manufactured therefrom.

In Peninsular Malaysia, activities relating to “rock material” are governed under the National Land Code 1965.  Of relevance are the Quarry Rules which have been made under Section 14 of the National Land Code.  As at end of 2008 the states of Perak, Kelantan, Sabah, Selangor, Pahang and Terengganu have adopted and implemented the Quarry Rules to regulate quarrying activities.

Business Legislation  

 
In Malaysia, the most common types of businesses are sole proprietorships, partnerships and companies.


SOLE PROPRIETORSHIPS commonly have just one business owner, and only citizens or permanent residents of Malaysia can register. Personal names or trade names can be used as business names, however, certain names, like those associated with royalty or government agencies (i.e. "national", "chartered" or "di-Raja") is prohibited. The relevant authorities, such as the Registrar of Business, are empowered to reject any submitted name deemed inappropriate or misleading.


PARTNERSHIPS comprise two or more business partners. Similar to sole proprietorships, only citizens or permanent residents of Malaysia can register partnerships. A partnership agreement is usually drawn up by legal practitioner , which outlines the responsibilities of each partner, conditions of termination and means of resolving intra-partner disputes.

 

COMPANIES are registered legal entities comprising shareholders that can own property, draw contracts and employ people. The most common type of company in Malaysia is a company limited by shares (public limited and private limited companies).


Private limited companies cannot sell shares to the public, and are distinguished by the appellation "Sendirian Berhad", shortened to "Sdn Bhd" or "S/B".


Public limited companies source their capital by selling shares to the public, and are distinguished by the appellation "Berhad", shortened to "Bhd".


Companies in Malaysia are governed by the Companies Act 1965, which protects the rights and interests of shareholders and investors, and provides regulations for the incorporation of companies, the formulation of company constitutions, management and closures.

 

A company must have a minimum of two members, but a private limited company is limited to 50 members (public limited companies have no member limit). A minimum paid-up capital of only RM2 is needed to start a private limited company, while public limited companies need a paid-up capital of not less than RM60mil (if it seeks to be listed on the Kuala Lumpur Stock Exchange Main Board) or not less than RM40mil (if it seeks to be listed on the KLSE Second Board).


Companies and corporations wishing to operate in Malaysia are required to register with the country Registar of Business, the Companies Commission of Malaysia (CCM). Under CCM’s regulations, for local and foreign enterprises. there are different procedures.

 

Local companies firstly must file an application to the CCM to inquire if the intended name is still available for registration. If the name is available, a reservation period of three months will be granted, during which time the company should submit copies of documentation amongst others the company Memorandum and Articles of Association (MMA), Statutory Declaration of Compliance and Statutory Declaration, plus relevant fees. CCM will issue a certificate of incorporation once registration procedures are completed and approved. Companies must file registers of members, directors, managers, secretaries and interest holders with CCM at all times.

Foreign companies are required to register a branch or set up a local company in Malaysia in order to conduct business in the country. The company must also undergo the same procedure as a local company, which is to put an application to inquire if the intended name is still available.  A reservation period of three months will also be granted, during which time the company must submit copies of documentations such as Certificate of Incorporation, Company Charter, List of Directors, a memorandum of appointment authorising a Malaysian resident to accept any notices served on the company and Statutory Declaration, plus relevant fees. Documents in a language other than the country’s national language, Bahasa Malaysia or English must have an accompanying certified translation. Once all procedures are completed and approved, CCM will grant the applying company the status of a foreign company operating in Malaysia.  
 

 

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