By U K Menon LLM
(Monash), Barrister of the Inner Temple, advocate and Solicitor, Malaya
Title: Janab’s Key to
Company Law with Commentary to Companies Act 2016 and Limited Liability
Partnership Act 2012
Author: YA Datuk
Dr. Hj. Hamid Sultan Bin Abu Backer
Published by: Janab (M) Sdn Bhd 2021
Date published:2021
Format: Hardback
ISBN: 978-967-19728-0-9
Length: 1000 pages
Justice Datuk Dr. Hj. Hamid Sultan Bin Abu Backer is one of
the most innovative minds to emerge from the Malaysian judiciary. From his Oath
Jurisprudence, which he proposes as an alternative approach to the long-prevailing Basis Structure
Jurisprudence in constitutional law, to the establishment of a university-based
arbitration, this former judge of the Court of Appeal is a tireless reformer and
innovator of the law and the legal system. His latest contribution, Janab’s Key
to Company Law, presents an important and well-established area of law in a new
and exciting style.
Few areas of common law are as fascinating as the law of
corporations and its immediate derivative – company law. A study of the subject
helps us see how men's thoughts moved over the centuries toward the idea of a
group of people being treated as an entity. If modern company law is the
offspring of the corporation, the idea of the corporation lies, as Harold Laski
pointed out, in
the group life of the old English boroughs, guilds, and ecclesiastical bodies. But
the early corporations from which the modern trading companies evolved, were
established as not-for-profit entities as most companies now are, but to
promote a public good, such as hospitals, universities, and other charities. Only
in the 17th century did making money become a major focus for corporations.
This came about with the rise of colonialism when the corporation became a
vehicle for trading purposes, used by a class of adventurers exploiting the
colonial process.
Today, the fascination with the company lies not in its
history, but in its presence in all countries as the principal instrument of
business. The terms company and corporation evoke in the public mind, images of
wealth and success and of people, ‘korporats’, they are often called, who drive
fancy cars, live in mansions and five-star hotels, and have their expenses paid
by the company they work for. The corporate man or woman is seen as the epitome
of modern success, of someone having arrived.
Yet, despite the enchantment, no other device created by law
has been at the centre of so many controversies as the limited liability
company. Even our colonial past is linked to the insalubrious pursuits of corporations
such as the East India Company and the North Borneo Chartered Company which have
been the main vehicles of colonialism in this part of the world. The mischief
that they caused centuries ago continues to haunt us today as is shown by the recent
events concerning the Sulu claim to Sabah. Although not always the servants of
any country, multinational companies operating outside their western bases,
continue to bear traces of the practices of these old colonial companies in
their activities in Asia and Africa.
The study of company law in modern law schools is, however, seldom
concerned with the rise of corporations in the economic history of man but with
the company, which can be established by anyone by spending a few dollars and
complying with a few simple formalities. Company law today is mostly about the
establishment and regulation of companies, their internal management, their
transactions with outsiders, the rights of the shareholders among themselves,
and finally about how they are terminated. Most of the law about companies is
found in legislation supported by a huge body of case law that interprets the
legislation and imports into the subject long-established principles of equity
and trust. This aspect of company law is emphasised throughout the book. The
author makes the point at various parts of the book, that the new Companies Act
2016 will continue to be interpreted according to those principles and the
existing case law on the subject.
Pre-independent legislation on companies must be unraveled
through the law-making processes of the different colonial entities such as the
Straits Settlements, the Federated Malay States, the Unfederated Malay States,
and the Malayan Union. Different Ordinances governed the different entities
until the formation of the Malayan Union when a single legislation, the
Companies Ordinance 1946 (MU 13 of 1946) was applied to all the said entities.
When the independent Federation of Malaya was formed in 1957, the Companies
Ordinance of 1946 continued. There was a further consolidation of the
legislation when the new political entity of Malaysia was formed. A new
legislation, the Companies Act 1965 (the 1965 Act), based to a large degree on
the Uniform Companies Act 1961 of Australia, was applied throughout Malaysia.
The 1965 Act went through several amendments. More importantly, it was joined
by other legislation regulating the corporate environment and the securities
industry, most notably the Securities Commission Act 1993.
Companies’ legislation in this country, from the first
ordinances to the Companies Act 1965 had their origins in companies’
legislation of Britain and other Commonwealth countries.
The 2016 legislation is a modernisation of company law that responds to a wider
range of influences and recommendations, including the World Bank’s 2012
Malaysia Report of the Observance of Standards and Codes on Accounting and
Audit Oversight, the World Bank’s Ease of Doing Business Report and the report
issued by the Organisation for Economic Co-operation and Development (OECD)
Peer Review Group of the Global Forum on Transparency and Exchange of
Information for Tax Purposes on Malaysia.
Company law has become such a vast subject that is best
approached through a textbook on the subject or a practitioner’s guide. The
2016 Act has 620 sections as opposed to the 371 sections in the previous
legislation. There are also thirteen schedules to the new Act, compared to the ten
in the old Act.
Justice Datuk Dr. Hj. Hamid Sultan Bin Abu Backer’s book
follows a long tradition of books on company law, some of which, like Gower’s authoritative
Modern Company Law have influenced judicial decisions on the subject in
several jurisdictions. Janab’s Key to Company Law (JKCL), written from the
perspective of a senior judge of the Court of Appeal is bound to have the same impact
on the development of case law on the subject in this country.
JKCL adopts an entirely original approach to a textbook on
company law that is multidimensional and more accessible to the different
aspects of the subject. The book is divided into eight chapters as shown below.
Chapter I Introduction
Chapter II Bird’s Eye View of Companies Act 2016 and Explanatory
Cases
Chapter III General Principles and Terminologies
Chapter IV Company Jurisprudence and CA 2016
Chapter V Receiver and Manager
Chapter VI Winding Up by Court
Chapter VII Commentary on the Companies Act 2016
Chapter VIII Limited Liability Partnerships Act 2012
The chapters, other than Chapter 8,
which deals with the Limited Liability Partnerships,
provide different, almost discrete pathways into the vast subject. Someone who
is interested in a general understanding of the subject or a quick
appreciation of how some of the main principles of company law have been
altered by the new legislation will find his questions answered in the
introductory chapter. The chapter also provides a quick glimpse of all areas of
company law, which will be useful for someone approaching the subject for the
first time.
Chapter II as the name indicates is a bird’s eye view of all
five parts of the Act, followed by the author’s view of the significant changes
made by the new Act. The chapter highlights thirty-four significant changes by
way of bullet points. This section of the chapter provides researchers a quick
understanding of where the changes have taken place from the previous
legislation. Explanatory cases in Chapter II take the reader through the cases
that have interpreted some of the more important provisions of the Act. About seventy
cases are discussed in this section.
Chapter III explains some of the actors and processes in company
law through a glossary of terms taken from the Companies Act and from company
law generally. The section is useful as a quick reference to those terms, and
how, if it all, the meanings attributed to them have changed.
Chapter IV entitled, Company Jurisprudence and Companies Act
2016. The chapter examines several important concepts that have woven company
law into a single discipline or code of behaviour. The observance of these
concepts is the consideration exacted by law for the privileges of incorporation
and limited liability. The chapter covers areas such as directors’ duties, the
Rule in Foss v Harbottle, derivative actions against the company, minority
rights of shareholders, and oppression of their interests.
Chapter V deals with receivers and managers and Chapter VI
with the winding up of the companies. Both chapters provide detailed
expositions of the respective subjects and can stand as independent tomes on
the subjects.
Chapter VII of the book, the longest in the book, deals with
a section-by-section analysis of the companies Act 2016. It is this chapter
that will prove most useful to the student and young practitioner, the main
audiences intended by the author. One difficulty encountered in teaching the
subject over a twenty-year period in two different jurisdictions has been in
aligning students’ understanding of the many principles of company law with the
related statutory provisions. The commentary on the Companies Act 2016
presented in Chapter VII will go a long way in overcoming that difficulty. The
analysis will also be of considerable help to the young practitioner stepping
into practice in corporate law. It would have helped if Chapter VII had a
separate index to its contents, linking the general principles to the statutory
provisions. But this is not a serious omission because the reader will find
such a link between principles and statutory provisions on the contents page of
Chapter II.
As mentioned earlier, JKCL is not your typical company law
textbook, but a reader taking some moments to understand the layout of the
chapters in the book will be amply rewarded by grasping the principles of
company law, the statutory expression of those principles as well as their
underlying jurisprudence.
From the perspective of a teacher of company law, the book
may also serve as an indispensable resource package for that purpose.
