Company Law LabFPEPS · Universiti Malaysia Terengganu
Malaysian company law
Pilot 01 · Suggested time 15–20 minutes
Separate legal personality

Who owns the company’s equipment?

A shareholder owns shares. Does that mean the shareholder also owns everything the company buys? Read the law, decide the scenario, then test your reasoning.

Baca peruntukan, jawab soalan dan semak alasan anda.

The company is a separate legal person

Section 20 separates a company’s legal personality from that of its members. Section 21 recognises the company’s capacity to own property and to sue or be sued.1

This means we must identify whose property, transaction or claim is involved. A person’s membership alone does not make that person identical to the company.

Syarikat dan ahlinya perlu dibezakan. Kenal pasti pihak yang memiliki harta atau terlibat dalam urus niaga.

Three questions to ask

  1. Who is the legal person?
  2. Who acquired the property or entered the transaction?
  3. What does the relevant provision actually support?

Read the provisions

Companies Act 2016, section 20

“A company incorporated under this Act is a body corporate and shall— (a) have legal personality separate from that of its members; and (b) continue in existence until it is removed from the register.”

Companies Act 2016, section 21

“(1) A company shall be capable of exercising all the functions of a body corporate and have the full capacity to carry on or undertake any business or activity including— (a) to sue and be sued; (b) to acquire, own, hold, develop or dispose of any property; and (c) to do any act which it may do or to enter into transactions. (2) A company shall have the full rights, powers and privileges for the purposes mentioned in subsection (1).”

Full text of both provisions. Source 1, printed page 58.