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LAW755 Company Law UITM Assignment Example Malaysia

The LAW755 Company Law course at UITM in Malaysia provides a comprehensive overview of Malaysian company law tailored for non-law graduate students at the postgraduate level. The curriculum delves into the organizational structure of corporations, exploring their distinctive legal characteristics within the business landscape. Special attention is given to the corporate constitution, financial aspects, and administrative functions. 

The LAW755  course places a significant focus on elucidating the rights, duties, and liabilities of the board of directors. By the course’s conclusion, students are equipped with a solid understanding of the legal framework surrounding corporations in Malaysia, ensuring they grasp the intricacies of corporate governance and financial operations

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Our expert team ensures that the delivered solutions align with the course’s learning outcomes, which cover Malaysian company law, corporate structure, constitutional aspects, financing, administration, and board of directors’ responsibilities. 

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Assignment  Task 1: Explain the nature of a company as a legal entity and its special characteristics

A company, as a legal entity, is an organization created and recognized by law to conduct business activities. It is distinct from its owners and exists as a separate legal person, capable of entering into contracts, owning property, and being liable for its obligations. The nature of a company is characterized by several key features that distinguish it from other forms of business structures:

Legal Personality:

  • A fundamental characteristic of a company is its legal personality. This means that the company is considered a separate legal entity from its owners (shareholders). As a legal person, it can sue and be sued, enter into contracts, and hold assets in its own name.

Limited Liability:

  • One of the most significant advantages of a company structure is limited liability. Shareholders’ liability is typically restricted to the amount invested in the company. This shields personal assets from business-related debts and liabilities, providing a level of financial protection for shareholders.

Perpetual Succession:

  • A company enjoys perpetual succession, meaning its existence is not affected by changes in ownership or the death of shareholders. The company can continue to operate and fulfill its obligations despite changes in its ownership structure.

Transferability of Shares:

  • The ownership of a company is represented by shares, which can be easily transferred between shareholders. This facilitates the buying and selling of ownership interests, providing liquidity to shareholders and attracting investors.

Centralized Management:

  • Companies typically have a centralized management structure, with a board of directors overseeing the company’s strategic decisions and a management team responsible for day-to-day operations. Shareholders, while having the power to elect the board, generally do not participate directly in the management of the company.

Raising Capital:

  • Companies have the ability to raise capital by issuing shares to the public or private investors. This allows them to accumulate funds for expansion, research and development, or other business activities.

Regulatory Compliance:

  • Companies are subject to various legal and regulatory requirements, including filing financial statements, holding annual general meetings, and complying with corporate governance standards. These regulations vary by jurisdiction and aim to ensure transparency, accountability, and fair treatment of shareholders.

Separation of Ownership and Control:

  • In larger companies, there is often a separation between ownership (shareholders) and control (management). This can lead to agency issues, where the interests of shareholders may not align perfectly with those of the management, requiring mechanisms such as corporate governance to mitigate conflicts.

Understanding these characteristics is crucial for individuals and entities engaging with or forming companies, as they shape the legal framework, rights, and responsibilities associated with this form of business organization.

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Assignment Task 2: Critically appreciate the operation of the corporation as opposed to other forms of business enterprises

The operation of a corporation, when compared to other forms of business enterprises such as sole proprietorships and partnerships, presents both advantages and disadvantages. It’s essential to critically appreciate these aspects to make informed decisions about the most suitable business structure. Here’s a detailed analysis:

Advantages of Corporations:

Limited Liability:

  • One of the primary advantages of a corporation is limited liability. Shareholders are not personally responsible for the company’s debts and liabilities, protecting their personal assets. This is a significant contrast to sole proprietorships and partnerships, where personal assets are at risk.

Perpetual Succession:

  • Corporations have perpetual succession, meaning the business can continue to exist despite changes in ownership or the death of shareholders. This provides stability and longevity, a feature not inherent in sole proprietorships and partnerships, which are often more closely tied to individual owners.

Raising Capital:

  • Corporations have the advantage of raising capital by issuing shares to a large number of investors. This ability to attract funds from the public or private sources facilitates substantial financial resources for growth, expansion, and investment in research and development.

Transferability of Shares:

  • The ease of transferring ownership through the buying and selling of shares enhances liquidity for shareholders. This contrasts with partnerships and sole proprietorships, where transferring ownership can be more complex and may require the consent of other partners.

Centralized Management:

  • The centralized management structure of corporations, with a board of directors and appointed executives, can lead to more efficient decision-making and strategic planning. This professional management structure can be an advantage compared to partnerships and sole proprietorships, where management responsibilities may be less clearly defined.

Disadvantages of Corporations:

Complex Formation and Maintenance:

  • Establishing and maintaining a corporation involves significant legal and administrative complexities. Compliance with regulations, filing requirements, and corporate governance standards can be more demanding compared to other business structures.

Double Taxation:

  • Double taxation impacts corporations, subjecting them to taxes at both the corporate level on profits and at the individual level on dividends distributed to shareholders. This stands in contrast to sole proprietorships and partnerships, where the individual level is typically the sole point of taxation for profits.

Costs of Compliance:

  • Meeting legal and regulatory requirements can be costly for corporations. This includes expenses related to audits, reporting, and adherence to corporate governance standards. In contrast, sole proprietorships and partnerships may have fewer formalities and associated costs.

Less Control for Shareholders:

  • While shareholders have the ability to elect the board of directors, they may have limited influence on day-to-day operations. This separation of ownership and control can result in agency issues, where the interests of shareholders may not align perfectly with those of the management.

Public Scrutiny:

  • Publicly traded corporations are subject to intense public scrutiny, including media attention and shareholder activism. This level of visibility can sometimes be a disadvantage, particularly during challenging times or when facing public controversies.

In summary, the operation of a corporation offers distinct advantages such as limited liability, perpetual succession, and the ability to raise capital, but it also comes with drawbacks like double taxation, complex compliance requirements, and potential challenges in shareholder control. The choice between a corporation and other forms of business enterprises depends on factors such as the business’s size, goals, and the preferences of its founders and investors.

Assignment Task 3: Analyse the provisions of the Companies Act in particular and decided cases to ascertain strengths and weaknesses of Malaysian company law

As of my last knowledge update in January 2022, I do not have access to the specific details of the Companies Act in Malaysia or the latest decided cases related to Malaysian company law. However, I can provide you with a general approach to analyzing company law provisions and deciding cases to ascertain the strengths and weaknesses of Malaysian company law. Please note that you should refer to the latest legal texts, cases, and commentaries for the most up-to-date information.

Analyzing the Provisions of the Companies Act:

Legal Structure and Incorporation:

  • Evaluate how the Companies Act outlines the legal structure of companies and the procedures for their incorporation. Assess whether the provisions are clear, accessible, and provide sufficient guidance for businesses.

Corporate Governance:

  • Examine the provisions related to corporate governance, including the roles and responsibilities of directors, board structures, and mechanisms for shareholder protection. Assess whether the law encourages transparency, accountability, and the protection of minority interests.

Shareholder Rights and Remedies:

  • Analyze how the Companies Act protects shareholder rights and provides remedies in cases of corporate misconduct or oppression. Consider the provisions related to shareholder meetings, voting procedures, and the right to bring legal actions.

Financial Disclosures and Reporting:

  • Assess the requirements for financial disclosures and reporting by companies. Examine whether the law ensures transparency in financial matters, and whether it imposes appropriate obligations on companies to provide accurate and timely information.

Audit and Accounting Standards:

  • Evaluate how the Companies Act incorporates audit and accounting standards. Consider whether there are mechanisms in place to ensure the integrity of financial reporting and the independence of auditors.

Analyzing Decided Cases:

Precedents and Legal Interpretation:

  • Examine recent decided cases to understand how the courts interpret and apply the provisions of the Companies Act. Assess whether the legal principles established in these cases align with the legislative intent and contribute to legal certainty.

Shareholder Disputes and Corporate Litigation:

  • Analyze cases related to shareholder disputes and corporate litigation. Evaluate the effectiveness of legal mechanisms in resolving conflicts and protecting the rights of minority shareholders.

Directorial Duties and Liabilities:

  • Review cases involving breaches of directorial duties and liabilities. Assess whether the legal framework adequately holds directors accountable for their actions and whether there are sufficient remedies for stakeholders.

Insolvency and Corporate Rescue:

  • Examine cases related to insolvency and corporate rescue. Assess the effectiveness of the legal provisions in dealing with financially distressed companies and protecting the interests of creditors and other stakeholders.

Identifying Strengths and Weaknesses:


  • Look for instances where the Companies Act has been effective in promoting corporate governance, protecting shareholder rights, and ensuring transparent business practices.
  • Identify cases where the legal framework has facilitated efficient and fair resolution of disputes and has contributed to the overall stability of the corporate sector.


  • Identify areas where the Companies Act may be ambiguous, outdated, or insufficient in addressing contemporary corporate issues.
  • Highlight cases where legal loopholes or shortcomings in the law have led to unjust outcomes or have failed to adequately protect the interests of stakeholders.

 Legal scholars, practitioners, and policymakers often rely on such analyses to propose reforms and improvements to the legal framework governing companies.

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