Company Law – Amendment of Articles

 

Sample – Amendments to the Share Capital and Variation of Rights in the Article of Associations
Editorial notes: This would be great for companies who intend to issue out ‘preferential shares’ to new shareholders – particularly internet related companies issuing shares to fund manager and/or venture capitalist.

 

Continued from existing Article of Association…….

 

(1) The authorized share capital of the company at the date of the adoption of these Articles is Ringgit Malaysia One Billion (RM 1,000,000,000.00) divided into 1,000,000,000 shares of Ringgit Malaysia One (RM 1.00) each. 

 

(2) Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, but subject to the Act and to these Articles, shares in the Company may be issued by the directors and any such shares may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the directors, subject to any ordinary resolution of the Company may determine. 

 

(3) The Company shall not issue shares to a controlling interest without prior approval of shareholders in general meetings. 

 

(4) For the issue of shares of a class other than ordinary shares, the rights attaching thereto shall be as expressed in these Articles. 

 

(5) Subject to any direction to the contrary that may be given by the Company in general meeting, all new shares or other convertible securities shall, be offered to such persons as at the date of the offer are entitled to receive notices from the Company of general meetings in proportion, as nearly as the circumstances admit, to the amount of the existing shares or securities to which they are entitled. The offer shall be made by notice specifying the number of shares or securities offered, and limiting, a time within which the offer, if not accepted, will be deemed to be declined, and, after the expiration of that time, or on the receipt of an intimation from the person to whom the offer was made that he declines to accept the shares or securities offered, the directors may dispose of those shares or securities in such manner as they think most beneficial to the Company. 

 

(6) Subject to the Act, any preference shares may with the sanction of an ordinary resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed but the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued ordinary shares at any time and the Company shall not unless with the consent of the existing preference shareholders at a class meeting or pursuant to Article 11 hereof issue preference shares ranking in priority above preference shares already issued, but may issue preference shares ranking equally therewith. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving notices, reports and audited accounts and attending general meetings of the Company. Preference shareholders shall also have the right to vote at any meeting convened for the purpose of reducing the capital, or on a proposal to wind up the Company, or during the winding up of the Company, or proposal for the disposal of the whole of the Company’s property, business and undertaking, or where the proposition to be submitted to the meeting directly affects their rights attached to the share and privileges, or when the dividend on the preference shares is in arrears for more than six (6) months. The holder of a preference share must be entitled to a return of capital in preference to holders of ordinary shares when the company is wound up. 

 

(7) Notwithstanding the Article (below) hereof the repayment of preference share capital other than redeemable preference shares, or any alteration of preference shareholder rights shall only be made pursuant to a special resolution of the preference shareholders concerned PROVIDED ALWAYS that where the necessary majority for such a special resolution is not obtained at the meeting, consent in writing if obtained from the holders of three-fourths of the preference shares concerned within two(2) months of the meeting shall be as valid and effectual as a special resolution carried at the meeting. 

 

(8) (the article shall continue…..) 

 

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