Description
- The Issuance of New Shares refers to the process where a company increases its share capital by creating and allocating additional shares to existing or new shareholders. This allows the company to raise funds for expansion, pay off liabilities, or enhance its capital base.
GOV Department
- Suruhanjaya Syarikat Malaysia (SSM) / Companies Commission of Malaysia
License Name (Malay)
- Pengeluaran Saham Baharu
Details
- Companies may issue new shares as authorized by their Constitution or with approval from shareholders.
- The process involves passing a board resolution, notifying SSM, and issuing share certificates to the allocated shareholders.
- New shares can be issued through rights issues, private placements, or public offerings.
- Complies with the Companies Act 2016 and other regulatory guidelines.
Important Rules
- The issuance must align with the company's authorized share capital and Constitution.
- Approval from shareholders or the board of directors is required.
- Companies must file the necessary documents, such as Form Section 75 & 76 Notice, with SSM.
- Shareholders must be informed about the new issuance and its impact on their shareholding percentage.
- The use of proceeds from the new shares must be disclosed and managed transparently.
Compound & Punishment
- Failure to notify SSM about the new share issuance within the stipulated timeframe may result in:
- Fines up to RM50,000 for the company and its directors.
- Invalid issuance, which may lead to legal disputes from shareholders.
- Providing false or misleading information during the process can result in severe penalties, including imprisonment for responsible parties.
Advisor
Jeffrey Eh Hao Yih , Director
Jeffrey has been providing expert guidance for businesses dealing with ongoing challenges. With his expertise, he aids clients in strategic business planning, streamlining operations, and enhancing productivity. Additionally, Jeffrey offers diverse business technology services to help digitize traditional businesses effectively.
Commonly Asked Question
The issuance of new shares means a company is creating and offering additional shares to new or existing shareholders.
It helps the company raise more funds or bring in new investors.
Companies issue new shares to:
- Raise capital for business expansion
- Attract new investors or partners
- Reduce debt or increase cash flow
- Reward employees with shares (ESOS schemes)
The Board of Directors must approve the share issuance.
In some cases, shareholders’ approval is also required through an ordinary resolution at a general meeting.
The Board of Directors must approve the share issuance.
In some cases, shareholders’ approval is also required through an ordinary resolution at a general meeting.
Steps:
- Directors approve the share issuance
- Get shareholders’ approval (if required)
- Allot the shares to the investors
- File the Return of Allotment (Form Section 78) with SSM within 14 days after allotment
- Board resolution and shareholder resolution (if applicable)
- Form Section 78 (Return of Allotment)
- Updated register of members
- Share certificates for new shareholders
- Yes, but only if all existing shareholders agree, or if allowed by the company constitution.
- Otherwise, existing shareholders usually have first right of refusal.
The company must lodge Form Section 78 (Return of Allotment) with SSM within 14 days after the new shares are issued.
Failure to lodge within 14 days is an offence under the Companies Act 2016.
The company and its directors can be fined up to RM50,000.
It helps companies raise capital, grow faster, and strengthen ownership structure, while maintaining compliance with SSM regulations.