Section 42. Private companies
A company limited by shares having not more than fifty shareholders may—
be registered as a private company;
change its status into a private company; or
remain registered as a private company.
A private company shall restrict the transfer of its shares.
For the purposes of subsection (1), in determining the number of shareholders in a private company—
joint holders of shares shall be considered as one person; and
a shareholder who is or was an employee of the company or its subsidiary when they became a shareholder shall not be counted.
Where a private company—
ceases to restrict the transfer of its shares;
ceases to have a share capital; or
has more than fifty shareholders,
the Registrar shall serve a notice to the company that on such date as specified in the notice, the company ceased to be a private company.
Where, under this section, the Registrar determines that a company has ceased to be a private company—
the company shall be a public company and shall be deemed to have been a public company on and from the date specified in the notice;
the company shall, on the date so specified be deemed to have changed its name by the omission from the name of the word “Sendirian” or the abbreviation “Sdn.”, as the case requires; and
the company shall, within fourteen days from the date of the notice, lodge with the Registrar—
a statement in lieu of prospectus; and
a statutory declaration verifying that paragraph 190(1)(b) has been complied with.
By virtue of a determination made under this section, a company that has become a public company shall not convert to a private company without the leave of the Court.
The company and every officer who contravene this section commit an offence and shall, on conviction, be liable to a fine not exceeding fifty thousand ringgit, and in the case of a continuing offence, to a further fine not exceeding five hundred ringgit for each day during which the offence continues after conviction.
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