The shareholders of a company in Labuan are those individuals or other legal entities that own one or more shares in public or private companies. The members are, collectively when applicable, the owners of the company.
Labuan is a jurisdiction in which only one shareholder is required to open a company and foreigners have the same rights as local owners.
Our team of Labuan company formation agents details the main duties and liabilities of shareholders as well as the general conditions under which local and foreign individuals are allowed to incorporate and own company shares.
Labuan is a Federal Territory of Malaysia that functions starting with 1990 as an international offshore financial center. It is a location when offshore banking and insurance, offshore trust and fund management, as well as an offshore investment holding and other activities, are easily set up and managed. The jurisdiction has grown in growing popularity as one of the top international and business financial centers.
What are the shareholder’s rights in Labuan?
The shareholder is entitled to a number of benefits and in some cases even special privileges according to the class of shares he owns. While the rights can be different from one type of company to the other, in general, they can include:
- – the right to receive dividends;
- – purchase new shares and sell their shares (this can be restricted in some cases);
- – vote in relevant shareholder meetings, such as for the appointment of company directors in Malaysia.
- – have access to relevant information about the company, it’s financial situation and other details;
- – receive remaining assets after a company liquidation.
A shareholder’s ability to vote is conditioned by the class or type of shares owned. These can allow for special, conditional or limited voting rights or for no voting rights at all. Thus, some shareholders may have certain privileges related not only to their voting powers but also their rights in the repayment of capital, their participation in surplus assets and profits and others. These special rights and the rights of shareholders, in general, are included in the Articles of Association.
The Companies Act is the main legal resource where information about the rights of shareholders and it also includes information about the manner in which they can exercise their voting power.
What are the shareholder’s attributions in Labuan?
Shareholders issue special resolutions for the company, for example, they have the power to issue shares via a resolution. The company director is the one that exercises this power but he cannot allot shares unless the shareholders approve this action. Any new shares should be offered to existing shareholders and by observing their voting rights, when there are more classes of shares applicable. Moreover, directors must obtain approval from the shareholders before they can convert securities into shares.
What are the main issues to consider for those who become shareholders in a Labuan company?
According to law, entrepreneurs who open a company in Labuan need to comply not only with the general incorporation requirements, such as clearly observing the registration steps but also with the disclosure requirements. As far as the company’s shareholders are concerned, these include the register of shareholders, which is an updated and accurate index with the names of the company shareholders. In the case of a Labuan protected cell company, the register includes the following information:
- – information on the shareholder’s account, for the purpose of identification in case of specific needs;
- – the specific cell or cells to which the shareholder’s account is linked;
- – searchable links to the account by means of references to particular cells;
- – updated information when any details change about a particular shareholder or when shareholders are added or removed.
The protected cell company in Labuan is a limited liability company that can be used to form cells, for example having a core one for holding general assets and any number of other cells that are set up for the purpose of protecting the assets of respective cells. Each cell is separate and has the power to carry out business independently under the umbrella of the main company.
One of our Labuan company formation agents can give you more information on the uses and the incorporation of the protected cell company or PCC and the specific requirements that apply in these cases, to shareholders in particular and to company management in general.
Investors who wish to open a Labuan offshore company and need to know more about the rights of shareholders can contact us for complete information as well as incorporation assistance.