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and suggestions from interested persons and bodies within Malaysia. 115 There have
been changes to the companies legislation since 1965 although these are all
piecemeal amendments which attempt to address some issues as and when they arise.
However, in 2006, in response to the financial crisis in the late 1990s, a Law
Committee was established to look into the existing legislation. (These proposals
will be discussed later in this chapter)
4.2.3 Major Trends in Company Law
The period between 1862 and 1972, saw two competing approaches to company law,
the utility approach and the responsibility approach. 116 The utility approach, based
on the premise of company‟s ability to perform rational economic and social ends,
was apparent in the earlier statutes of 1844 and 1855. 117 In the latter years, the
responsibility approach, centred on company‟s responsibility towards members and
outsiders, was more dominant. 118
At the time when the Joint Stock Companies Act 1856 was passed, the prevailing
theme was the doctrine of economic liberalism and laissez-faire. 119 This is in line
with the utility approach. 120 The objective was to encourage the formation of
businesses and to reduce excessive rules and formalities in order to stimulate the
economy at the time. 121 This objective was apparent where the Act allowed greatest
freedom in the formation and working of a limited liability by introducing a simple
115 Ibid.
116 Farrar and Hannigan above n7 at 21.
117 Ibid.
118 Ibid.
119 Schmitthoff Palmer’s Company Law above n39 at 10.
120 Ibid.
121 Ibid.
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