Business structures and the Participating Organisation

Questions here test whether you can tell a sole proprietorship, a conventional partnership, a limited liability partnership and a company apart on liability, legal personality and size limits, and whether you know the Companies Act 2016 basics: private versus public companies, the optional constitution, minimum directors, resolutions, notice periods and AGM timing. The second half covers how a Participating Organisation of Bursa Securities is staffed: its Registered Persons, the three Heads and who may hold a dealing licence.

6 min read5 sections

Companies Act 2016 (Act 777) text read from the published Act, with section headings checked against the consolidated text as at 1 August 2022 on lawplayer.com; Limited Liability Partnerships Act 2012 (Act 743) published by SSM; Partnership Act 1961 ss.3 and 11; Rules of Bursa Malaysia Securities Chapter 3 (as at 2 October 2023) and Chapter 6 (as at 21 August 2020), with the consolidated Rules as at 28 August 2026, read on bursamalaysia.com on 12 October 2026. As at October 2026. Independent prep, not endorsed by SIDC or the SC.

Must-know for the exam

No partnership or association of more than 20 persons may carry on business for profit unless incorporated or formed under another written law (CA 2016 s.13).
Conventional partners are jointly liable without limit for firm debts (Partnership Act 1961 s.11); a firm has no separate legal personality.
An LLP is a body corporate with separate personality; formed by two or more persons; partners are not liable for other partners' wrongs (LLP Act 2012 ss.3, 6, 21).
An LLP may run with one partner for 6 months, extendable by the Registrar to 1 year; it needs a citizen or PR compliance officer (LLP Act ss.7, 27).
A company is a body corporate with personality separate from its members (CA s.20); a constitution is optional except for a company limited by guarantee (s.31).
Private company: at most 50 shareholders (joint holders count once, employee shareholders not counted), restricted transfers, no public offers (CA ss.42, 43).
Minimum directors: 1 for private, 2 for public; natural persons aged 18 or more, ordinarily resident in Malaysia (CA s.196).
Ordinary resolution: more than half; special resolution: at least 75% with 21 days' notice; written resolutions only for private companies (CA ss.291, 292, 297).
Public company AGM within 6 months of year end and 15 months of the last AGM; 21 days' notice for an AGM, 14 for others (CA ss.316, 340).
A Participating Organisation needs at least a Head of Dealing (holds a CMSRL), Head of Operations and Head of Compliance (no CMSRL); vacancies filled within 6 months (Bursa Rules 3.18-3.35).

On this page · 5 sections

Traps that cost marks

Applying the one-director minimum for private companies to a public company.
Counting joint holders individually or including employee shareholders in the 50 limit.
Applying only one of the two AGM time limits instead of taking whichever falls first.
Thinking the Partnership Act alone governs partnership size, missing the 20-person cap in the Companies Act.
Assuming liability follows the profit-sharing ratio or capital contributed, as it does for shareholders.
Applying conventional partnership joint liability to an LLP.
Assuming all three Heads hold a dealing licence, when only the Head of Dealing does.
Thinking written resolutions are available to public companies or can remove a director.

Choosing a business structure

A sole proprietor and conventional partners carry on business in their own names, with unlimited personal liability. A partnership is the relation between persons carrying on a business in common with a view of profit (Partnership Act 1961 s.3), and each partner is jointly liable for the firm's debts (s.11). Section 13 of the Companies Act 2016 caps an unincorporated partnership or association at 20 persons.

Feature	Partnership	LLP	Company
Separate legal personality	No	Yes (LLP Act s.3)	Yes (CA s.20)
Owners' liability	Unlimited, joint (PA s.11)	Not liable for LLP obligations or other partners' wrongs (s.21)	Limited to unpaid amount on shares, or the guarantee (CA s.10)
Minimum owners	2	2 (s.6)	1 member
Size limit	20 persons (CA s.13)	None	Private: 50 shareholders (CA s.42)

Trap: assuming a partner's liability is capped at his capital or his profit share.

Takeaway: partnerships: unlimited joint liability and a 20-person cap; LLPs and companies: separate legal persons.

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Business structures and the Participating Organisation

6 min read5 sections

Must-know for the exam

No partnership or association of more than 20 persons may carry on business for profit unless incorporated or formed under another written law (CA 2016 s.13).
Conventional partners are jointly liable without limit for firm debts (Partnership Act 1961 s.11); a firm has no separate legal personality.
An LLP is a body corporate with separate personality; formed by two or more persons; partners are not liable for other partners' wrongs (LLP Act 2012 ss.3, 6, 21).
An LLP may run with one partner for 6 months, extendable by the Registrar to 1 year; it needs a citizen or PR compliance officer (LLP Act ss.7, 27).
A company is a body corporate with personality separate from its members (CA s.20); a constitution is optional except for a company limited by guarantee (s.31).
Private company: at most 50 shareholders (joint holders count once, employee shareholders not counted), restricted transfers, no public offers (CA ss.42, 43).
Minimum directors: 1 for private, 2 for public; natural persons aged 18 or more, ordinarily resident in Malaysia (CA s.196).
Ordinary resolution: more than half; special resolution: at least 75% with 21 days' notice; written resolutions only for private companies (CA ss.291, 292, 297).
Public company AGM within 6 months of year end and 15 months of the last AGM; 21 days' notice for an AGM, 14 for others (CA ss.316, 340).
A Participating Organisation needs at least a Head of Dealing (holds a CMSRL), Head of Operations and Head of Compliance (no CMSRL); vacancies filled within 6 months (Bursa Rules 3.18-3.35).

On this page · 5 sections

Traps that cost marks

Applying the one-director minimum for private companies to a public company.
Counting joint holders individually or including employee shareholders in the 50 limit.
Applying only one of the two AGM time limits instead of taking whichever falls first.
Thinking the Partnership Act alone governs partnership size, missing the 20-person cap in the Companies Act.
Assuming liability follows the profit-sharing ratio or capital contributed, as it does for shareholders.
Applying conventional partnership joint liability to an LLP.
Assuming all three Heads hold a dealing licence, when only the Head of Dealing does.
Thinking written resolutions are available to public companies or can remove a director.

Choosing a business structure

Feature	Partnership	LLP	Company
Separate legal personality	No	Yes (LLP Act s.3)	Yes (CA s.20)
Owners' liability	Unlimited, joint (PA s.11)	Not liable for LLP obligations or other partners' wrongs (s.21)	Limited to unpaid amount on shares, or the guarantee (CA s.10)
Minimum owners	2	2 (s.6)	1 member
Size limit	20 persons (CA s.13)	None	Private: 50 shareholders (CA s.42)

Trap: assuming a partner's liability is capped at his capital or his profit share.

Takeaway: partnerships: unlimited joint liability and a 20-person cap; LLPs and companies: separate legal persons.

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Every note. Every question. One pass.

3 more sections of this note are part of Premium.

Every section of every study note
Every question in every live SIDC module
Full timed mock exams
A worked explanation on every question
Your full mistake bank and weak-area review

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From ≈RM16.58/mo on the Until-you-pass pass (12 months)

Business structures and the Participating Organisation

Must-know for the exam

Traps that cost marks

Choosing a business structure

Business structures and the Participating Organisation

Must-know for the exam

Traps that cost marks

Choosing a business structure

Limited liability partnerships