1. ) LOH SIEW CHOONG 2. ) LOH SIEW NGOH 3. ) LOO KIM LIN @ LOH SIEW LIN v 1. ) TOONG YUEN (IPOH) SDN BHD 2. ) LOH FOOK WAH @ LOH FOOK FAH 3. ) LOH KWOK YUAN 4. ) AHMAD RIZAM BIN ZAMRI 5. ) MUSTAFA BIN BAHARUDIN 6. ) TEH CHEE YIP 7. ) MEOR MUHAMMAD HAFIFI BIN HAMZAH

Case Significance

Illustrates the transmission-versus-transfer distinction under section 109 of the Companies Act 2016: an executor takes a deceased member's shares by transmission, but registering the beneficiaries requires a proper instrument of transfer and stamp duty, which the company was entitled to insist upon.

This High Court decision at Ipoh concerns the distinction between the transmission and the transfer of shares on the death of a shareholder, and a company's refusal to register beneficiaries as members. The plaintiffs, beneficiaries under the will of a deceased shareholder of the first defendant, Toong Yuen (Ipoh) Sdn Bhd, sought orders relating to the registration of shares in the company. The executor had obtained probate and had caused a partial transfer of shares to one beneficiary, with stamp duty paid, but later requested that the remaining shares be registered in the names of the other beneficiaries without a Form 32A instrument of transfer and without stamp duty; the company refused registration. The questions were whether the devolution of the shares from the deceased to the beneficiaries constituted a transmission or required a separate transfer, whether the executor's assent perfected a transmission, whether the company's articles of association restricted the registration of beneficiaries except through a proper instrument of transfer, whether the directors could exercise a discretion in registration, and whether the court could override the mandatory requirements of the Companies Act 2016 and the articles. The court explained that an executor acquires the shares by transmission under section 109 of the Companies Act 2016, but that the onward vesting of those shares in the beneficiaries required a proper instrument of transfer rather than mere assent, so that the company was entitled to insist on the correct instrument and stamp duty and to refuse registration in its absence; a contrary construction risked breaching the members-limit rule. The court also noted that the authenticity of the will was in issue in separate proceedings, which the originating summons would have to abide, and it dismissed the application, the plaintiffs' lack of established beneficial entitlement providing an independent ground. The judgment is a useful illustration of the transmission-versus-transfer distinction under the Companies Act 2016.