LDD helps buyers identify risks that may affect valuation, deal structure, and in some cases, the decision to proceed with the transaction.

Here’s what buyers typically prioritise – and why it matters for both sides.

1. Ownership & Corporate Records

• Whether the seller truly owns the shares/assets being sold?
• Are corporate secretarial records complete, updated, and accurate?
• Any missing paperwork that may attract a penalty from any relevant authorities?
• Buyers often rely on clean and consistent records to assess risk.

2. Contractual & Commercial Obligations

• Buyers typically look into key customer and supplier contracts.
• Any contracts requiring approval for a change of control?
• Vague termination provisions and unfavourable terms in contracts may be seen as red flags.
• Contracts with revenue concentration are especially scrutinised.

3. Compliance & Regulatory Issues

• Whether the target company possesses valid licences, permits, and sector-specific approvals.
• Any past or ongoing breaches of law, enforcement actions or investigations by relevant authorities?
• Buyers are concerned as compliance gaps can impact business operations post-completion.

4. Liabilities

• Does the target company take out any loans or provide guarantees?
• Any past or ongoing disputes (e.g. litigation cases, employment / industrial disputes)?
• Buyers want visibility into the potential liabilities and exposures so they do not inherit “unknown” surprises.

Smooth and organised LDD equates to a smoother negotiation process.

The more prepared the seller/target company is, the shorter the journey to signing and completion of the transaction.

In Essence:

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

In Malaysia, a members’ meeting serves as the primary forum for decision-making by shareholders and the exercise of their rights.

Generally, a member is entitled to request that a members’ meeting be held, subject to compliance with the requirements under the Companies Act 2016 (“CA 2016”) and the company’s constitution.

These members’ meetings are vital because there are matters of utmost significance that often require sanction or approval from the members under, amongst others, the CA 2016. For example, under Section 223(1)(b) CA 2016, the disposal of a substantial portion of the company’s property is not to be carried into effect unless the disposal has been approved by the members.

Quorum Requirements: The Potential Abuse

Pursuant to S.328(1) – (2) CA 2016, the default requisite quorum for a members’ meeting is two members (save for a single-member company), unless otherwise provided in the company’s constitution.

In a scenario where there are only two members, a deadlock may occur when one of the two members deliberately refuses to attend the meeting, thereby resulting in the lack of the requisite quorum for the meeting to convene.

This will give rise to a decision-making deadlock.

Pursuant to S.328(4) – (5) CA 2016, without the requisite quorum, no business shall be transacted, and the meeting shall be either dissolved or adjourned.

What happens if a resolution is passed without the requisite quorum? 

The Federal Court affirmed the Court of Appeal’s decision to validate the share issuances, but did so on a different basis – relying on the specific statutory provisions under S.63 and/or S.355 CA 1965.

In Malaysia, it has been held by the Courts[1] that a meeting convened without the requisite quorum would be a nullity, rendering any resolution passed in the said meeting to be invalid.

Without the requisite quorum to convene the meeting, this may jeopardise the company’s operation due to the inability to pass a resolution to, amongst others:

• approve directors’ remuneration;
• appoint the company’s auditor;
• approve the company’s annual audited financial statements;
• reappoint the directors who are retiring.

What is designed as a procedural safeguard, if misused, may be deployed by a minority member as an instrument of obstruction capable of paralysing the company’s operations.

Judicial Intervention: The “Impracticability” Test

In such a scenario, an aggrieved shareholder cannot be left without recourse.

Under S.314 CA 2016, the Court may order a meeting to be called in any manner that the Court thinks fit, including a direction that the presence of a single member shall be deemed to constitute a sufficient quorum. (See: S.314(2) & (4) CA 2016).

That said, such a remedy is not available as of right. The Court generally expects the members to first exhaust the internal mechanisms under the CA 2016.

Judicial intervention under S.314 CA 2016 will typically only be invoked where it is impracticable to convene or conduct a meeting in the usual manner (See: S.314(1) CA 2016).

This raises the critical question: what amounts to “impracticable”?

It has been held that impracticability is not narrowly confined. It will “cover a potentially wide range of factual situations, including but not limited to a case where the members have deliberately failed to attend a general meeting so that a proper quorum cannot be constituted…”[2]

Quorum provisions, after all, are not intended to operate as a veto mechanism in the hands of a minority where a deadlock exists.

In Tamabina Sdn Bhd & Anor v Nakamichi Corporation Berhad [2016] 10 CLJ 148, the Malaysian Court of Appeal held that:-

“[22]… to show impracticability it is necessary to show evidence of attempts or efforts to call and hold a meeting and such attempts or effort have been futile. The reason for the futility in calling or holding a meeting must be attributed to some circumstances that make it almost impossible to hold the meeting. These circumstances could be due to a deadlock situation, an intentional un-cooperative attitude of the directors, a persistent effort to derail the meeting or deliberate non-attendance at meeting after a proper and valid notice had been issued so as to force the meeting to be called off for want of quorum. The categories of such reasons are never closed.”

Lee Yee Wuen v Kien Yiap Trading [2020] 1 LNS 236

• The Court affirmed that a minority cannot use the quorum provisions as a ‘veto’ to deny the majority’s rights.

Abdul Halim bin Mutaref v ALM Autoserve Sdn Bhd & Anor [2023] MLJU 2358

• The Court intervened where a shareholder’s acknowledged “deliberate refusal to attend the meeting” resulted in a lack of quorum, thereby creating an impasse.

Golden Crescent v PDC Associates [2025] CLJU 915

• Judicial intervention was warranted as the Court found strong evidence of a genuine deadlock arising from a member’s “systemic non-attendance at properly noticed meetings”.

Alternative to Members’ Meeting: Written Resolutions

Under the new CA 2016, members of a private company may pass resolutions by way of a written resolution, without the need to convene a members’ meeting. This is governed under, amongst others, S.297 to S.308 CA 2016.

A key advantage to this mechanism is that it is not subject to the quorum requirement[3], unlike the resolutions sought to be passed in a members’ meeting.

In the circumstances, where a company is unable to pass a resolution due to the inability to convene a valid meeting for want of quorum, it may consider utilising the written resolution procedure.

This provides a practical alternative mechanism to effect members’ decisions without the need for a meeting.

That said, this remains subject to the company’s constitution, which may modify or restrict the use of written resolutions and compliance with any applicable legal requirements.

Looking Ahead: Other Possible Instances

Quorum-related deadlock is only one of several challenges that may arise in convening meetings. Other scenarios where a meeting cannot be convened may include, amongst others, a director’s refusal to convene a meeting requested by the members – an issue we will explore in a future article.

[1] Geointelligence Sdn Bhd v Azhar bin Hj Ismail & Anor [2022] MLJU 2881; 
Lee Nyuk Heng & Anor v Pembangunan Ladang Hassan Sdn Bhd & Ors [2002] MLJU 684

[2] Tan Swee You v Sahiron bin Mohd Yunus & Anor [2021] MLJU 2244, para [28]

[3] LGB Engineering Sdn Bhd & Ors v Rayston Resources Sdn Bhd [2023] 1 MLJ 649

Our Dispute Resolution practice specialises in high-stakes civil, commercial and corporate disputes, including shareholders’ litigation, breach of contract, and debt recovery. We have experience representing clients at all levels of the Malaysian Courts and in domestic arbitration, providing strategic and commercially sensible solutions to complex legal challenges.

If you require advice or representation in a legal dispute, please reach out to our team via our contact page.

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

If you found this article useful, please feel free to download the PDF document in the link here.

Unilever and McCormick & Company (“McCormick“) have announced an agreement to combine Unilever Foods business with McCormick, in a transaction valuing the business at approximately US$44.8 billion. The proposed transaction will see Unilever and its shareholders receive a majority equity stake in the combined entity, forming a global flavour-focused company with significant scale across retail and food service channels.

Structurally, the transaction is expected to be implemented through a Reverse Morris Trust arrangement, enabling a tax-free separation of Unilever Foods business for US federal income tax purposes while combining it with McCormick’s existing operations. This reflects a growing trend of strategic carve-outs and business separations in large-scale M&A, particularly where conglomerates seek to enhance portfolio focus in a tax-efficient manner.

Taken together, the proposed combination highlights how complex deal structuring and tax considerations remain central to executing large-scale transactions.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

In this M&A Byte, it explains the early seller preparations, which typically include:

• Clean and updated corporate records
• Well-reviewed contracts with key risk clauses identified
• Clear financials and managed liabilities
• Consistent HR and operational compliance

Strong housekeeping isn’t administrative hygiene; it is a commercial advantage.

Here’s how sellers can prepare.

1. Update Corporate Records & Documents

• Ensure statutory books, registers, resolutions and corporate secretarial documents are accurate and updated.
• Accuracy in corporate records prevents back-and-forth during legal due diligence.
• Clean records help sellers present a more reliable and organised corporate profile.

2. Review Key Contracts

• Identify crucial clauses such as change of control, exclusivity and liabilities clauses.
• Check for auto-renewals, termination mechanics or obligations material to the buyer.
• Well-structured contracts reduce risk and build buyer confidence.

3. Clean Up Financials & Liabilities

• Ensure tax filings, statutory payments, and outstanding obligations are up to date.
• Buyers value transparency – clean financials help reduce risk on deal certainty.

4. Strengthen HR & Operational Compliance

• Ensure proper and consistent records of employment contracts, payroll, and EPF/SOCSO compliance.
• Missing documentation is frequently raised as a red flag in legal due diligence.

“Deal readiness” is not just about good housekeeping – it strengthens the seller’s negotiation position and helps build trust with buyers.

In Essence:

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Luckin Coffee, China’s largest coffee chain, through its controlling shareholder Centurium Capital, is reportedly set to acquire the global café operations of Blue Bottle Coffee from Nestlé, valued at under US$400 million. If completed, the deal would combine Luckin’s technology-driven, high-volume coffee model with Blue Bottle’s premium specialty coffee brand and established international retail presence.

The proposed transaction also reflects a broader trend in consumer-sector M&A, where high-growth brands pursue acquisitions of established premium labels to diversify their brand portfolio and tap into new consumer segments. It also highlights how cross-border acquisitions continue to play a key role in global brand expansion, particularly in competitive consumer markets, such as specialty coffee.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

This M&A Byte maps out:

• The core documents in a typical deal
• When they appear in the transaction lifecycle
• Why each one matter

Phase 1: Setting the Foundation 

Phase 2: The Discovery & Core Agreements

Phase 3: Completion & Closing Mechanics

Phase 4: Post- Completion 

Every M&A deal is built on a suite of documents, each shaping the deal, defining risks and guiding decisions.

Understanding the purpose and interplay of these documents is essential for smooth execution, effective risk management and informed decision-making.

In Essence:

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Every business acquisition starts with a critical question: Are you buying the company, or just the assets that matter to you?

• In a Share Sale, you acquire shares in the company — this may be 100% of the shares (full control) or a partial share sale. In either case, you take on the company’s assets, liabilities, contracts and its full corporate history.
• In an Asset Sale, you selectively acquire only the assets and operations you want, leaving the rest with the Seller.

Key Differences between Share Sale & Asset Sale:

Pros & Cons for Buyer and Seller:

Choosing between Share Sale and Asset Sale is more than just a technical decision – it affects your legal exposure, tax implications, operational control and transaction complexity.

In Essence:

Disclaimer: The content of this article is intended for general informational purposes only and does not constitute formal legal advice.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Meta, which operates major social media platforms including Facebook, Instagram, WhatsApp and Threads, has acquired Manus AI, a Singapore-based AI start-up founded by Chinese entrepreneurs, in a transaction reportedly valued between US$2 – 3 billion. Manus is known for its autonomous general-purpose AI agents capable of executing complex tasks with minimal human input, making it a strategic addition to Meta’s AI ecosystem.

The deal has also drawn post-acquisition regulatory scrutiny, with Chinese authorities reviewing whether Manus’s AI technologies developed in China fall under national security or export control regulations, highlighting the geopolitical and legal complexity of cross-border AI M&A.

Taken together, this development demonstrates the strategic potential of autonomous AI acquisitions while highlighting the regulatory and geopolitical risks they entail.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.

Netflix has recently announced its proposed acquisition of Warner Bros. Discovery, valued at approximately US$82.7 billion (“𝗣𝗿𝗼𝗽𝗼𝘀𝗲𝗱 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻”), merging a content powerhouse with a leading streaming platform and reshaping the global entertainment landscape.

While the Proposed Acquisition marks a landmark moment for the industry, it has also triggered a consumer-led competition law challenge, raising regulatory concerns over market concentration and reduced competition in the US subscription video-on-demand market, particularly through the elimination of HBO Max as a significant competitor of Netflix.

Taken together, this development underscores the heightened regulatory and legal risks associated with mega-mergers in the digital entertainment space.

Our Corporate team regularly advises local and international corporations on mergers and acquisitions (M&A), cross-border transactions, joint ventures, and corporate restructuring. We also provide comprehensive support for shareholders’ agreements and general commercial advisory to help businesses navigate the Malaysian regulatory landscape.

For legal assistance or further inquiries regarding your corporate matters, please feel free to contact us.