COMPANIES ACT 2016 (Act 777)
Borrowing Corporation
Definition
"Borrowing corporation" means a corporation that is or will be under a liability, whether or not such liability is present or future, to repay any money received or to be received by it in response to an invitation to the public to subscribe for or purchase debentures of the corporation in accordance with the provisions of Subdivision 10 of Division 1 of Part III.
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Practical Explanation
A borrowing corporation is a corporation that raises funds from the public by inviting investors to subscribe for or purchase its debentures. In return, the corporation assumes a legal obligation to repay the money received, together with any agreed interest or other returns, in accordance with the terms of the debentures.
The liability to repay may be:
• Present, where the money has already been received; or
• Future, where the corporation will become liable upon receiving the subscription proceeds.
The definition applies regardless of whether the repayment obligation has already arisen or will arise in the future.
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Key Characteristics of a Borrowing Corporation
A borrowing corporation generally:
• Raises funds by issuing debentures to the public;
• Invites members of the public to subscribe for or purchase its debentures;
• Becomes legally liable to repay the borrowed funds according to the terms of the debenture;
• May also be required to pay interest or other agreed returns to the debenture holders; and
• Must comply with the relevant provisions of the Companies Act 2016 governing the issue of debentures.
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Meaning of Debenture
A debenture is a debt instrument issued by a corporation to raise funds from investors. Unlike shares, a debenture does not confer ownership in the company. Instead, it represents a contractual obligation by the corporation to repay the principal amount borrowed, together with any interest or other returns agreed under the terms of the debenture.
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Practical Example
Example 1 – Public Debenture Issue
ABC Berhad invites the public to subscribe for RM50 million worth of five-year debentures carrying an annual interest rate of 5%.
Investors subscribe for the debentures and pay the subscription monies to ABC Berhad.
Upon receiving the funds, ABC Berhad becomes a borrowing corporation because it has assumed a legal obligation to repay the principal amount and the agreed interest to the debenture holders in accordance with the terms of the debentures.
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Example 2 – Future Liability
XYZ Berhad announces a public offer of debentures, but the subscription period has not yet closed.
Although the corporation has not yet received all the subscription monies, it will become liable to repay those monies once they are received. Accordingly, the definition also covers future liabilities arising from such public invitations.
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Compliance Requirements
A borrowing corporation must comply with the applicable provisions of the Companies Act 2016 relating to the issue of debentures, including:
• Issuing debentures in accordance with the statutory requirements;
• Honouring its repayment obligations to debenture holders;
• Maintaining appropriate records relating to the debenture issue;
• Complying with the terms and conditions governing the debentures; and
• Observing any additional requirements imposed under applicable securities laws and regulations.
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Importance
The concept of a borrowing corporation is important because it:
• Identifies corporations that raise capital through debt financing from the public;
• Protects the interests of debenture holders by recognising the corporation's legal repayment obligations;
• Promotes transparency and accountability in public fundraising activities;
• Supports investor confidence by ensuring compliance with statutory requirements; and
• Establishes the legal framework governing public debt financing under the Companies Act 2016.
《2016 年公司法》（第 777 号法令）
借款公司（Borrowing Corporation）
定义（Definition）
借款公司”（Borrowing Corporation）** 是指根据《2016 年公司法》第三编第一分部第十细分部（Subdivision 10 of Division 1 of Part III）的规定，向公众发出认购或购买公司债券（Debentures）邀请，并就已收取或将收取的款项承担现时或未来偿还责任的法人团体（Corporation）。
实务说明（Practical Explanation）
借款公司是指通过邀请公众认购或购买其公司债券（Debentures）向公众筹集资金的公司。作为交换，该公司依法承担按照公司债券条款偿还所收取资金，并支付约定利息或其他收益的法律责任。
现时责任（Present Liability）**：公司已收取认购款项，并已承担偿还责任；或
未来责任（Future Liability）**：公司尚未收取全部认购款项，但于收款后即须承担偿还责任。
因此，无论偿还责任已经产生或将于未来产生，均属于本定义的适用范围。
借款公司的主要特征（Key Characteristics of a Borrowing Corporation）
借款公司一般具有以下特征：
- 通过发行公司债券向公众筹集资金；
- 邀请公众认购或购买其公司债券；
- 根据公司债券条款承担偿还借款本金的法律责任；
- 可能须向债券持有人支付利息或其他约定回报；以及
- 必须遵守《2016 年公司法》有关发行公司债券的相关规定。
公司债券（Debenture）** 是公司向投资者发行的一种债务融资工具，用以筹集资金。 与股份（Shares）不同，公司债券**不会赋予持有人公司的所有权**。相反，它代表公司依据债券条款，对投资者承担偿还借款本金及支付约定利息或其他回报的合同义务。
例子一：公开发行公司债券
ABC Berhad 向公众发行总值 **5,000 万令吉**、期限五年、年利率 **5%** 的公司债券。
投资者认购债券，并将认购款支付予 ABC Berhad。
自收取认购款项起，ABC Berhad 即成为**借款公司（Borrowing Corporation）**，并依法须根据债券条款向债券持有人偿还本金及支付约定利息。
XYZ Berhad 公布公开发行公司债券，但认购期尚未结束。 虽然公司尚未收取全部认购款项，但一旦收取有关款项，即依法承担偿还责任。 因此，《2016 年公司法》所称的借款公司，亦包括因公开邀请认购公司债券而将于未来承担偿还责任的公司。
合规要求（Compliance Requirements）
借款公司必须遵守《2016 年公司法》有关发行公司债券的规定，包括：
- 依照法定要求发行公司债券；
- 按照债券条款履行偿还债券持有人的责任；
- 保存有关公司债券发行的完整记录；
- 遵守公司债券的各项条款及条件；以及
- 遵守适用的证券法律、法规及监管要求。
《2016 年公司法》对**借款公司（Borrowing Corporation）**作出定义，具有以下重要意义：
- 明确识别通过向公众发行债务工具筹集资金的公司；
- 确认公司对债券持有人承担法定偿还责任，保障债券持有人的权益；
- 提高公开集资活动的透明度及问责性；
- 增强投资者信心，确保公司遵守法定规定；以及
- 建立《2016 年公司法》下有关公开债务融资的法律框架。
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Posted by DSA Corporate Secretarial Services Sdn Bhd on 30 Jun 26
Malaysia
