Thursday, February 25, 2010

3 Types Of Business Organizations


Today, the Business Law lecture class was talking about company law. Before go deeply in the company law, we have to understand about the company organization. There are 3 types of the business organizations we were learnt in the class which are:

  1. Sole Proprietorship
  2. Partnership
  3. Corporation

Sole Proprietorship is a least expensive and easiest method to start a business. Why it is easy to start a business? This is because we just need to find a location for the business and open the door to start the business. Before start the business, we have to register a business name and obtain a business license from the government.

There are 2 types of partnership which are limited partnerships and general partnerships. At least 2 people are needed to form a general partnership through a simple oral agreement. Yet, start a partnership with an oral agreement is not recommended. Therefore we have to get legal documents drawn up by an attorney. The advantage for having a legal partnership drawn up is the document will help us in solving any future business disputes with the partner. The disadvantage of partnership is a partner can be held responsible for the actions of other partner in the business in addition to their own actions.

Some of the important information should include in a partnership agreement:

  • The compensation for partners.
  • How long will the partnership last.
  • How will the profits or loss be divided?
  • What type of business is it?
  • What is each partner investing into the business?
  • If the partnership dissolves how will assets be distributed?
  • A settlement clause for disputes.
  • Provisions for dissolution of the partnership.
  • Provisions for future changes to the partnership.
  • Define any restrictions to expenditures or authority.
  • Provisions for death or incapacity.

The structure of a corporation is complex. It is very expensive to operate compare to sole proprietorship and partnership. Corporate control lies with the person who has ownership of the most shares of stock. For instance, if a single stockholder or a group of stockholders own at least 51% of the stock they can make decisions of policy. Corporations will have annual meetings with the stockholders and regularly scheduled meetings for the board of directors with records kept to document their decisions. The size of the corporation will affect how formally or informally it can be operate. For example, smaller corporations might operate less formally, but still need to keep proper documentation. Stockholders can hold officers of corporations liable for any actions which might have been improper. In those kinds of cases stock ownership is generally where the liability is limited to unless there was a fraud committed. An attorney can help us to decide incorporate as either a C or S type corporation.

Prepared by,
Fong Yok Yan (1071120015)

Tuesday, February 23, 2010

Contract for Insurance

Last week is Chinese New Year Holidays, therefore no lecture and tutorial class for Business Law. And today tutorial class will continue discuss the Law of Contract.

1 of the interesting part of Law of Contract I learnt in the business law class is Contract by Minors.

In Malaysian law, the age of majority is 18 years old. For those are below 18 years old, they should lack legal capacity to contract except:
i. Contracts for necessaries
ii. Contracts of scholarship
iii. Contracts of insurance

Today, I want to talk about Contracts of insurance. Based on my own experience, I bought insurance when I was 15 years old.

The insurance I bought is a medical insurance which I can get compensation if I have any health problem. Every conditions of the contract must be agreed with my family especially my parent. After my family agreed, I only decided to sign the contract and the contract became valid.

Before this, I never think that age will be an important factor to make a contract because I thought that everyone can make a contract. After attend the business law class, I realize a minor can enter into a contract with several conditions. For instance, a minor can enter into insurance contract with the insurance company under Insurance Act 1963 (Revised 1972). However, if the minor is below 16 years old, he or she can only make insurance contract after taking written consent from his or her parents or guardians.

This means that if that time my parent do not consent I bought the insurance, the insurance contract does not legal although I already agreed with the conditions. This is because it was not fulfill the requirement in Malaysian Law. Therefore, the agent of the insurance company should be very careful when they settle the contract because the insurance company lose money and sue by the client if the agent makes any mistake in the contract with a minor.

Prepared by,
Fong Yok Yan (1071120015)

Sunday, February 14, 2010

Public Holidays in Malaysia

Today is Chinese New Year which is 1 of the important celebration for Chinese. Most of the people in Malaysia include Malay, Chinese and Indian were went back their hometown. This is because they want to celebrate this wonderful celebration with their family.

Public holidays can be celebration of commemorative day such as Independence Day, or celebration such as Chinese New Year, Hari Raya Puasa and Deepavali, or to celebrate Royalty like Agung’s Birthday.

During the public holidays, a lot of employees do not need to work. This is because they are protected by the law which is Employment Act 1955 Section 60D.

Every employee shall be entitled to paid holiday at his ordinary rate of pay on the following days in any 1 calendar year:

a. On 10 of the gazette public holidays, 4 of which shall be:
i. The National Day
ii. The Birthday of the Yang di-Pertuan Agong
iii. The Birthday of the Ruler or the Yang di-Pertua Negeri of the State or the Federal Territory
Day; and
iv. The Workers’ Day; and

b. On any day declared as a public holiday under Section 8 of the Holidays Act 1951

If a public holiday falls on a rest day the working day following immediately the rest day shall be a paid holiday in substitution.

Any employee who absents himself from work on the working day immediately preceding or immediately succeeding a public holiday shall not be entitled to any holiday pay for such holiday.

For any overtime work carried out by an employee on a paid public holiday, the employee shall be paid at a rate which is not less than 3 times his hourly rate of pay.

As a resident in Malaysia, I feel very proud of it because Malaysia has many holidays. And those holidays are having different meaning to celebrate it. This is not every country will has welfare but it is in Malaysia. Therefore, I feel very proud of myself because I am a Malaysian.

For this few days holidays, I wish all the Malaysian have a wonderful holidays with their family and wish all the couples Happy Valentine Day.


Prepared by,
Fong Yok Yan (1071120015)

Friday, February 12, 2010

Gambling and Wagering in Malaysia

Happy Chinese New Year 2010
A very important festival for Chinese is coming soon which is Chinese New Year. Gambling and wagering during Chinese New Year is quite common and always happened in Malaysia. I would like to advise those people who involve in gambling or wagering they should refrain themselves because someone participates in gambling and wagering may be will violates the Malaysian Law.

Gaming and wagering is a strictly regulated activity in Malaysia. All of the residents in Malaysia should follow the law. However, some of the gaming and wagering is permitted by licensing or exemption.

The following is a plethora of statutes that regulate gaming activity in Malaysia:
  1. Pool Betting Act
  2. Betting Act
  3. Lotteries Act
  4. Common Gaming Houses Act
  5. Racing (Totalisator Board) Act
  6. Racing Clubs (Public Sweepstakes Act)

The specialized gaming and wagering revenue collection statutes are shown as following:

  1. Gaming Tax Act
  2. Betting and Sweepstakes Duties Act
  3. (Pool betting duty collection is provided in the Pool Betting Act)
  4. (Lottery duty collection is provided in the Lotteries Act)

Furthermore, repealed statutes on gaming and wagering which are the following:

  1. Social Welfare Lotteries ActGaming
  2. Ordinance of Sabah (Cap.50)
  3. Gambling Ordinance of Sarawak (Cap.138)
There are several corporations or clubs in Malaysia that are licensed to conduct gaming and wagering which are:
  1. Tanjong plc (its subsidiary Pan Malaysian Pools S/B)
  2. Pan Malaysian Sweeps S/B
  3. Selangor Turf Club
  4. Perak Turf Club
  5. Penang Turf Club
  6. Sports Toto Malaysia Bhd
  7. Magnum 4D Berhad
  8. Sandakan Turf Club
  9. Everise Ventures S/B
  10. Royal Sabah Tuft Club
  11. Keningau Turf Club
  12. Sarawak Turf Club
  13. Natural Avenue S/B
  14. Lotteries Corporation (88) S/B

Besides that, some of the substantive management and operational matters are also relavent which are:

  1. Game branding
  2. Game design
  3. Prize payout structure
  4. Retial outlet designRules & regulations of games
  5. On-line computer vendor identification & negotiations
  6. Gaming software contract negotiations
  7. Training modules for staff
  8. Result-drawing machine vendor identification
  9. Drawing procedures
The above information is I get from a blog. This is because I think that the information is quite interesting so I want to share it with my friends. And I also have thanks for the blog's owner because he share some interesting information on his blog.

At the same time, I wish all the Chinese and non Chinese will have a nice day during the Chinese New Year celebration.

Prepared by,
Fong Yok Yan (1071120015)

Tuesday, February 9, 2010

Case in Tutorial Class

Today, the tutorial class was discussed about Law of Contract. All of the students have to form a group in 5 to 6 person. The question for my group to answer is same as the following:

Chong and Wei went shopping and decided to shop at Super Supermarket. Wei looked at the goods which were on display and decided to purchase three bottles of face cream which were on offer. She took the bottles to the counter where she paid for them. As they were leaving the supermarket, the cashier came up to them and told them that they have to return the goods. Advise Wei according to Contracts Act 1950 and relevant decided case(s).

The issue in this situation is there are a legally binding agreement between Wei and the Super Supermarket. Should Wei return back the goods to the supermarket?

In this case, it is an invitation to treat because the goods were displayed in the supermarket. The relevant case is Fisher v. Bell. The display of any goods with a price tag on it in a shop was not an offer but rather it was an invitation to treat.

When Wei is accepted the invitation, the situation is change to become an offer. Based on the Section 2(a) of the Contracts Act, the supermarket is offering Wei the face cream when the cashier is accepted the money from Wei. The relevant case can used in this situation is Pharmaceutical Society if Great Britain v. Boots Cash Chemist. In this situation, when Wei took the bottles, she offers to buy them and the sale will take place at the cashier’s desk if the cashier accepts the price.

Since Wei is accepted the offering from the supermarket and refer to the Section 2(b) of the Contract Act 1950, the offering become a promise. In Section 7(a) of Contract Law 1950, the acceptance must be absolute and unqualified so that there is complete consensus.

Based on Section 5 of Contracts Act 1950, an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. The relevant case is Byrne v. Van Tienhoven. In this situation, the supermarket should not take back the goods and the revocation is not effective.

Based on those sections of Contract Law, there is a legal binding agreement between Wei and the supermarket. Wei should not return the goods to the supermarket.

Prepared by,
Fong Yok Yan (1071120015)

Sunday, February 7, 2010

Can Someone Sue Advertiser Based On An Unfulfilled ‘Promise’ as Advertised

The last thursday lecturer class is talk about the law of contract. Most of the interesting part of this chapter is can someone sue advertiser based on an unfulfilled ‘promise’ ad advertised. It reminds me about the Ribena’s case which is 2 schoolgirls found there’s no Vitamin C in Ribena.

The following is the new that posted on 27th March 2007.

Schoolgirls find there's no C in Ribena
March 27, 2007

Global drugs giant GlaxoSmithKline was forced into another embarrassing admission today after two 14-year-olds from New Zealand found its popular blackcurrant drink Ribena contained almost no vitamin C.

Last week, GlaxoSmithKline made a similar admission to the Australian Competition and Consumer Commission (ACCC) on the basis that its drinks contained "significantly less" Vitamin C than what was claimed.According to New Zealand news web site stuff.co.nz, the company today admitted that its cartoned Ready To Drink Ribena which it claimed had 7mg of Vitamin C per 100ml in fact had no detectable Vitamin C content.

Glaxosmithkline will be sentenced this afternoon.High school students Anna Devathasan and Jenny Suo tested the children's drink against advertising claims that "the blackcurrants in Ribena have four times the vitamin C of oranges" in 2004.

Instead, the two found the syrup-based drink contained almost no trace of vitamin C, and one commercial orange juice brand contained almost four times more than Ribena.

"We thought we were doing it wrong, we thought we must have made a mistake," Devathasan, now aged 17, told New Zealand newspapers of the school experiment.A GSK spokeswoman in Britain, which is the lead market for Ribena, said the company had been in discussion with the New Zealand Commerce Commission regarding Vitamin C levels and the way these levels had been communicated in New Zealand.

"GSK has conducted thorough laboratory testing of Vitamin C levels in Ribena in all other markets," the spokeswoman said.

"This testing has confirmed that Ribena drinks in all other markets, including the UK, contain the stated levels of Vitamin C, as described on product labels."

Ribena, first made in the 1930s and distributed to British children during World War II, is now sold in 22 countries.

GSK paid little attention to the claims of Devathasan and Suo until their complaints reached the commerce commission.

But it now faces 15 charges related to misleading advertising in an Auckland court, risking potential fines of up to $NZ3 million ($2.65 million).

From this case, we can realise that advertiser must have their responsibility in advertising. There should not mislead and provide incorrect information to their consumers. For an example, the blackcurrants in Ribena have four times the vitamin C of oranges, but in this case, we realise that there is some contradiction between the advertisements and real situation. This behaviour already affect Ribena’s reputation and company image in their consumers’ mind.

I think that the Ribena’s case can be an alert to another company. Therefore, the company does not think that they no necessary have the responsibility on their advertisement. The company should be careful for their advertisement, thus the advertisements do not mislead or provide incorrect information to consumers. This is good news for all consumers.

Prepared by,
Fong Yok Yan (1071120015)

Wednesday, February 3, 2010

Court For Children

In the tutorial class, our lecturer discussed a case study with us. This case is related with court for children.

Children should get punishment if they are commit crime?

What are their right if they become a criminal?


What is Court for children and what is the act to protect them?

The Court for Children or Juvenile Court is specified in cases for children that are governed by Child Act 2001. Section 2 of the Act states that child can be defined as any person below the age of 18 years, and for the purposes of criminal proceedings, means a person who has attained the age of 10 years.

The Child Act 2001 is served to consolidate the Juvenile Courts Act 1947, the Women and Young Girls Protection Act 1973, and the Child Protection Act 1991. This is to enact partially in order to fulfill Malaysia’s obligations under the United Nations Convention on the Right of the Child.

We have to protect those children because children are pillar of a country. We need to have a correct method to induce the children so that they will have a correct living concept. Therefore, the law cannot treat the children as adult and give them second chance.

Unfortunately, the children are more over in their behaviour. Some of them were committed a serious sin which is murder. If we too protect them by law, they will despise the law. But, the punishment applied on the children is too heavy, the children’ mental growth will grow in incomplete. May be, they will revenge to the society by their offence such as vandalism, continuous crime and the like. This attitude may disorder our society.

There are a lot of reasons to explain why the children become a criminal such as stress, learn from the movie and so on. But this cannot be the excuses for them to be a criminal. I hope that those children can be mature and do not so those behaviour. This is because their behaviour may hurt themselves and their parent.

Prepared by,
Fong Yok Yan (1071120015)

Monday, February 1, 2010

Panel Section 377a and 377b

This is 1 of the case our lecturer showed us during the lecturer class.
Man fails in bid to legalise sodomy

PUTRAJAYA: A Kuala Lumpur City Hall worker convicted of 22 counts of sodomy wants the Court of Appeal to declare as unconstitutional the provision that criminalised the act.

Abdul Rahim Abdul Rahaman contended that it was biased against the male gender.

The submission was made by Abdul Rahim’s counsel Fahri Azzat in his appeal to set aside the 60-year jail term and 22 strokes of rotan meted out to him by the Shah Alam Sessions Court in 2007.

However, Abdul Rahim — a HIV patient — failed to convince Jus­tices Datuk Suriyadi Halim Omar, Datuk Hasan Lah and Datuk Ahmad Maarop who dismissed his appeal and upheld his sentence.

Fahri argued that Sections 377A and 377B of the Penal Code which make committing carnal intercourse against the order of nature a crime infringed Article 8 (1) and (2) of the Federal Consti-tution, which states that all persons should be treated equally and prohibits discrimination against citizens.

He said a scrutiny of Section 377B clearly showed that the provision only applied to males because it referred to a person introducing his male organ into the anus or mouth of another person.

Fahri said the provision so narrowly define “carnal intercourse against the order of nature” that only males could be charged with such an offence.

If a woman uses a vibrator to penetrate a man’s anus and she derives sexual pleasure from it, would that not be ‘carnal intercourse against the order of nature’ in the ordinary sense of the word?” he said.

Fahri argued that the section invaded the right to privacy provided under the Federal Consti­tution as it criminalised consensual sexual acts between two persons.

This led Justice Suriyadi to ask: “Are you saying that homosexuals among consenting adults is legal? In other words, what happens in the bedroom is none of the Government’s business?”
Abdul Rahim, 39, pleaded guilty to committing the offences at a flat in Gombak in Selangor between April 18 and May 8, 2007.

Deputy Public Prosecutor V. Shoba submitted that the argument on the constitutionality of the sections was unfounded, noting that the victim was a 15-year-old boy, who, according to the law, was incapable of giving consent to such an act. — Bernama

This case had argues about carnal intercourse against the order of nature. Actually this issue is quite interesting because a lot of people do not realise what they done on the bedroom may contrast with the law in our country although it is only applied on man.

What is Panel Code Section 377a and Section 377b? I think this is a lot of people feel curious about this 2 Panel Code. This is because this 2 Panel Code control them when they are in orgasm.

Panel Code Section 377A - Carnal intercourse against the order of nature.
Any person who has sexual connection with another person by the introduction of the penis into the anus or mouth of the other person is said to commit carnal intercourse against the order of nature.
Explanation - Penetration is sufficient to constitute the sexual connection necessary to the offence described in this section.

Panel Code Section 377B - Punishment for committing carnal intercourse against the order of nature.
Whoever voluntarily commits carnal intercourse against the order of nature shall be punished with imprisonment for a term which may extend to twenty years, and shall also be liable to whipping.

I think those panel codes are very important to everyone especially man because they have to think before do. If they not concern about it, they may be have to pay for their behaviour.

Prepared by,
Fong Yok Yan (1071120015)