Investment, Private Equity and Pre-IPO Legal Due Diligence in Kuala Lumpur

Naidu Chambers, in Bangsar, Kuala Lumpur, carries out legal due diligence and prepares and reviews the deal documents when money is invested in a Malaysian company: angel and venture capital rounds, private equity investments, pre-IPO rounds, and preparation for listing on the ACE Market or the LEAP Market of Bursa Malaysia.

The firm acts for:

Private equity, venture capital, family office and corporate investors taking a stake in a Malaysian company
Companies and founders raising funds from investors
Companies preparing for an ACE Market or LEAP Market listing, working alongside their Sponsor or Approved Adviser
Foreign law firms and advisers who need Malaysian counsel on a Malaysian company in a wider deal

What legal due diligence covers

Corporate records: the constitution, register of members, directors and officers, resolutions, and lodgements with the Companies Commission of Malaysia (SSM)
Share capital: every allotment, the approvals behind it, returns of allotment, pre-emptive rights, share options, convertible notes and any promise to issue shares
Ownership and control: beneficial owners, nominee arrangements, existing shareholders' agreements and restrictions on transfer
Material contracts: change of control, exclusivity, assignment and termination clauses in customer, supplier, distribution and joint-venture contracts
Borrowings and security: loan documents and security over the company's assets, and the consents a lender may need for the investment
Licences and permits the business needs, and any conditions on a change in shareholding
Property: titles, tenancies and any encumbrances
Employment: key contracts, restraint and confidentiality terms, and employee share schemes
Intellectual property: registrations and who owns what the business uses
Disputes: court, winding-up and bankruptcy searches, and claims threatened or pending
Compliance: personal data, anti-corruption policies, sector rules and related-party dealings

The deal documents

Term sheet and non-disclosure agreement
Investment agreement or share subscription agreement
Share sale agreement, where existing shares are bought
Shareholders' agreement and the amended constitution
Joint-venture agreements, and for a limited liability partnership, the partnership agreement that works as its operating agreement
Disclosure letter against the warranties
Conditions precedent, completion checklist, board and shareholder resolutions, waivers of pre-emptive rights, and the return of allotment
Convertible notes and other instruments that convert into shares later

How an investment usually runs

Term sheet. The investor and the company agree the main commercial terms and sign a non-disclosure agreement.
Scope. The investor's lawyers agree the scope of the review: a focused red-flag review or a full report.
Data room and questions. The company uploads documents and answers a due diligence questionnaire. The lawyers run searches with SSM, the courts and the Malaysia Department of Insolvency.
Report. Issues are reported with what each one means for the deal: something to fix before completion (a condition precedent), something to cover by a warranty or indemnity, or something that changes the terms.
Documents. The agreements and the disclosure letter are negotiated in parallel.
Completion. The company passes the resolutions needed. Under section 75 of the Companies Act 2016, directors need the company's prior approval to allot shares, and under section 85 new shares must first be offered to existing shareholders unless the constitution provides otherwise. The shares are allotted and the return of allotment is lodged with SSM within fourteen days under section 78.

Pre-IPO rounds and listing on the ACE or LEAP Market

The ACE Market is a sponsor-driven market. The Sponsor assesses whether the company is suitable for listing. Bursa Malaysia approves ACE Market listings and, since 1 January 2022, also registers ACE Market prospectuses. The LEAP Market is open only to sophisticated investors. A company listing there appoints an Approved Adviser, Bursa Malaysia approves the listing, and the information memorandum is deposited with the Securities Commission.

In a listing, the company's legal counsel usually sits on the due diligence working group, carries out legal due diligence on the company and its Malaysian subsidiaries, prepares a legal due diligence report and helps verify statements in the prospectus or information memorandum. Investors in a pre-IPO round should also check how the listing rules on moratorium of shares would affect them, and which of their rights under the shareholders' agreement fall away on listing. For more on this, see the firm's article on pre-IPO legal due diligence for an ACE or LEAP Market listing.

Points of Malaysian law that often come up

Shares issued without the prior approval required by section 75 of the Companies Act 2016 are void under section 75(4).
Section 123 of the Companies Act 2016 restricts a company from giving financial assistance for the purchase of, or subscription for, its own shares. Section 126 sets out a procedure that allows it for a company whose shares are not quoted on a stock exchange.
Under the Capital Markets and Services Act 2007, an offer of shares in a private company is an excluded offer (Schedules 6 and 7). Once a company becomes an unlisted public company, an offer of its shares needs a registered prospectus unless it falls within an exclusion, such as an offer to sophisticated investors.

Where these rules come from

Companies Act 2016, sections 75, 78, 85, 123 and 126: ssm.com.my
Capital Markets and Services Act 2007, sections 229, 230 and 232 and Schedules 6 and 7
Bursa Malaysia, ACE Market Listing Requirements and FAQs: bursamalaysia.com
Bursa Malaysia, LEAP Market Advisers: bursamalaysia.com
Securities Commission Malaysia, Guidelines on Submission of Corporate and Capital Market Product Proposals, and the notice on ACE Market prospectuses: sc.com.my
Malaysian Investment Banking Association, Malaysia Equity Capital Markets Due Diligence Guide (guidance, not law)

Contacting the firm

To make an enquiry, send a short note with your name, the names of the company and the other parties (so the firm can check for any conflict of interest), whether you are investing, raising funds or preparing for a listing, and the timetable. Please do not send data room documents until the firm has confirmed it can act. Every enquiry receives a reply.

Send a confidential enquiry Call +60 3-2779 5017

Updated 13 November 2026.

Frequently asked questions

What does legal due diligence involve when someone invests in a Malaysian company?

The investor's lawyers review the company's corporate records, share capital, ownership, material contracts, licences, property, employment, intellectual property and disputes. The findings shape the conditions precedent, the warranties and the disclosure letter in the deal documents.

How long does legal due diligence usually take?

It depends on the size of the company, how organised its records are and the scope agreed. A focused red-flag review is shorter than a full review for a listing, which runs alongside the financial, tax and technical work.

What is the difference between a share subscription agreement and a shareholders' agreement?

A share subscription agreement covers the investment itself: the new shares, the amount paid, the conditions precedent, the warranties and completion. A shareholders' agreement governs the relationship afterwards, such as board seats, reserved matters, share transfers and exits.

What is a disclosure letter?

A disclosure letter is a letter from the company or sellers that lists exceptions to the warranties in the investment agreement. Matters fairly disclosed in it usually cannot later found a warranty claim, so its wording is negotiated alongside the agreement.

Does a company need to prepare before a pre-IPO round or a listing?

Yes. It helps to check that every share allotment was approved and lodged with the Companies Commission of Malaysia, that the registers are complete, and that material contracts, licences and property documents can be found before the investor's or the Sponsor's due diligence starts.

General information, not legal advice.

Investment, private equity and pre-IPO legal due diligence