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01
What is an offering of unlisted shares?
Unlisted shares are company shares that are not traded on a stock exchange. They may exist in private companies and in unlisted public companies. The issue is not only whether the shares are listed. The key questions are whether the company can offer shares to the public, who receives the offer, how it is promoted and whether capital markets laws apply.
Common scenarios
A startup wants investors, a founder posts an investment opportunity online, a Berhad offers unlisted shares, or a company raises through an ECF platform. Each route should be checked before promotion starts.
02
Sdn. Bhd.: generally cannot offer shares to the public
Section 43 of the Companies Act 2016 prohibits a private company limited by shares from offering shares or debentures to the public. It also cannot allot or agree to allot shares or debentures with the intention that they be offered to the public, and it cannot invite the public to deposit money with the company.
A Sdn. Bhd. can have investors, but it cannot market share subscriptions like a normal product. Fundraising should be checked against genuine private placement, specific recipients, conversion into a public company, or a regulated platform route.
03
What may not be an offer to the public?
Section 44 of the Companies Act 2016 explains that an offer is generally not treated as an offer to the public if it is not intended to result in securities becoming available beyond the recipients, or if it is a private concern between the offeror and the recipient.
People connected with the company
Examples may include existing members, employees, related family members, debenture holders or certain trust arrangements.
Employee share schemes
Subscriptions under an employee share scheme are treated differently from public fundraising.
Not public advertising
The broader and more public the promotion, the higher the public offer risk.
04
Unlisted Berhad / UPC: possible, but regulated
An Unlisted Public Company (UPC) is a public company whose shares are not listed on a stock exchange. The SC 2025 Guidelines explain that a UPC offering its shares does not need prior SC authorisation under CMSA section 212(5)(a), provided it complies with the Guidelines.
Retail investor offers
- General, marketing, promotion and reporting requirements apply
- Shariah-compliant shares may require a Shariah adviser
- Disclosure must be clear and not misleading
Sophisticated investor offers
- Preference shares offered to sophisticated investors may trigger SC consultation and corporate finance adviser requirements
- Sophisticated investor status must be assessed under SC guidelines
- Private placement thresholds and eligibility should not be guessed
05
Key SC Guidelines requirements
The SC Guidelines on Offer of Shares by Unlisted Public Companies (SC-GL/2-2025) apply to the UPC, its directors, advisers and agents. Offers through an SC-registered recognized market operator, such as an ECF platform, generally fall under the recognized market framework instead.
The IM must comply with CMSA and SC guideline requirements and include clear risk statements.
Promotion and sales materials must not mislead and must follow the Guidelines.
Certain cases require a corporate finance adviser to submit information to the SC.
Post-issuance notification and update reports may be required after the offering.
06
Common documents and what VSG checks first
Whether the company is a Sdn. Bhd., Berhad, or planning to convert status.
Existing shareholders, employees, specific investors, sophisticated investors or the public.
One-to-one introduction, private pitch, website, social media, public advertisement or platform fundraising.
Constitution, shareholders agreement, IM, board/member approval, SC forms, legal or corporate finance adviser.
07
Common mistakes
Treating fundraising like ordinary sales
“Invest in our company shares†is not a casual marketing phrase. It may trigger Companies Act, CMSA and SC issues.
Assuming a Sdn. Bhd. can publicly raise funds
A Sdn. Bhd. can raise capital, but public offering is a different matter.
Not checking investor status
Retail investors, sophisticated investors, connected persons and existing members may be treated differently.
No risk disclosure
Unlisted shares are less liquid and exits may be difficult. Investor risk warnings need to be clear.
08
Sources and disclaimer
- SSM: Companies Act 2016
- SC: Guidelines on Offer of Shares by Unlisted Public Companies (SC-GL/2-2025)
- SC: Guidelines on Offer of Shares by Unlisted Public Companies to Sophisticated Investors
- SC: Post-issuance Notification Form
- SC: Post-issuance Update Report
- Nazmi Zaini Chambers: Offering Unlisted Shares to the Public
This guide is for general educational purposes only and is not legal, tax, accounting, capital markets or investment advice. Any share offering, private placement, ECF, UPC offering or public promotion should be reviewed by legal and capital markets professionals.