Is there a need to have shareholders’ agreement and constitution?
Do shareholders need a shareholders’ agreement? A shareholders’ agreement governs the relationship between shareholders of a company. Where there is more than one shareholder, it is prudent to have a shareholders’ agreement to set out their respective rights and obligations although a shareholders’ agreement is not mandatory under the law. Whether …
Voting rights of preference shares
Preference shares defined as non-voting Under the Companies Act 2016 (“CA 2016”), a preference share is a share by whatever name called, which does not entitle the holder the right to vote on a resolution or to any right to participate beyond a specified amount in any distribution whether by …
Directors’ fees – Subsidiary of newly listed public company to take note
The Case The Companies Commission of Malaysia has charged NWP Holdings Berhad (“NWP”), a company listed on Bursa Malaysia, for alleged breaches of section 230(1)(b) of the Companies Act 2016 (“CA 2016”). The charges relate to NWP’s alleged failure to obtain shareholders’ approval at annual general meeting for the directors’ …
Financial assistance: Can business owners acquire shares with the companies’ money?
The provisions under the Companies Act 2016 which have the effect of restricting business owners from using funds of companies to acquire shares of those companies catch some business owners off guard. Some business owners, who are directors and shareholders of private limited companies which they set up to carry …
Capital reduction: Why do some companies still go to court?
Under the Companies Act 2016 of Malaysia, a company which intends to carry out reduction of share capital may do so by any of the following methods unless provided otherwise in its constitution: a special resolution and confirmation by the Court (“Court Confirmation Procedure”) in accordance with section 116; or …
High Court clarified simple majority required to pass ordinary resolution in writing
Section 291(1) of the Companies Act 2016 (“CA 2016”) provides that an ordinary resolution of members or a class of members of a company means a resolution passed by a simple majority of more than half of such members who are entitled to vote and do vote, whether in person …
No mandatory requirement for a notice of directors meeting to contain specific particulars of matters to be discussed upon
It was held in the High Court case of Rozilawati bt Hj Basir v Nationwide Express Holdings Bhd & Ors [2019] 8 MLJ 8 (“Rozilawati’s case”) that as a matter of company law or the law of meetings, there is no mandatory requirement for a notice of directors meeting to …
Directors to take note: Changes under the Companies Act 2016
The Companies Act 2016 (“CA 2016”) of Malaysia repealed the Companies Act 1965 (“CA 1965”) with effect from 31 January 2017. The CA 2016 introduces some important changes relating to directors. This article highlights ten changes under the CA 2016, which directors should take note of. 1. Definition of Directors …
Key points on members’ written resolutions under the Companies Act 2016
The Companies Act 2016 of Malaysia (“CA 2016”) repealed the Companies Act 1965 (“CA 1965”) on 31 January 2017. The CA 2016 brings various changes to the way companies conduct their businesses. Some of the changes relate to the way written resolutions are passed by members of companies. Compared to …