Matters requiring shareholders’ approval for PLC
Which corporate actions undertaken by public companies listed on the Main Market or ACE Market of Bursa Malaysia (“PLC”) require shareholders’ approval? A PLC is required under the Listing Requirements to obtain shareholders’ approval for, among others, the following: 1. Issuance of securities by the PLC including rights issue, bonus …
Directors’ and shareholders’ powers
Ever wonder which corporate actions require board of directors’ approval and which require shareholders’ approval? This depends on the division of management powers between directors and shareholders of a company. Sources of powers The main sources which set out and divide the management powers between directors and shareholders are as …
How to verify allotment and issuance of shares
Investors who want to invest in a company in Malaysia would want to know that the issuance and allotment of the shares in a company since incorporation have been duly authorised and lodged with the Registrar. What do you need to check to verify that? The documents you need to …
Checklist for preparing members’ written resolution
1. Is the members’ written resolution for a private company? A public company (whether listed or not) cannot pass a resolution of members by way of written resolution. 2. Should the matter set out in the members’ written resolution be an ordinary resolution or a special resolution? Check the requirements …
Considerations for share capital reduction
A company may reduce its share capital by either of the following methods unless provided otherwise in its constitution: (i) A special resolution and confirmation by the Court (“Court Confirmation Procedure“); or (ii) A special resolution supported by a solvency statement in accordance with section 117 of the Companies Act …
CEO, CFO, COO are also “directors”
The definition of a “director” is not limited to a person who is formally appointed as a director. Whether a person is a director depends more on the person’s functions than title. The definition of a “director” under section 2 of the Companies Act 2016 is not exhaustive. It includes …
Who is fit to be a director?
The Companies Commission of Malaysia has brought charges against directors of companies in separate cases for acting as directors while being undischarged bankrupts.* The legislature does not prescribe the qualities and experience a person must possess before he is fit for appointment. However, the legislature does prescribe the categories of …
Duty of nominee director to act in the best interest of company prevails
A director may be appointed to represent the interests of a person or a particular group such as employees, creditors or debenture holders. When a shareholder invests in a company, the shareholder and the company may agree that the shareholder has the right to appoint a director to represent the …
Constitution: Lodgement Requirements
My previous posts touched on the need to have a shareholders’ agreement customised to meet the shareholders’ specific requirements and for the company to have a constitution with terms consistent with the shareholders’ agreement. What’s next after the above are done? The company must lodge the constitution with the Registrar …
Do companies need constitution?
Following yesterday’s post, the next step after execution of a shareholders’ agreement is to amend the constitution of the company (if there is one) to be consistent with the shareholders’ agreement. A company without a constitution should consider adopting one which is consistent with the shareholders’ agreement. Save for a …