Checklist for Qualifications of a Director in Malaysia
Prior to appointing a person as a director, the candidate must meet the following requirements to comply with the law and enhance the company’s corporate governance. is at least 18 years old; is not an undischarged bankrupt, who has not obtained leave of the Official Receiver or Court to be …
CEOs, CFOs, and COOs = Directors?
When we think of “directors” in the context of corporate law, we often picture formally appointed individuals on a board. However, the term “director” is broader than you might think. The definition of a “director” is not limited to a person who is formally appointed as a director. Whether a …
Who can be appointed as a director?
In M&A transactions, it is common for a purchaser acquiring a stake in a company to seek a board seat as part of the deal. This allows the purchaser to have a say in the company’s strategic direction and governance post-transaction. Under the Companies Act 2016 of Malaysia, a director …
The Duty of Nominee Directors Appointed in M&A Transactions
In M&A deals, it’s common for the purchasers (i.e., the new shareholders) to nominate their own directors to the board of directors of the target companies. Such directors are known as nominee directors. Under the Companies Act 2016 of Malaysia, although a nominee director is appointed to represent the interest …
What Every Director Needs to Know about Disclosure of Interest in Shares
Directors have a duty under section 219 of the Companies Act 2016 to notify the company in writing of shares they have interest in, whether in the company or in a related corporation (s219, Companies Act 2016). This is to comply with section 59 of the Companies Act 2016, which …
Legal Requirements for Directors’ Fees and Benefits in Malaysia
One common issue I encounter in both M&A deals and IPO exercises relates to compliance with the legal requirements for the payment of director’s fees and benefits. Additionally, the legal obligations regarding director’s service contracts should not be overlooked. Here are the key points: Constitution 1. If a company, whether public …
A Director Cannot be Absolved from Responsibilities by Appointing an Alternate Director
Reviewing constitution (usually in the context of a corporate transaction) is part of my job as a corporate lawyer. It’s not always fun but it’s always a good refresher of the Companies Act 2016. While reviewing the constitution of a company, I came across the following provision which made me …
Nominee director’s duty
In an M&A transaction where the sale and purchase of shares is not for the entire issued share capital of a company, it is prudent for shareholders to enter into a shareholders’ agreement to govern their relationship. The shareholders would typically want the right to nominate their representatives to be …
Three things to consider when appointing independent director of PLC
Assessment of a candidate for the role of an independent director of a public listed company (“𝗣𝗟𝗖”) is important and requires extensive due diligence, in particular for a company which is undertaking an IPO exercise. The following are 3 things to consider when assessing a candidate for the role of …
Directors to declare their interest in contracts
Non-declaration of director’s interest in contracts is a common issue encountered when reviewing directors’ resolutions in the course of legal due diligence for M&A or IPO exercise. 𝗖𝗼𝗺𝗺𝗼𝗻 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼 X is a director and shareholder of Company A as well as Company B. Company A and Company B enter into …