Company Law

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 …

Company Law

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 …

Company Law

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 …

Directors

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

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 …

Directors

Liabilities of alternate director

Do you know that you are subject to the same directors’ liabilities under the Companies Act 2016 when you agree to act as alternate director? Anyone who consents to act as an alternate director should also understand the implication of doing so. Some points to note on alternate director: • …

Directors

Non-executive director’s appointment letter

The Institute of Chartered Secretaries and Administrators (ICSA)* published a guidance note on sample non-executive director’s appointment letter. The sample letter aims to provide an initial checklist of the elements a company intends to cover in its appointment letter and is not intended to be a prescriptive template. Although the …

Company Law

CEO, CFO and COO are subject to directors’ duties

Directors’ duties are not limited to formally appointed 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 responsibilities than title. The definition of a “director” under section 2 of …

Company Law

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 …

Directors

What to consider before appointing a director?

Prior to appointing a person as a director, check to ensure the person: 1. is at least 18 years old; 2. is not an undischarged bankrupt, who has not obtained leave of the Official Receiver or Court to be appointed as a director; 3. has not been convicted of an …