I review resolutions as part of my M&A and other transactional work.

Here’s a list of what I typically check to ensure compliance with the Companies Act 2016 (CA) when reviewing members’ written resolutions of private companies in Malaysia.

𝗖𝗵𝗲𝗰𝗸𝗹𝗶𝘀𝘁 𝗳𝗼𝗿 𝗽𝗿𝗲𝗽𝗮𝗿𝗶𝗻𝗴/𝗿𝗲𝘃𝗶𝗲𝘄𝗶𝗻𝗴 𝗺𝗲𝗺𝗯𝗲𝗿𝘀’ 𝘄𝗿𝗶𝘁𝘁𝗲𝗻 𝗿𝗲𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻

1. Confirm private company status

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. Determine the type of resolution

Should the matter set out in the members’ written resolution be an ordinary resolution or a special resolution? Check the requirements under the CA and if applicable, the constitution and shareholders’ agreement.

3. Ensure sufficient notice period

If the members’ written resolution is intended to be a special resolution, ensure that the company has provided a notice of not less than 21 days to its members (section 292(1) of the CA).

4. Clearly state a special resolution

If the members’ written resolution is intended to be a special resolution, has it been stated that it is a special resolution? (section 292(2) of the CA).

5. Provide information required in the resolution

Ensure the member’s written resolution is accompanied by a statement informing the members as to (a) the procedure for signifying agreement or otherwise to the resolution; and (b) the date by which the resolution shall lapse if not passed (section 303(4) of the CA).

6. Members’ statement

For members’ written resolution proposed by a member, did such member require the company to circulate an accompanying statement of not more than 1000 words on the subject matter of the written resolution?

If yes, the directors must circulate a copy of the members’ written resolution and accompanying statement to every eligible member.

7. Certain resolutions cannot be passed as written resolutions

Is the purpose of the members’ written resolution to remove a director or an auditor before the expiration of his term of office?

Removal of a director or an auditor before the expiration of his term of office by way of a written resolution is prohibited under section 297(2) of the CA.

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This post first appeared on LinkedIn on 15 June 2023.