When it comes to corporate governance, ensuring proper shareholder approval is essential to avoid legal issues down the road. Understanding the requirements of the Companies Act 2016 of Malaysia is necessary.

For Private Company

For a private company, a resolution of the shareholders shall be passed in either of the following two ways:

• a written resolution; or
• at a shareholders’ meeting (s 290(1)).

However, certain resolutions of shareholders can only be passed at a shareholders’ meeting, and not by way of a written resolution (s 297(2)):

• a resolution under section 206 to remove a director before the expiration of his term of office; or
• a resolution under section 276 to remove an auditor before the expiration of his term of office.

For Public Company

Regardless of whether a public company is listed or not, shareholders’ resolutions can only be passed at a shareholders’ meeting, and not via written resolutions (Section 290(2)). This requirement is often overlooked for public companies that are not listed, in particular for public companies preparing for an IPO and listing.

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This post was first posted on LinkedIn on 12 January 2025.