M&A: Shareholders’ Rights

Company Law

Preparing a shareholders’ agreement for an M&A transaction requires an in-depth understanding of shareholders’ rights and powers under the laws and the relationship between the shareholders.

The table below sets out some of the rights and powers in respect of different levels of shareholding in a private company* limited by shares in Malaysia.

The relationship between the shareholders may mean that notwithstanding the majority shareholder(s) is be able to pass any of the ordinary resolutions or special resolutions, the shareholders may agree that those matters may only be passed with affirmative votes of all or certain shareholders.

To prepare a shareholders’ agreement that meets the needs of the parties, it is necessary to understand the roles that each shareholder plays within a company such as whether a shareholder is responsible to contribute expertise or funds or run the day-to-day operation of the company.

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*Some of the rights and powers of shareholders set out in this post may be equally applicable to public companies but the focus of this post is on private companies.

This post was first posted on Linkedin on 1 October 2022.

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