What to consider before appointing a director?

Directors

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 offence relating to the promotion, formation or management of a corporation;

4. has not been convicted of an offence involving bribery, fraud or dishonesty;

5. has not been convicted of an offence under s 213 (duties and responsibilities of directors), s 217 (responsibility of nominee director), s 218 (prohibition against improper use of property and position as a director), s 228 (transactions with directors, substantial shareholders or connected persons) and s 539 (liability where proper accounts not kept) of the Companies Act 2016; and

6. has not been disqualified by the Court from acting as a director under s 199 of the Companies Act 2016.

The events which disqualify a person from being a director as set out in items 3 to 6 above apply within 5 years from the date of conviction or if sentenced to imprisonment, from the date of release from prison.

In addition to the above, Bursa Listing Requirements provides that a person must not act as a director of a public company listed on Bursa if the person:

(a) has been convicted by the Court of an offence, involving bribery, fraud or dishonesty or where the conviction involved a finding that he acted fraudulently or dishonestly; or

(b) has been convicted by the Court of an offence under the securities laws or the corporations laws of the PLC’s place of incorporation,

within 5 years from the date of conviction or if sentenced to imprisonment, from the date of release from prison.

#malaysiancorporatelawyer
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#directordisqualification

This post was first posted on Linkedin on 24 September 2021.

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