Company Law

Directors in Malaysia are fond of saying that the company is a separate legal entity and that its debts are its own. That is true, until a director breaches the duties the Companies Act 2016 imposes. At that point the protection of the corporate veil falls away and the director’s personal assets are exposed. This

Many people sit on company boards in Malaysia without a clear picture of what the law actually makes them. Some hold the title but do nothing. Some hold no title but run the company. Some are appointed to represent an investor. Under the Companies Act 2016, all of them can be directors in the eyes

Under section 465(1)(h) of the Companies Act 2016, the court may wind up a company where it is of the opinion that it is just and equitable to do so. The ground is deliberately open-textured, and is most often invoked in solvent companies where the relationship between the participants has irretrievably broken down: deadlock between

The Companies Act 2016 arms members with enforceable rights: members holding at least 10% of paid-up capital (or a lower percentage if the constitution provides) may requisition the directors to convene a meeting under section 311, and may themselves convene one if the board defaults. Members also have rights to notice, to appoint proxies, to

Where a company is wronged by its own directors but the wrongdoers control the board, sections 347 to 350 of the Companies Act 2016 allow a ‘complainant’ — including a member or former member — to apply for leave of the court to bring proceedings in the name and on behalf of the company. Leave

Section 221 of the Companies Act 2016 requires every director who is in any way, directly or indirectly, interested in a contract or proposed contract with the company to declare the nature of the interest at a board meeting as soon as practicable after the relevant facts are known. Failure to disclose is a criminal

Under section 17A of the Malaysian Anti-Corruption Commission Act 2009, a commercial organisation commits an offence if a person associated with it corruptly gives or offers gratification to obtain or retain business or an advantage for the organisation. Critically, where the organisation is liable, its directors, controllers, officers and management are deemed personally liable unless

Section 228 of the Companies Act 2016 prohibits a company from entering into an arrangement or transaction of ‘requisite value’ to acquire from, or dispose of to, a director, substantial shareholder, or person connected with them, any non-cash asset — unless prior shareholder approval is obtained at a general meeting. The interested person must abstain

Under section 230 of the Companies Act 2016, the fees of directors of a public company (and benefits payable to them) must be approved by shareholders at a general meeting. For a private company, the board may approve fees and benefits, subject to the constitution, but members holding at least 10% may object, and payment