Company Law

Honest pricing matters when stakes are high. Here is what shareholder dispute litigation actually costs in 2026 — transparent ranges from NZSK Legal. NZSK Legal’s 2026 Fee Ranges Simple Shareholder Dispute (Negotiated Settlement) Pre-litigation negotiation, demand letters, settlement drafting. Professional fees RM 8,000-25,000. Total: RM 10,000-30,000. Section 346 Oppression OS (Standard) Petition, affidavits, hearings, judgment.

When there’s a real risk that wrongdoers will move assets out of reach, NZSK Legal — led by Khoo Ai Theng — moves same-day to freeze assets through Mareva injunction. When NZSK Legal Pursues Mareva Relief Frequently Asked Questions Q: What is a Mareva injunction in Malaysia? A: A court order freezing a defendant’s assets

When the company is profitable but you see no return, profits are usually being diverted somewhere. NZSK Legal — led by Khoo Ai Theng — finds where and pursues the appropriate remedy. Common Profit Diversion Schemes NZSK Legal Investigates Frequently Asked Questions Q: Can the majority withhold dividends from minority? A: Persistent withholding despite distributable

Dilution attacks are among the most common forms of minority oppression. NZSK Legal — led by Khoo Ai Theng — moves fast to protect your shareholding. Indicators of Oppressive Dilution Frequently Asked Questions Q: Can I stop a share issue that dilutes me? A: Yes, where the issue is oppressive. NZSK Legal pursues injunctive relief

Joint ventures are partnerships in corporate form. When they break down, NZSK Legal — led by Khoo Ai Theng — handles the multi-layered legal response. Common JV Disputes NZSK Legal Handles Many joint ventures are run through a Sdn Bhd, a partnership or an LLP, and the structure decides which remedies are available when the

If your shareholding rights have been bypassed in a back-door share transfer, NZSK Legal — led by Khoo Ai Theng — moves fast to enforce your pre-emption rights. Common Pre-Emption Breaches NZSK Legal Handles Pre-emption rights often decide what happens to shares when a shareholder dies or wants to leave the company. See What Happens

Family company disputes are uniquely painful — and uniquely actionable. NZSK Legal — led by Khoo Ai Theng — handles quasi-partnership disputes with the sensitivity and rigour they require. Establishing Quasi-Partnership in Malaysia If the business is a conventional partnership or an LLP rather than a company, different rules apply. See Business Partner Disputes in

Your shareholders’ agreement is your roadmap. When the other side breaches it, NZSK Legal — led by Khoo Ai Theng — pursues every contractual remedy available. Common SHA Breaches NZSK Legal Litigates NZSK Legal’s Contractual Enforcement Strategy Step 1: Characterisation Analysis Post-ISM Sendirian Berhad v Queensway Nominees [2025] FCA, distinguish private SHA matters (contractual claim)

When investors or business partners enter a company, they often look beyond day-to-day operations and consider what will happen when someone wishes to exit. In Malaysia, two important contractual mechanisms that address this issue are tag-along rights and drag-along rights. While not expressly provided for in the Companies Act 2016, these rights are typically included in shareholders’ agreements to ensure fair treatment during the sale or transfer of shares.
Tag-along rights are designed to protect minority shareholders. If a majority shareholder decides to sell their stake to a third party, tag-along rights allow minority shareholders to “tag along” and sell their shares on the same terms and conditions. This ensures that minority shareholders are not left behind in a company controlled by new owners they did not choose. For example, if a majority shareholder sells their stake at a premium, minority shareholders with tag-along rights can also enjoy the same premium price. Without this protection, minority shareholders may find themselves stuck in a company with reduced value and diminished influence.
On the other hand, drag-along rights favour majority shareholders. If a majority shareholder wishes to sell their stake to a third party, drag-along rights allow them to “drag” minority shareholders into the sale, forcing them to sell their shares on the same terms. This prevents minority shareholders from blocking a sale that could benefit the company or all investors. Drag-along rights are particularly useful in mergers and acquisitions, where potential buyers often require full ownership or a controlling interest to proceed with the deal.
Together, tag-along and drag-along rights strike a balance between protecting minority shareholders and enabling majority shareholders to execute strategic exits. They provide clarity, reduce disputes, and ensure that all shareholders are treated fairly during major transactions. For this reason, well-drafted shareholders’ agreements in Malaysia often include both provisions, tailored to the specific needs of the company and its investors.
It is important to note that these rights must be carefully drafted to avoid ambiguity. Clear definitions of triggering events, minimum thresholds of shares, and timelines for exercising rights are essential. For instance, a tag-along clause should specify whether all minority shareholders must be offered the opportunity to sell or only those holding a certain percentage. Similarly, drag-along clauses should outline whether they can be triggered by a simple majority or a supermajority.
For shareholders, having tag-along and drag-along rights in place provides certainty and peace of mind. Minority shareholders gain assurance that they will not be disadvantaged in an exit, while majority shareholders secure the flexibility needed to pursue strategic deals. From a legal perspective, these rights demonstrate good corporate governance and help avoid costly disputes in the future.
In conclusion, tag-along and drag-along rights are powerful tools for managing shareholder exits in Malaysia. Though contractual rather than statutory, they are widely recognised as essential features of modern shareholders’ agreements. By adopting these rights, companies can ensure fairness, protect shareholder value, and provide stability in times of transition.
Written by Lawyer Khoo, Ng, Zainurul, Seke & Khoo

In Malaysian company law, one of the most important safeguards for shareholders—particularly minority shareholders—is the concept of pre-emptive rights. These rights, recognised under the Companies Act 2016 and often reinforced by shareholders’ agreements, give existing shareholders the first opportunity to purchase new shares before they are offered to outsiders. By doing so, pre-emptive rights help prevent unfair dilution of ownership and protect the balance of power within a company.
The main purpose of pre-emptive rights is to ensure fairness and maintain shareholders’ proportional ownership. Without such rights, majority shareholders or directors could issue new shares to third parties, effectively diluting the holdings of existing shareholders and weakening their influence over company decisions. For minority shareholders, who may already face challenges in having their voices heard, pre-emptive rights are crucial to safeguarding their financial and voting interests.
Under the Companies Act 2016, shareholders’ approval is generally required before new shares are issued. However, unless a company’s constitution or a shareholders’ agreement specifically grants pre-emptive rights, minority shareholders may have little recourse if majority shareholders push through a share issuance that dilutes their stake. This is why it is common practice in well-drafted shareholders’ agreements to include detailed provisions on pre-emptive rights, ensuring that existing shareholders always have the first option to participate in fresh share issuances.
Pre-emptive rights also encourage transparency and accountability. By requiring directors to first offer shares to existing shareholders, companies must provide clear information about the reasons for the new issuance, the proposed pricing, and the intended use of funds. This helps prevent abuse of power and ensures that the company’s actions align with the interests of all shareholders.
For minority shareholders, pre-emptive rights form part of the broader framework of minority protection under Malaysian law. Other protections include the right to relief against oppression under Section 346 of the Companies Act 2016, which allows minority shareholders to seek court intervention if the company’s affairs are conducted in a way that is oppressive, unfairly prejudicial, or discriminatory. Together, these safeguards promote fairness and discourage practices that would otherwise leave minority investors vulnerable.
At the same time, pre-emptive rights must be exercised responsibly. If minority shareholders decline to take up the shares offered, the company is free to issue them to outsiders. This ensures that the company is not unduly restricted in raising capital while still respecting shareholder rights.
In conclusion, pre-emptive rights play a vital role in protecting minority shareholders and maintaining fairness in Malaysian companies. By preventing unfair dilution and ensuring equal opportunity in share issuances, they strike a balance between the company’s need to raise funds and shareholders’ right to preserve their interests. For companies, the inclusion of pre-emptive rights in the constitution or a shareholders’ agreement is not only good practice but also a step towards stronger corporate governance and shareholder trust.
Written by Lawyer Khoo, Ng, Zainurul, Seke & Khoo