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Appealing Against an Assessment or Additional Assessment in Malaysia 中文 한국어 日本語 Appealing Against an Assessment or Additional Assessment in Malaysia When a taxpayer receives a Notice of Assessment or Additional Assessment from the Director General of Inland Revenue (DGIR), the law allows them to appeal if they are not satisfied with the tax charged. […]

邱律师受邀参与 8FM《欢迎光临 – 双亲节特备》 Lawyer Khoo Featured on 8FM’s “Welcome to My Home – Parents’ Day Special” 中文 한국어 日本語 Lawyer Khoo Featured on 8FM’s “Welcome to My Home – Parents’ Day Special” “Divorced but Not Defeated — Single Mothers Can Be Strong Too!” We are delighted to share that Lawyer Khoo, Managing Partner of

Understanding Your Right of Appeal Under Section 99 of the Income Tax Act Malaysia 中文 한국어 日本語 Understanding Your Right of Appeal Under Section 99 of the Income Tax Act Malaysia When a taxpayer receives a tax assessment from the Director General of Inland Revenue (DGIR), it can sometimes be unexpected or appear incorrect. Fortunately,

The Probation Period — More Than Just a Trial
For many employees, the probation period feels like a test. You work hard, try to prove yourself, and hope to be confirmed as a permanent staff member. Employers often treat probation as a safety net — a time to see if the new hire is suitable.
But in Malaysia, probation is not a free pass for employers to treat employees as “lesser” workers. The law recognises probationers as employees with rights, and any dismissal during probation must still meet legal standards. Understanding your rights during probation can make the difference between being treated fairly and being taken advantage of.

Probationers Are Employees Too
A common misconception is that probationers have no rights until they are confirmed. This is not true. The courts in Malaysia have repeatedly held that probationers are employees from day one, entitled to statutory protections and natural justice.
This means that your employer cannot dismiss you arbitrarily just because you are “on probation.” Even during probation, termination must be based on just cause and excuse.

What “Just Cause and Excuse” Means
In practical terms, “just cause and excuse” means there must be valid reasons, supported by evidence, for dismissing you. For probationers, the most common reason is poor performance. But even then, employers must follow certain steps:
They must set clear expectations and communicate them.
They must monitor your performance and give feedback.
They must give you a reasonable chance to improve.
If you are dismissed without warnings, without feedback, or without the chance to defend yourself, you may have grounds to claim wrongful dismissal.

Rights During the Probation Period
Right to Wages and Benefits
Probationers are entitled to the same statutory rights as other employees — including wages, overtime (if applicable), leave entitlements under the Employment Act, and protection against unlawful deductions.
Right to Fair Evaluation
Employers cannot move the goalposts mid-way. If your job scope or targets are changed drastically without proper communication, you may challenge the fairness of the evaluation.
Right to Natural Justice
If your employer alleges misconduct, you must be given notice of the charges and an opportunity to be heard, often through a show cause letter or domestic inquiry.
Right to Protection from Arbitrary Termination
Probation does not mean the employer can dismiss you at will. Any dismissal must be supported by just cause and excuse, and if challenged, the Industrial Court will scrutinise the employer’s actions.

Confirmation Is Not Automatic
Another common misunderstanding is that confirmation is automatic once the probation period ends. Unless the contract expressly states otherwise, confirmation is usually at the discretion of the employer. Employers may extend probation if they believe more time is needed to evaluate performance.
However, even if your probation is extended, the employer must act reasonably and not abuse the process by keeping you in “permanent probation.” Unreasonable extensions can be challenged.

What to Do If You Are Dismissed During Probation
If you are dismissed during probation, ask yourself:
Was I given clear performance expectations?
Did I receive feedback and the chance to improve?
Was I informed of the alleged misconduct and given a chance to explain?
If the answer to these questions is “no,” you may have grounds to file a claim for unfair dismissal under Section 20 of the Industrial Relations Act. Remember, you must file the claim within 60 days of dismissal.

Practical Advice for Employees
Take probation seriously — it is your chance to prove yourself.
Keep records of instructions, feedback, and communications.
If you feel targeted unfairly, raise concerns respectfully and in writing.
If you are dismissed, seek advice quickly — timing is critical.

Practical Advice for Employers
Treat probationers fairly and transparently.
Document feedback, reviews, and warnings.
Avoid arbitrary extensions of probation.
Remember that fairness and process are key to defending against claims.

Final Thoughts
Probation is a period of evaluation, but it does not strip employees of their rights. From the very first day of work, probationers are entitled to legal protections. Employers must treat them fairly, and employees must be aware of their rights.
In my practice as an employment lawyer, I have seen too many cases where probationers were dismissed without process, only for employers to face costly claims later. The message is simple: probation is not a legal loophole — it is part of the employment relationship, governed by the same principles of fairness, justice, and respect.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

The Shock of Dismissal
Few experiences are more distressing than being told you no longer have a job. For many employees, dismissal comes without warning—a short meeting with HR, a letter handed across the table, and suddenly the stability of income and dignity of work are gone. Some employees accept it silently, assuming nothing can be done. Others feel deep anger and confusion. The key question is this: was the dismissal lawful, or was it wrongful?
In Malaysia, employment law provides protections for employees against arbitrary or unfair termination. If you suspect you have been wrongfully dismissed, there are concrete steps you can take to safeguard your rights.

What Counts as Wrongful Dismissal?
Under Malaysian law, all dismissals must be based on “just cause and excuse.” This means that employers must have valid reasons, such as proven misconduct, poor performance (after warnings and opportunities to improve), or genuine redundancy supported by business needs.
Dismissal becomes “wrongful” when an employer terminates without valid reason or without following due process. For example:
You were dismissed without any explanation.
You were terminated for misconduct but were never given a chance to defend yourself.
Your role was made redundant but the company immediately hired someone else in the same position.
You were pressured to resign against your will.
These are classic red flags of wrongful dismissal.

First Steps After Dismissal
The first and most important step is not to panic. Take time to carefully read your termination letter. Note the stated reason for dismissal, the effective date, and whether you were given notice or compensation in lieu of notice.
Next, gather your records. Keep copies of your employment contract, payslips, warning letters (if any), performance reviews, and relevant emails or messages. Documentation is vital in proving whether the dismissal was fair or not.
It is also important to avoid rash actions—do not lash out at your employer or destroy evidence. Stay calm and focus on preserving your rights.

Filing a Claim
In Malaysia, employees who believe they were wrongfully dismissed can file a representation under Section 20 of the Industrial Relations Act 1967. This must be done within 60 days from the date of dismissal. Missing this deadline may result in losing your right to claim.
Once the claim is filed, the Industrial Relations Department will attempt conciliation between you and your employer. If no settlement is reached, the case may be referred to the Industrial Court, which has the power to order reinstatement or compensation.

What Remedies Are Available?
If the Industrial Court finds that you were wrongfully dismissed, the remedies may include:
Reinstatement: being restored to your job, with continuity of service.
Back wages: compensation for the period you were unemployed, usually capped at 24 months.
Compensation in lieu of reinstatement: if reinstatement is impractical, monetary compensation is awarded instead.
These remedies aim to restore fairness and offset the loss suffered by the employee.

Common Mistakes Employees Make
One common mistake is delaying action. Waiting too long to seek advice or file a claim can be fatal to your case.
Another mistake is resigning voluntarily under pressure. Some employers subtly push employees to “resign gracefully.” If you hand in a resignation letter, it may weaken your ability to claim wrongful dismissal later—unless you can prove it was a case of constructive dismissal.
Finally, some employees fail to keep records. Without evidence, it becomes a battle of words, which is much harder to win.

The Importance of Legal Advice
Employment law is technical, and every case is fact-specific. What looks like wrongful dismissal at first glance may turn out to be legally justified—and vice versa. Speaking to a lawyer or union representative early can help you understand your chances and avoid costly mistakes.
A lawyer can also assist in drafting your claim, representing you in conciliation, and presenting evidence effectively in the Industrial Court.

Final Thoughts
Being dismissed can feel like the end of the world, but the law in Malaysia provides protections that many employees do not realise they have. If you believe you have been wrongfully dismissed, act quickly, gather your evidence, and seek proper advice.
Above all, remember this: losing a job unfairly is not just about income—it is about dignity and justice. By standing up for your rights, you not only protect yourself but also contribute to a fairer workplace for everyone.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

The Overlooked Tool
When business owners think about legal protection, they often focus on contracts, compliance, and insurance. But there is another tool—often overlooked—that can prevent disputes before they even begin: the employee handbook.
Too many Malaysian companies, especially SMEs, operate without one. They assume that contracts are enough or that workplace policies can be handled informally. Unfortunately, when disputes arise—over misconduct, working hours, leave, or termination—the absence of a proper handbook leaves the employer exposed. A well-drafted handbook, on the other hand, not only sets expectations but also serves as a legal shield.

What Is an Employee Handbook?
An employee handbook is a written document that sets out the company’s policies, procedures, and rules for employees. It is more than a welcome guide—it is a reference point for how the organisation handles day-to-day matters and disputes.
Typically, a handbook covers topics such as code of conduct, working hours, overtime, leave entitlements, use of company property, disciplinary procedures, and grievance channels. It acts as a bridge between the broad terms of an employment contract and the practical realities of managing a workplace.

Why It Matters in Legal Disputes
When disputes reach the Industrial Court, judges often look at whether the employer had clear rules and whether the employee was made aware of them. If there is no handbook, it becomes difficult to prove that the employee knew the rules they were accused of breaking.
For example, if an employee is dismissed for repeated lateness, the employer must show that there was a clear policy on punctuality and that the employee knew about it. A handbook provides this evidence. It also demonstrates that the employer acted fairly and consistently, which is critical in defending against claims of unfair dismissal.

Benefits for Employers
The benefits of a handbook go far beyond litigation. It creates consistency, ensuring all employees are treated according to the same rules. It reduces confusion by setting out rights and obligations clearly. It empowers managers by giving them a framework to handle issues confidently. And it sends a message that the company is professional, organised, and serious about compliance.
From a legal standpoint, it helps employers show that they took reasonable steps to communicate expectations and maintain discipline. In many cases, this can be the difference between winning and losing at the Industrial Court.

Benefits for Employees
Handbooks are not just about protecting employers—they protect employees too. A good handbook reassures employees about their entitlements to leave, medical benefits, and grievance procedures. It shows them how to raise complaints, what standards of behaviour are expected, and what processes will be followed if disputes arise.
In this way, a handbook reduces uncertainty and fosters trust. Employees know where they stand, and that contributes to a healthier workplace culture.

Common Mistakes with Handbooks
Some employers draft handbooks but fail to keep them updated. Outdated policies—such as maternity leave entitlements that no longer match current law—can backfire badly.
Others prepare a handbook but never circulate it properly. A handbook sitting in a drawer is useless if employees are unaware of it. Distribution, acknowledgement, and training are just as important as drafting.
Another mistake is copying a handbook from another company without tailoring it. Each workplace has its own culture, risks, and industry-specific needs. A handbook should reflect those realities, not just generic policies.

Best Practices for Employers
Draft a handbook tailored to your business and compliant with Malaysian law.
Review and update it regularly to reflect changes in legislation and company practices.
Distribute it to all employees and obtain written acknowledgement.
Train managers on how to apply the policies consistently.
Use the handbook as a living document, not just a formality.

Final Thoughts
In the rush of running a business, an employee handbook may seem like low priority paperwork. But in truth, it is one of the most cost-effective investments an employer can make. It sets clear expectations, promotes fairness, and most importantly, protects the company when disputes arise.
In my practice as an employment lawyer, I have seen countless cases where the absence of a handbook weakened an employer’s defence—or where a well-drafted handbook helped a company avoid liability altogether.
The lesson is simple: don’t wait for a dispute to expose the gaps in your workplace rules. Put those rules in writing, communicate them clearly, and update them regularly. An employee handbook is more than a manual—it is your first line of defence against legal trouble.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

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

When shareholders in a company cannot agree on major decisions, the result is often a deadlock. In Malaysia, deadlock situations are particularly common in private companies where ownership is split evenly between two or more shareholders. While the Companies Act 2016 provides a general framework for corporate governance, it does not always offer straightforward solutions to shareholder stalemates. Left unresolved, deadlocks can paralyse a company, harm its operations, and even lead to litigation or winding up.
A shareholder deadlock typically arises when shareholders hold equal voting power but have opposing views on crucial matters. For example, disagreements may occur over expansion plans, financing strategies, appointment of directors, or dividend policies. Because many company decisions require shareholder approval, an impasse can prevent the company from functioning effectively. Over time, this lack of direction can damage the company’s reputation, financial performance, and long-term viability.
One of the most effective ways to prevent or resolve deadlocks is through a shareholders’ agreement. Unlike the company constitution, which is filed with the Companies Commission of Malaysia (SSM), a shareholders’ agreement is a private contract that can set out specific mechanisms for resolving disputes. These may include buy-out clauses, where one shareholder has the option to purchase the other’s shares, or “shotgun clauses,” where one party offers to sell at a certain price and the other must choose to buy or sell at that same price. Such provisions create a clear pathway for breaking deadlocks without resorting to court action.
Another approach is to use alternative dispute resolution (ADR) methods such as mediation or arbitration. These methods allow shareholders to engage neutral third parties to facilitate dialogue and find practical compromises. ADR is often faster, less costly, and less adversarial than litigation, preserving business relationships in the process.
In situations where deadlock severely impairs the company’s operations, shareholders may apply to the court for intervention. Malaysian courts, under the “just and equitable” ground for winding up, may order the company to be wound up if the deadlock makes it impossible to carry on the business. While this option provides a final resolution, it is often seen as a last resort since it terminates the company’s existence and may result in financial losses for all parties involved.
For minority shareholders, deadlocks can be particularly frustrating as they may lack the voting power to resolve the dispute. In such cases, legal remedies such as an application for relief against oppression under Section 346 of the Companies Act 2016 may be available. This allows the court to make wide-ranging orders to protect shareholders whose rights have been unfairly prejudiced by majority actions or inactions.
In conclusion, shareholder deadlock poses serious risks to companies in Malaysia, but it is not without solutions. Proactive planning through shareholders’ agreements, use of dispute resolution mechanisms, and, where necessary, court intervention provide pathways to resolve stalemates. By addressing deadlocks promptly and strategically, shareholders can safeguard the company’s future and avoid the costly consequences of prolonged disputes.
Written by Lawyer Khoo, Ng, Zainurul, Seke & Khoo

Directors are central to the management of a company in Malaysia, carrying both fiduciary and statutory duties under the Companies Act 2016. However, there are times when a director may no longer remain in office, whether by choice or by the decision of shareholders. The two most common ways this happens are through resignation and removal. While both result in a director leaving office, the legal processes and implications are quite different.
A director’s resignation is a voluntary act. Under the Companies Act 2016, a director may resign by giving notice in writing in accordance with the company’s constitution. In most cases, the resignation takes effect upon receipt of the notice by the board or on the specified date stated in the notice. Resignation is relatively straightforward, but it does not absolve the director of liability for actions taken while in office. For example, a director who approved wrongful transactions before resigning may still face legal consequences even after leaving the board.
By contrast, removal of a director is initiated by the shareholders. Section 206 of the Companies Act 2016 gives shareholders the power to remove a director by ordinary resolution, notwithstanding anything in the constitution or in an agreement with the director. This ensures that directors remain accountable to shareholders, even if they do not wish to step down voluntarily. However, the process must follow proper procedure. Notice of the proposed resolution must be given in advance, and the director concerned has the right to be heard before the resolution is put to vote.
The removal process is often more contentious than resignation. Directors may resist removal, especially if there are disputes among shareholders. In such cases, the outcome usually depends on the voting power of different shareholder groups. For minority shareholders, the ability to remove directors is limited unless they have special contractual rights under a shareholders’ agreement. For majority shareholders, removal is a powerful tool to protect the company from directors who are negligent, conflicted, or acting against the company’s interests.
It is also important to note that removal may have contractual implications. If the director also serves under an employment contract, termination of directorship may amount to a breach of contract unless handled carefully. Companies must therefore ensure that both corporate and employment law aspects are addressed to avoid unnecessary litigation or claims for compensation.
For directors, both resignation and removal carry reputational and legal consequences. Resignation may be seen as a professional choice, often due to personal reasons or disagreements over strategy. Removal, on the other hand, may signal a loss of shareholder confidence or dissatisfaction with performance. Either way, directors remain accountable for their conduct during their tenure and may still face claims or investigations even after leaving office.
In conclusion, the departure of a director—whether through resignation or removal—must be handled in accordance with the Companies Act 2016 and the company’s constitution. Companies should seek legal advice to ensure proper procedure is followed, while directors should understand their rights and responsibilities when stepping down or being removed. By managing the process correctly, companies can avoid disputes and maintain stability in their corporate governance.
Written by Lawyer Khoo, Ng, Zainurul, Seke & Khoo