Learn more about how to start a business / company in Malaysia and how to operate it properly under the laws of Malaysia. If you're starting up new, the articles are very useful for new business owners too.
Boss, Ask Me Lah!
Got a question about Sdn Bhd ?or about Company Secretary ? or...
Hear what our valuable clients have to say about their experience with Bossboleh.
Before opening a company, it is necessary to know and understand the qualifications and disqualifications of company directors. Other than that, it is important that directors of Malaysian companies act according to the responsibilities of their duties in order to avoid breaching the company law and committing criminal offences. This article provides an overview of the qualification, disqualification, resignation and removal of directors.
Before we get into today’s topic, let’s briefly bring over the definition of what a “director” is. Section 2 of the CA 2016 defines “director” as any person occupying the position of ‘Director of a Corporation’ by whatever name called, and includes a person in accordance with whose directors or instructions most directors of a corporation are accustomed to act, as an alternate or substitute director. The new definition lowers the threshold of directorship compared to its previous counterpart in Section 4 of the CA 1965. It now only requires the directions or instructions to be followed by majority of directors, instead of the entire board of directors.
To elaborate further from the picture above, a person is not eligible to become a director of the company if: –
**The prohibition period is 5 years calculated from the date he is convicted, or if he is sentenced to imprisonment, 5 years from the date of his release from prison. Nevertheless, he may be re-appointed or hold office as a director with the court’s approval.
Under CA 1965, the Registrar of Companies has to meet all 3 requirements as stated above while under CA 2016, the Registrar of Companies has to prove only one of them.
The CA 2016 codifies article 72 of Table A under the Fourth Schedule of the CA 1965 into a provision. Section 208(1) states that the office of a director of a company shall be vacated if the person holding that office: –
Sometimes, the board of directors may reject the resignation is because the resigning director is: –
Read more at SSM.
Want to know more about starting a Sdn Bhd? What’s the best way to start one, and what should you be mindful of? Register and find out in our upcoming webinar!
Are you ready to form your Sdn Bhd with Malaysia’s #1 award-winning Online Company Secretary? Contact us now via WhatsApp @ 018-7678055!