COMPANY DIRECTOR

  • A person who occupying a position of director in a company by whatever name called
  • Any person who act in accordance with the directions or instructions from the directors of a company such as a shadow director
  • An alternate or substitute Director

REQUIREMENTS TO BECOME A COMPANY DIRECTOR

  • Every company must have at least one director who ordinarily resides in Malaysia by having a principal place of residence in Malaysia
  • The appointed director must be:
    • a natural person
    • age of 18 years old and above
    • of sound mind
    • not a bankruptcy and has not been convicted and imprisoned

TYPES OF COMPANY DIRECTORS

EXECUTIVE DIRECTOR

  • Salaried
  • Full time
  • Delegated with managerial or executive power on day-to-day operations

NON-EXECUTIVE DIRECTOR

  • Non-salaried
  • Play no role in day-to-day operations
  • Receive director’s fee

MANAGING DIRECTOR

  • Chief Executive Officer of the company
  • Appointed by the Board of Director on a full-time basis
  • Bound by service contract sets out details relating to duties, remuneration, privileges and restriction to the appointment
  • Appointment of Managing Director is usually authorised by the law or Constitution or Articles of Association where the Board of Director is empowered to appoint the Managing Director

ASSOCIATE DIRECTOR

  • Also known as ‘Quasi-Director
  • More for Senior Executive
  • Not a director
  • No right to attend and vote at board meeting
  • Solely under the control of Board of Director

ALTERNATE DIRECTOR

  • Regarded as Director of the Company
  • Appointed by the principal director for certain period
  • Entitle to receive notice of Board of Director’s meeting
  • Capable of voting and exercising all power of the principal director
  • Automatically cease from his position if the principal director resign from the Company

NOMINEE DIRECTOR

  • Appointed to represent interest of a particular shareholder or creditor
  • Relationship with his principal director is fiduciary duty
  • Cannot place the interest of principal director over the company
  • Must act in the best interest of company

CHAIRMAN OF THE BOARD OF DIRECTORS

  • Appointed by Board of Director to preside at the meeting
  • Hold casting vote and sign minutes of meeting
  • His duties and responsibilities are similar to the directors of the company.
  • The role of the chairman is recommended to be separated from chief executive officer to ensure that there is balance of power and authority and no individual has unfettered powers of decision making

APPOINTMENT OF COMPANY DIRECTOR

A person can be appointed as a company director by the following manners:

  • First Directors named in the Company
  • Subsequent appointment for additional director
  • Casual vacancy to fill the vacated position

DOCUMENTS LODGE TO SSM FOR APPOINTMENT OF COMPANY DIRECTOR

  • Form of Notification of  Change in the Register of Directors, Managers and Secretaries
  • Copy of identity card or passport of the newly appointed director
  • Certified true copy of board resolution
  • Lodge within 30 days from the date of appointment to Suruhanjaya Syarikat Malaysia

DUTIES AND RESPONSIBILITIES OF COMPANY DIRECTOR

  • To act in good faith and in the best interest of the company for proper purpose
  • To act with care, skill & diligence
  • To make business judgment without material personal interest
  • Not allow to improper use of company’s property, position, corporate opportunity or competing with the company
  • Bound to account for secret profit
  • To hold statutory meeting and prepare to file statutory report relating to a public company
  • To hold Annual General Meeting and Extraordinary General Meeting
  • To record minutes of all meetings in the absent of company secretary
  • To make up Annual Return and lodge it to the SSM
  • To maintain and keep proper accounting records and to produce accounts
  • To table accounts, balance sheet, directors’ report and auditors’ report at Annual General Meeting
  • To circulate audited accounts, balance  sheet, directors’ report and auditors’ report to shareholders
  • To appoint company’s first auditors
  • To comply with the requirements for the change of the company’s name
  • To comply with the restriction, limitation or prohibition of private limited company
  • To comply with the required procedures for reduction of shares
  • To register the transfer of shares and issuing of share certificates (if any)
  • To maintain a registered office
  • To make sure the company’s name and company number are published
  • To appoint qualified person to act as company secretary
  • To make sure the payment of dividend is from profits only

DISQUALIFICATION OF COMPANY DIRECTOR

  • Person that is an undischarged bankrupt
  • Person that has been convicted of an offence in the promotion, formation, or management of a company
  • Person that has been convicted of an offense involving bribery, fraud and dishonesty
  • Person that has been convicted for not exercising his/her power for a proper purpose and in good faith in the best interest of the company as a director
  • Person that has been convicted for not acting in the best interest of the company as a nominee director
  • Person that has been convicted of improper use of company’s property, position, corporate opportunity or competing with the company
  • Person that has been convicted of entering transactions with directors, substantial shareholders or connected persons
  • Person that has been convicted of not keeping proper books of accounts
  • Person that has been disqualified under power of court
  • Person that is disqualified by the constitution or articles to act as director
  • Person that failed to acquire his share qualification as a Director
  • Person who is an auditor of the Company

VACATION OF COMPANY DIRECTOR

A Company Director can be vacated from his position by the following circumstances:

  • Death
  • Insanity
  • Resignation
  • Bankruptcy
  • Failure to obtain or maintain the qualification shares
  • Absence from attending Board of Directors’ meetings
  • Remove by members at General Meeting

RESIGNATION OF COMPANY DIRECTOR

  • Resignation of Director is effective on the day the letter of resignation is received by the company
  • Resignation of director need not be accepted by the Board of Directors
  • Resignation letter is to be tabled at Board meeting for approval
  • The remaining last company director shall not resign until a new director is appointed

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