Register Malaysia Company (Sdn Bhd) 注册马来西亚私人有限公司 Sdn Bhd
Register Malaysia Company (Sdn Bhd) 注册马来西亚私人有限公司 Sdn Bhd
Here’s a comprehensive summary of the roles and responsibilities of a director in Malaysia under the Companies Act 2016: ________________________________________ General Overview
Directors act as agents of a company and are responsible for managing its business and affairs under Section 211(1) of the Companies Act 2016. They are bound by fiduciary duties and are expected to act in the company’s best interest.
________________________________________ Key Duties and Responsibilities 1. Duty to Act for a Proper Purpose and in Good Faith
Directors must:
• Use their powers for purposes outlined in the Companies Act 2016.
• Act in the company’s best interest, not for personal or external gain.
Examples:
• Issuing shares to raise capital for legitimate business purposes.
• Avoid blocking valid shareholder requests for meetings or decisions.
• Ensuring accountability for actions that may harm the company.
________________________________________ 2. Duty to Avoid Conflicts of Interest
Directors must not:
• Use company property, information, or opportunities for personal gain.
• Engage in competing businesses or transactions without proper disclosure and approval.
Requirement: Declare any conflict of interest at the earliest board meeting and abstain from voting on related matters.
________________________________________ 3. Duty to Exercise Care, Skill, and Diligence
Directors must perform their duties with reasonable care and skill. This includes:
• Making informed business judgments based on reliable and appropriate information.
• Ensuring decisions are in the company’s best interest.
• Maintaining high standards of professionalism regardless of position (executive or non-executive).
Business Judgment Standards:
• Acting in good faith for proper purposes.
• Avoiding material personal interests in decision-making.
• Relying on competent officers, professionals, or committees for advice.
________________________________________ 4. Delegation of Powers
Directors can delegate responsibilities to qualified individuals or committees, provided:
• The delegation aligns with the company’s constitution and laws.
• The director remains accountable for the delegatee’s actions and ensures reliability and competence.
________________________________________ 5. Implementation of Internal Controls
For public companies or subsidiaries, directors must:
• Establish systems to safeguard company assets from unauthorized use.
• Ensure accurate transaction records for financial reporting.
________________________________________ Liability and Accountability
Directors who breach their fiduciary duties can face penalties, including personal liability for company losses. Compliance with these duties is critical to uphold the company's integrity and reputation.
Malaysia
