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Shareholders’ rights and duties in Malaysia.

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Shareholders’ rights and duties in Malaysia

Another important role in a Malaysian company is the shareholder. All companies are required to have a shareholder who must take part in the management and operation of the company. This guide will outline key rights and duties of shareholders in Malaysia.

Let’s start.

What is a shareholder?

A shareholder is a person who owns one or more shares in a company and are the owners of the company.

Shareholder requirements in Malaysia

A private limited company must have a minimum of one shareholder and a maximum of 50 shareholders.

Company shareholders can be individuals or corporate bodies.

Rights of a shareholder

A shareholder in Malaysia has the following rights:

  • Attend and participate at company meetings
  • Receive dividends
  • Vote on the appointment directors
  • Access information concerning the company’s affairs
  • Purchase new shares issued by the company
  • Sell shares
  • Sue directors for breach of duty
  • Nominate directors and propose shareholder resolutions
  • Vote at general meetings

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What are the roles and duties of a shareholder?

The role of a company shareholder are:

  • Amendment of the company’s constitution
  • Appoint and remove company directors through an ordinary resolution
  • Appoint or remove auditors
  • Approve directors’ remuneration
  • Issue additional shares or increase paid-up capital
  • Approve financial statements
  • Approve or rejecting the disposal and purchasing of property under the company name
  • Approve transactions of more than RM 250,000 or between RM 50,000 and RM 250,000 if more than 10% of net assets are owned by the company

Shareholders’ agreement

What is a shareholders’ agreement?

A shareholders’ agreement is an agreement specifies the relationship between the shareholders and the company’s management usually used in medium and large companies. It also concerns the ownership of shares and shareholders protection.

Shareholder agreement clauses

Common clauses that are included in the shareholders’ agreement are:

  • Objective – company objective is agreed upon in the shareholders agreement and any change of business will require the approval of shareholders
  • Authorised and issued capital – authorised share capital, par value of the shares, timing for the issuance of the shares and agreed and paid-up capital
  • Obligations of parties – explain the contribution of each shareholder to the company
  • Pre-emption rights – each shareholder must offer other shareholders the right to acquire shares prior to its sale or disposal of shares to a third party
  • Management team – shareholders specify the persons they are entitled to appoint
  • Reserve matters – matters that constitute reserve matters and the level of voting required
  • Deadlock – provisions converting the exit of shareholders in the event that a matter in dispute cannot be solved
  • Confidentiality – all shareholders are to keep information confidential
  • Dispute resolution – the preferred mode of resolving disputes, mediation, arbitration or courts
  • Financing – the preferred mode of financing. Shareholders also state if they agree to provide guarantees or other financial assistance


Companies in Malaysia require a minimum of one shareholder and a maximum of 50. In addition to owning the company shares, the shareholder also have other duties and rights related to running the company. Contact Acclime for advice on a shareholders’ role.

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