COMPANY LAW IN MALAYSIA

Meetings

Presented by : Nurul Ilmiah binti Mohd. Zulkarnain

Muhammad Zulkefli bin Abdullah Norazwani binti Azizan Mohammad Azmer bin Ahmad @

Mazlan

Meeting

What is a Meeting?• Definition• Exception

Types of Meetings• Statutory

Meeting• Annual General

Meeting• Extraordinary

General Meeting

Notice of Meeting• To whom• Method• Period• Contents

Proceedings at Meeting• Venue• Quorum• Proxy• Chairman• Vote

Resolution• Types of

Resolution• Special notice• Resolution in

writing

Post Meeting Requirements• Lodgement with

ROC• Minute book

What is a Meeting?

• Gathering of more than one person

Exception

- Sole member- A meeting can be held despite the

attendance of only one member- Fulfills the purposes of the Act- In certain peculiar situations

• Wholly owned subsidiary

By parent/holding companySeparate legal entitiesMust hold members’ meeting Sect 147(6) - parent company’s corporate representative – to sign

on the minutes. (page 175) Illustration Corporate representative – company’s subsidiary or another

company which the appointor company has shares

• One person holds shares of a particular class in a company

Types of Meetings

Statutory Meeting Annual General Meeting (AGM)

Extraordinary General Meeting (EGM)

Statutory Meeting• Once in its lifetime by public company• Sec 142(1) - every public company limited by shares must hold

statutory meeting between 1-3 months after it is entitled to commence business

• When it is issued with Form 23 by Registrar of Companies (ROC) (page 419)

• Sect 218 (1)(b) – the Court may order the winding up if – default is made by the company in lodging the statutory report or in holding the statutory meeting (page 231)

• Full and frank disclosure by promoter

Before the meeting

During the meeting

Agenda of the meeting –formation & matters arising in

report

A list of members together with

respective shareholdings

Duly certified by at least 2 directors

Statutory report

Statutory report

1. Number of shares allotted and

consideration

• Fully paid up or partially paid up

• Paid in cash, in kind or both

• Total cash received for the shares allotted

2. Account

• Moneys received & paid

• Preliminary expenses

3. Names and addresses

• Directors• Managers• Secretaries• Auditors• Trustees for

debentures holders

4. Contracts

• Approval of members

• Proposed modifications

AGM

• At least once every calendar year– Company’s audited accounts will be tabled (Sect 169(1)) (page 191)– Auditors are appointed (Sect 172) (page 198)– Directors are elected– Dividends are declared

• Interest of both officers and members

• Sect 143(1)- First AGM must be held within 18 months after incorporation

- 15 months after the last preceding AGM• Sect 169(1)- 6 months from the end of the financial year• May apply to ROC for an extension of time• What if the company fails to hold AGM?

Sect 143(4)- (a)…shall be guilty of an offence against the ActMembers lose opportunity to query the directors

EGM

• Usually constitutes special businesses, which are urgent and cannot be delayed until the next AGM

• Convened by the board of directors

• The EGM must be held not later than 2 months after receipt of the request by the directors

Sect 144 Sect 145

Requirements Company with share capital: ≥ 10% of paid up capital

Company with share capital: ≥ 10% of issued capital

Company with no share capital: ≥ 10% of voting rights

Company with no share capital: ≥ 5% members

Preparation of meeting Company, failing which members Members

Expenses Company Members

NOTICE OF MEETINGTO ALL MEMBER

TO AUDITOR

PERIOD

• That is important members are given sufficient notice of the meeting because members have opportunity to query the directors on the operations a and affairs of the company

• NOM contains information like the venue, date and hour of meeting and the business transacted

• The notice may be either given personally or sent by prepaid post to each member

TO ALL MEMBER

Section 145(4):

• Notice of the meetings must be given to all members of the company who have right to attend and vote

• Meeting will be void if fail to give notice to all members• Must be given to all persons whose names appear in the company’s Register of

Members

Section 145(5):

• The meeting if the omission to give the notice accidental

• To preserve the meeting where the company did not deliberately omit serving the notice on a member

Case 1: Musselwhite v Musselwhite (1962)• Some member executed transfers of

their shares to the third parties but the shares had yet to be transferred

• Their names remained in the Register of Members

• The company did not give them notice of meeting

• The court held that this was an intentional omission and the meeting was held to be void

Case 2: Re West Canadian Collieries Ltd (1962)

• Failure to give the notice to nine members was due to an administrative error

• The court held that was an accidental omission

• The omission did not void the meeting

The meeting may still be validated by the application of section 355(1) which provide that:

“No proceeding under this Act shall be invalidated by any defect, irregularity or deficiency of notice or time unless Court is opinion that substantial injustice has been which cannot be remedied by any order

of the Court”

Section 355 does not apply if there is injustice to a member who did not receive the notice and did not attend the meeting

PERIOD• The number of day required to be given to the

members

• According to Section 145(2A), the company give notice at least 21 day2 to its members

• For private company, only 14 days’ notice to its members

EXTRAORDINARY GENERAL MEETING

• Section 145(2), an EGM needs to give only 14 days

• For the special resolution, at least 21 days based on section 152(1)

Proceeding at

Meeting

Venue

Vote

Chairman

Quorum

Proxy

Venue• Section 145 A

Where?Anywhere in MalaysiaNot necessary at registered officeMore that one venue

How?Technology

Quorum• Section 147(1)

DefinitionMinimum number of members who must be present at the meeting.Unless the AOA provide otherwise.

• Table A Article 47Members shall include proxy

Proxy• Section 149(1)

Every member who is entitled to attend meeting has a statutory rightto appoint a proxy.

Proxy is a person who has been authorizedby a member to attend meeting on his behalf

• Section 149(1)(b)

Qualification of ProxyAnother memberAn advocate (lawyer)An approved company auditorA person approved by ROC

Tan Guan Eng b BH Low Holding Sdn Bhd (1992)Lim Hean Pin v Thean Seng Co Sdn Bhd & Ors

(1992)

• Section 149(1)(c)

Maximum number of proxyMay appoint a maximum of two proxies

• Section 149(1)(d)Appoint two proxies shall be invalid unless a

specifies proportions of his holding to be represented by each proxy.

Illustration

• Section 149(1)

Powers of ProxyAttend meetingSpeak at meetingVote on poll but not hand

Right of MemberIssue: whether a member who has appointed a proxy

may continue exercise his rights to attend the meeting and vote?

Cousins v International Brick Co Ltd (1931)

Termination of appointment

Submitting a notice before the meetingProxy dies or unsound mind before meetingTransfer all share before meeting

Chairman• Section 147(1)(b)

Who?Member can elect any member to be a chairmanUnless AOA provide otherwise.

Right of ChairmanConduct of meetingEnsuring meeting is properly conductedByng v London Life Association (1990)

Vote• Section 148(1)

Exceptions:Suspended until the member has paid all calls

or other sums payable in respect of his share.Suspend the right of preference shareholders to

attend and vote at general meeting upon such conditions stated therein

Illustration

Vote by show of hands

Easier and quickerEntitled to one vote

Vote on poll

• Section 149(1)(a) Proxy may vote on poll

• Section 146(1)(a) Excluding the right to demand a poll at general meeting on any

question or matter other than the election of chairman shall be void.

• Section 146(1)(b) Carried out if demanded At least 5 members present who has voting power Member with at least 10% of voting power present at meeting Member with at least 10% of paid-up shares present at meeting

RESOLUTION- Decision made by the members at the

general meetings

ORDINARY RESOLUTION

SPECIAL RESOLUTION

HYBRID RESOLUTION

ORDINARY RESOLUTION REQUIRING

SPECIAL NOTICE

CIRCULAR RESOLUTION/

RESOLUTION IN WRITING

TYPE OF RESOLUTIONORDINARY RESOLUTION

• Does not defined in Companies Act 1965. – Bushell v Faith (1970)

• Requires: – More than 50% of the members present and voting– 14 days of notice before a members’ meeting.Some ordinary Resolutions: Issue of shares at discount Alteration of share capital Passing of annual financial reports, reports of BOD and Auditors Appointment of Auditors and their remuneration.

SPECIAL RESOLUTION• S.152 of CA which requires that:

– At least 75% of the members of the company present and voting.– Notice should be given at least 21 days before the meeting.– Must be lodged with the ROC within one month.Some Special Resolution: Alteration of object clause of memorandum and the articles of a company. Change of name of a company. Variation of shareholders rights. Payment of interest out of capital.

HYBRID RESOLUTION

• The hybrid resolution is whereby, the company require to give at least 14 days’ notice to the members but require the support of at least 75% of the votes.

• Requirement for a hybrid resolution to perform:– S.129(6) – the appointment of a director who is above the age of 70 in a private

company which is a subsidiary of a public company.– S.172(7) – the appointment of an auditor to replace the auditor who was

removed at a prior general meeting.Min Days of Notice Min Votes Required

Ordinary Resolution 14 > Than 50%

Special Resolution 21 75%

Hybrid Resolution 14 75%

ORDINARY RESOLUTION REQUIRING SPECIAL NOTICE

• In S.153 of CA – notice of intention given by the members to the company.• Notice must be given by the

members not later than 28 days before the meeting.• Upon receipt of the notice, the

company then must give a notice to the member at least 14 days before meetings.

CIRCUMSTANCES

S.128(2) – removal of a director before the expiration of his term of office

S.172(4) – removal of an auditor at a general meeting

S.258(3) – removal of a liquidator before the expiration of his term of office.

CIRCULAR RESOLUTION / RESOLUTION IN WRITING

• S.152A of CA – a resolution is deemed passed if all members who are entitled to attend and vote at the general meeting of the company signed on the resolution.

• All members may not sign at the same copy of the document.• 2 or more documents containing the proposed resolution may be certified by

the company secretary. – true and correct version• the last member who sign the documents will hold the resolution.

POST-MEETING REQUIREMENTS

LODGEMENT WITH THE ROC MINUTE BOOK

LODGEMENT WITH THE ROCS.145(1) of CA requires a printed copy of the Special Resolution and the resolution or agreement which binds any class of shareholders to be lodged with ROC within t (one) month of the passing resolution or agreement, as the case may be.

SUBJECT TO THE ORDINARY RESOLUTION TO INCREASE ITS AUTHORISED CAPITAL.S.62(4) – lodgement of the resolution with ROC within 14 days.

S.165 – Every company, irrespective of whether it is a company with a share capital or otherwise, to lodge with the ROC its annual return within 1(one) month from the date of its AGM.

MINUTE BOOK

S.156 – the minutes of the proceedings of its general meetings must be entered in the minute book within 14 days from the date of the meeting.

S.157 and S.359(1) – the book containing the minutes of the proceeding of any general meeting shall be kept at the company’s registered office and shall be made available for inspection by any member of the company.

The evidence of minutes which have been signed by the chairman of that meeting or by the chairman of the next meeting are: • The meeting has been duly held and

convened• The proceedings have been duly held• The appointments of officers or liquidators

made at the meeting are valid.