Running a company is no simple work. That’s why the role of a Company Director is crucial to the success of the business’s operations. Asides from controlling the business’s operations, directors are also expected to act according to their responsibilities and expected duties. Failure to do this would result in a breach of company law and be considered a criminal offense. Before assuming their role, every company director would learn about their responsibilities and duties. Directors must know they are separate from those of the company’s owners. This piece will reveal essential information about what it takes to be a company director Malaysia.

Who Can Be A Director In Malaysia?

The first thing to learn about directors and shareholders in Malaysia is those qualified to serve in the role. Many people may wish to be in the role of a company director, but only a few would be able to accomplish this achievement. It’s essential to understand this distinction before getting started. Anyone who falls under these categories qualifies to be a director of a company in Malaysia:

  • Anyone 18 years or older
  • You must be a natural person
  • Must be free of any mental illness
  • Must reside in Malaysia
  • Must not have filed for bankruptcy
  • Must not have been imprisoned for more than five years
  • Must not have been convicted within or outside Malaysia under offenses involving briber fraud, promotion offenses, or those related to company management and formation, dishonesty, and violations under sections 213, 217, 218, 228, or 539 of the companies act 2016.

Roles Of A Director

Next, we’ll review the roles of the director of a private limited company or public company. The roles of a director vary from activities relating to regular business operations and coordinating administrative affairs. These roles include;

  • Calling for meetings – annual, general meetings. board meetings, and extraordinary general meetings.
  • Making crucial decisions for the company
  • Manage and control the company’s activities and operations
  • File any required statutory documents. The process of filing these documents may be delegated to someone else, but they’ll carry it out as part of the director’s responsibilities.

What art the Duties Of A Director?

It’s essential to make a clear distinction between the roles and duties of a director. Duties describe what’s expected from a director in his capacity. A director must fulfil both fiduciary and statutory duties. This is the only way you can rest assured that the director is acting in the company’s best interest.

Fiduciary Duties Of A Director

These are the fiduciary duties of a director;

  • Act in the best interest of the company
  • Prevent a conflict of interest between personal and business affairs
  • Avoid taking any profit out of business for personal motives

Statutory Duties Of A Director

These are the statutory duties of a director;

  • Serve the company in good faith and for ideal purposes
  • Disclose interest in any contract or proposed contract signed by the company
  • Gain company approval during general meetings before transactions are processed.
  • Provide notice to the company regarding shareholdings and any changes that have been made
  • Ensure that registers and statutory books are updated regularly

What Are The Liabilities Of A Director?

Directors may be held liable for failing to fulfil the following responsibilities;

  • Responsibilities stipulated by Insolvency law
  • False reporting that leads to substantial losses
  • Providing illegal distributions
  • Inability to settle debts

If a director breaches the laws of a company, it may be considered as a criminal offence. This type of offence usually results in fines. Penalties for breaching company law include;

  • Compounding
  • Delisting
  • Minimum or maximum fines based on the law in question
  • Reprimands
  • Lack of access to the stock market

How to Appointment Of A Director?

The first stage of appointing a company director is to notify the company secretary. The company secretary will create forms pursuant to section 201and 58 of the Companies Act 2016 and in response to a board resolution. The board of directors of a company should agree to the appointment of a new director.

As soon as this appointment is completed, the company secretary will submitstatutory forms along with company resolutions to the Companies Comission of Malaysia (SSM). These are the documents that will be submitted to the Companies Comission of Malaysia;

  • pursuant to Section 58 of the Companies Act 2016;
  • Director’s Passport / NRIC
  • Extract of Director Resolution in Writting

How Can We Help?

As mentioned earlier, a company director is an essential part of the business operations of an organization. That’s why every business has to take their inclusion seriously. If you’re about to start a company or want to add directors to your business, you’ll need professional help.

At Premia TNC, we can help you with setting up the process for creating company directors. As a top-rated business consultancy company, we know everything it takes to run a successful business. We understand that the Malaysian market is a strategic location and can provide a sustainable economy. That’s why we want to work with businesses to ensure their directors are seamlessly introduced to the business.

Our duty is to make your business better. And we’ll do that from the top down.

Are Fiduciary Roles Of A Director Distinct From Statutory Roles?

The director of a company is expected to have two roles - statutory and fiduciary roles. Directors are expected to follow both roles to act in the best interest of the company.

Who is the director of a company?

The director of a company is one of its most essential aspects of its business operations. The director is responsible for driving the company towards its goals. The director could be a man or woman depending on acceptable regulations.

Are directors liable for difficulties faced by the company?

A director is responsible for driving the company forward. This means that he or she will be responsible for the company’s decisions. However, a director may be liable for failure to fulfil certain responsibilities. In such instances, the director will be fined.