Shareholder Meetings in Malaysia

Introduction

Company meetings are where resolutions are passed and where decisions regarding the companies’ management, administration and business direction directions are made.

According to Sharp v Dawes, a meeting is a coming together of more than 1 person. As such, there must be at least 2 persons for a meeting to be valid.

However, the Company Act 2016 (“CA”) recognises certain situations where a meeting can be held despite only having one member in attendance. For example, there can be a meeting of one person by virtue of s9(b) CA which allows a company to be set up by only 1 member. Other examples include s344(1) CA which also provides for the effect of decisions made by a company with a sole member and s328(1) CA provides that the quorum for a company with a sole member is 1 person.

Types of General Meetings

a) Annual General Meeting (AGM)

S340(1) CA provides that only public company is required to hold an AGM. As per, s340(3) CA, the AGM must be called within 18 months of date of incorporation. Besides, s340(1) CA stated that subsequent AGM must be held once every calendar year (i.e. from 1st January until 31st December). Also, as mentioned in s340(2)(a) CA, an AGM must be held within 6 months of the company’s financial year. According to s340(2)(b) CA, the second and third AGM shall not have a gap of more than 15 months.

However, the registrar may extend the time to hold the AGM should a company apply to do so. The AGM cannot be held later than extended time granted by the registrar as mentioned in s340(4) CA. It should be noted that failure to hold AGM is an offence under s340(6) CA.

Under s340(5) CA, when a company fails to call an AGM, any member may apply for a court order to hold an AGM. However, as per Humes Ltd v Unity APA Ltd, a shareholder cannot convene a meeting if the purpose of calling the meeting was something other than the passing of particular resolutions set out in the notice of meeting.

b) Extraordinary General Meeting (EGM)

EGM is applicable to both public and private companies. It is used for special business which cannot be delayed until the next AGM. Only the Board of Directors (“BOD”), members and the Court has the power to call for an EGM.

In regards to the director’s power to call for an EGM, we may refer to s310(a) CA whereby a meeting of members may be convened by the BOD. S316(1) CA and s316(2)(b) CA states that notice must be given within 14 days if there is no special resolution to be passed. If there is a special resolution to be passed, notice must be given within 21 days as per s292(1) CA.

In regards to members’ power to call for an EGM, they may either convene a meeting or require the directors to convene an EGM. S310(b) CA states that a member who holds at least 10% of issued capital can convene meeting of members or if the company has no share capital, at least 5% of its members can convene meeting of members. On the other hand, members representing at least 10% of the paid up capital of the company carrying the right of voting or if the company has no share, members representing at least 5% of the total voting rights may have the director convene a meeting.

However, the exception is as per s311(4) CA if the company is a private company and 12 months have lapsed since the last meeting was convened pursuant to s311. However, for companies limited by guarantee, there must be members representing at least 5% of the total voting rights as mentioned in s311(3)(b) CA.

In regards to the power of the court to call for an EGM, s314(2) CA states that The Court may, either of its own motion or on the application of a director of the company; of a member of the company who would be entitled to vote at the meeting; or of the personal representative of any such member, order a meeting to be called, held and conducted in any manner the Court thinks fit. However, as per s314(1) CA, the court may only do so if for any reason it is impracticable  to call for a meeting of members of a company in any manner in which meetings of that company may be called; or to conduct the meeting in the manner prescribed by the constitution or this Act.