Directors vs Shareholders:
Directors – They are appointed by the company’s shareholders and are considered the managers of the company.
Shareholders – They are members of the company who own shares and are considered the owners of the company.
Directors:
- At least one director must reside in the country.
- Must be 18 years old or above.
- Must meet the requirements outlined in Section 198 of the Companies Act 2016 (not bankrupt and without any record of commercial crimes, etc.).
i. In accordance with the articles of association/legislation and managing the company ethically.
ii. Making decisions in the best interest of the company by utilizing knowledge and experience while avoiding any conflicts of interest.
iii. Ensuring compliance with all accounting, tax, and auditing requirements.
iv. Managing the company’s day-to-day operations within the scope of authority.
v. Gathering information to make decisions or prepare reports for the company.
vi. Being entitled to a salary and director’s fees approved by shareholders.
vii. Authorizing the issuance/transfer of company shares.
viii. Signing contracts on behalf of the company, such as with bank loans.
Shareholders:
- Shareholders are company members who own company shares.
- Limited liability (for the invested capital).
- A maximum of 50 shareholders for an Sdn Bhd.
- Provide financial support to the company, indirectly controlling its operations.
i. Formulating and amending the articles of association (if any).
ii. Appointing or dismissing company directors.
iii. Approving the buying and selling of company assets.
iv. Participating in significant company decisions.
v. Authorizing directors to issue/transfer shares.
vi. Appointing or dismissing auditors.
vii. Nominating directors and proposing share resolutions.
viii. Receiving dividends based on the company’s annual profits.
ix. Having the priority to purchase newly issued company shares.
x. Convening shareholder meetings.
xi. Questioning decisions made by directors.
