# Corporate and commercial law in Malaysia for business owners Tai & Khan Partnership's corporate and commercial lawyers in Petaling Jaya act for Malaysian companies and their owners. They draft and review shareholder agreements, constitutions, founders' terms, IP assignments and contracts with directors, staff and customers. They handle share transfers and shareholder disputes. By Tai & Khan Partnership · Reviewed by Harith Khan, Partner Last reviewed 24 October 2026. The law is stated as at that date. Tai & Khan Partnership · Advocates & Solicitors · No. 36A, Jalan SS 21/58, Damansara Utama, 47400 Petaling Jaya, Selangor ## Votes, rights and figures Law and figures as at 24 October 2026. ### Votes | Fact | Figure | Source | | --- | --- | --- | | Ordinary resolution | More than half of the votes cast | Companies Act 2016, section 291 | | Special resolution | At least 75% of the votes cast; more than 25% can block one | Companies Act 2016, section 292 | | Removing a director of a Sdn Bhd (subject to the constitution) | Ordinary resolution at a meeting, 28 days' special notice | Companies Act 2016, sections 206, 297 and 322 | ### Shareholders' rights | Fact | Figure | Source | | --- | --- | --- | | Yearly financial statements | Sent to every shareholder within 6 months of the year end | Companies Act 2016, sections 257 and 258 | | Who must buy a leaving or deceased shareholder's shares | Nobody, without a clause or court order; company if ordered | Companies Act 2016, sections 123, 127 and 346 | | After a shareholder dies (executor or administrator) | Registered within 60 days of their written notice | Companies Act 2016, section 109 | ### Money and filings | Fact | Figure | Source | | --- | --- | --- | | Stamp duty on a sale of Sdn Bhd shares (the buyer pays) | RM3 per RM1,000 or part, on the higher of price and value | Stamp Act 1949, First Schedule, Item 32(b) | | Stamp duty on a shareholder agreement (more if it holds a loan promise) | Usually RM10 per signed copy, within 30 days of signing | Stamp Act 1949, First Schedule, Items 4 and 34 | | Yearly fees of the Companies Commission of Malaysia (SSM) for a Sdn Bhd | RM150 annual return; RM20 or RM50 to lodge the accounts | SSM Registration of Company (ROC) Table of Fees, read 20 October 2026; Companies Act 2016, sections 68 and 259 | | Beneficial owner to be declared (register kept since 1 April 2024) | A natural person with 20% or more, or with control | Companies Act 2016, sections 60A to 60E; SSM Guidelines on Beneficial Ownership (revised 10 January 2025) | ## Which is your situation? - **We own 50/50 and we are stuck**: Neither can outvote the other. The five ways out, and what a court can order. - **My partner wants out, or a shareholder has died**: Nobody has to buy the shares without a clause or a court order. What happens to them, and who can sign. - **The majority keeps me out of the accounts**: What a minority shareholder is entitled to see, and when the High Court can act under section 346. - **My name is on the shares, but they are not mine**: Holding shares or a directorship for someone else, or putting yours in another name: the duties and the risk. - **We are starting a business together: Sdn Bhd or Enterprise?**: Who pays the debts, the yearly fees of the Companies Commission of Malaysia (SSM), and the rules if nothing is agreed. - **One of us brings the money, the other does the work**: No law fixes the split. Shares for cash or for work, a loan or shares for the cash, and what 51% or 75% controls. - **Do we need a shareholder agreement?**: Not by law, though two or more owners should have one. What it covers, what sets the fee, and the usual RM10 stamp duty. - **I am a foreigner. Can I own a company in Malaysia?**: Yes, 100% in most businesses. One director must live here, some licences limit foreign shares, and shares give no right to work. ## What the law says in each situation Each answer states what Malaysian law and the courts say, not advice on your own case. The first paragraph is the short answer. ### We own 50/50 and cannot agree on anything. What now? In a 50/50 Malaysian Sdn Bhd, neither owner can usually pass a shareholders' resolution alone. An ordinary resolution needs over half the votes cast, and the Companies Act 2016 gives shareholders no casting vote (sections 291 and 292). Ways out: talks, a deadlock clause, a buy-out, a joint closure or a court order. Read your constitution first: articles based on the old Table A give the chair of a shareholders' meeting a casting vote, and many older companies still run on them (section 619). At board level, a chairperson the board elected has a casting vote unless the constitution says otherwise (section 212; Third Schedule). On an oppression application the court can order one owner to buy the other's shares, but a tied vote alone is not oppression: the court looks at conduct (section 346). Either owner can also petition for a just and equitable winding up (section 465(1)(h)). Deadlock between equal owners is the classic case for that petition, but the court decides, and it treats closing a trading company as a drastic step. Read the guide: [50/50 shareholder deadlock in a Malaysian Sdn Bhd: what you can do](https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia) (markdown: https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia.md) ### My partner wants to leave, or a shareholder has died. What happens to the shares? A Malaysian Sdn Bhd shareholder cannot resign; the usual exit is a transfer. Nobody has to buy the shares without a clause or court order, and the company can buy them only by court order (Companies Act 2016, sections 105, 123 and 346). On death they pass by transmission to the executor or administrator (section 109). The buyer is another shareholder or an outsider the constitution allows. The Act sets no price formula: the price is agreed, or an independent valuer fixes it under a signed clause. A request for "my capital back" (退股) needs a formal capital reduction, the redemption of redeemable preference shares, or a court order (sections 72, 115 to 119 and 346). After a death, the executor, administrator or person named in a distribution order gives the company written notice, and it has 60 days to register them (section 109). Before a grant or distribution order exists, no family member can sign for shares the deceased held alone. No law makes the surviving owners buy the shares; without a death clause, the heirs may become co-owners. Read the guide: [What happens to Sdn Bhd shares when a shareholder leaves or dies?](https://www.tkp.com.my/publications/shareholder-leaves-or-dies-malaysia) (markdown: https://www.tkp.com.my/publications/shareholder-leaves-or-dies-malaysia.md) ### The majority keeps me out of the accounts. What can a minority shareholder do? Any Malaysian Sdn Bhd shareholder may see the financial statements, register of members and shareholders' minutes; under the Act, a non-director has no right to inspect the accounting records (Companies Act 2016, sections 55, 245, 257 and 342). If a shareholder is treated unfairly, the High Court can act (section 346). The company must send every shareholder the financial statements within six months of its year end (sections 257 and 258); the accounting records are for the directors and the auditor (sections 245 and 266). Put each request in writing; a court can order a company that still refuses to comply (section 351). Oppression, often called 大欺小, is more than being outvoted. Section 346 reaches conduct that is oppressive to a shareholder, disregards their interests or unfairly discriminates against them. The court may then make any order it thinks fit, such as cancelling a transaction, a buy-out of the applicant's shares or winding up (section 346(2)). A claim for money taken from the company is usually the company's, brought in its name with the court's permission (sections 347 and 348). Read the guide: [Minority shareholder rights in Malaysia: what can you do?](https://www.tkp.com.my/publications/minority-shareholder-rights-malaysia) (markdown: https://www.tkp.com.my/publications/minority-shareholder-rights-malaysia.md) ### Shares or a directorship held on paper for someone else: is it legal? Holding shares or a directorship for someone else is not, by itself, an offence in Malaysia, but it carries risk. The company acts on its register, a director on paper carries a director's full duties, and a real owner with 20% or more, or control, must be declared (Companies Act 2016, sections 60C, 60D, 101 and 213). A nominee director (挂名董事) must act in good faith in the company's best interest and with reasonable care, and must not put their appointer first; a breach is an offence (sections 213 and 217). An arrangement to evade a law or to hide assets from creditors is void, and a court may refuse to help either side (Contracts Act 1950, section 24). A real owner whose shares sit in another name must prove a trust, since the register names the nominee (挂名股东) as owner (section 101). If the nominee refuses to sign a transfer back, the owner can sue for a declaration of trust and correction of the register (section 103). Delay can lead a court to treat the shares as a gift. Read the guide: [Is it legal to be a nominee shareholder or director in Malaysia?](https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia) (markdown: https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia.md) ### Starting a business with a partner: Sdn Bhd or Enterprise? In Malaysia an Enterprise owner or partner pays its debts personally, without limit; a Sdn Bhd shareholder generally risks only any amount unpaid on the shares (Companies Act 2016, section 10; for partners, Partnership Act 1961, section 11). With nothing agreed, default rules decide each owner's share, say and exit. An Enterprise is a sole proprietorship or partnership registered with SSM, open only to a Malaysian citizen or permanent resident; a Sdn Bhd (sendirian berhad) is a private company limited by shares. SSM's yearly charge for an Enterprise is RM30 or RM60. For a Sdn Bhd it is RM150 for the annual return plus RM20 or RM50 when the financial statements are lodged, and the company also pays for a secretary, accounts, a tax return and, unless exempt, an audit (SSM fee tables, read 20 October 2026). In a partnership with nothing agreed, the Partnership Act 1961 shares profits and losses equally, pays nobody for working, lets any partner end a partnership with no fixed term by notice, and dissolves it when a partner dies (sections 26, 28 and 35). Read the guide: [Sdn Bhd or Enterprise in Malaysia: which one, and the cost each year](https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia) (markdown: https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia.md) ### One partner brings the money, the other does the work. How do we split the shares? No law in Malaysia fixes how partners split a Sdn Bhd's shares. A company may issue shares for cash or for work, and a money partner's cash may buy shares or be lent to the company. New shares are reported to SSM on a return of allotment (Companies Act 2016, sections 75 and 78). More than half of the votes cast passes an ordinary resolution; at least 75% passes a special resolution, so a holder of more than 25% can block one (sections 291 and 292). Shares for work (sweat equity, 人力股) are lawful: the Act allows shares paid up otherwise than in cash, with the work contract lodged with the return of allotment (section 78). Once issued as fully paid, they stay with a partner who stops work unless a signed leaver clause, the constitution or a court order says otherwise (sections 70 and 105). While the company runs, share capital comes back only by a capital reduction, redeemable preference shares or a court order; a loan is repaid on its terms (sections 72, 115 to 119 and 346). Read the guide: [How do you split shares in Malaysia when one partner puts in money and the other does the work?](https://www.tkp.com.my/publications/split-shares-money-and-work-malaysia) (markdown: https://www.tkp.com.my/publications/split-shares-money-and-work-malaysia.md) ### Do we need a shareholder agreement? A Malaysian Sdn Bhd may run without a shareholder agreement: no law requires one, and SSM does not ask. Without one, the Companies Act 2016 and the constitution decide a deadlock, exit and death (section 31). Stamp duty is usually RM10 a copy, within 30 days of signing (Stamp Act 1949, First Schedule, Items 4 and 34). The agreement is the owners' private contract on running the company and on what follows when one leaves, dies or disagrees. Its usual subjects: board seats, decisions needing every owner's consent, share transfers, a tie, an exit or a death, the accounts owners see, dividends, new money and disputes. A right that must bind the company, such as a right to name a director, belongs in the constitution too: an ordinary resolution can remove a director unless the constitution says otherwise (Companies Act 2016, sections 33 and 206). A promise not to compete after leaving is generally void in Malaysia (Contracts Act 1950, section 28). Confidentiality and a narrow, short non-solicitation clause protect the company; a wide one may be void. Read the guide: [Shareholder agreement in Malaysia: do you need one, what it covers, what it costs](https://www.tkp.com.my/publications/shareholder-agreement-malaysia) (markdown: https://www.tkp.com.my/publications/shareholder-agreement-malaysia.md) ### Is 100% foreign ownership of a Malaysian Sdn Bhd allowed? A foreigner can own 100% of a Malaysian Sdn Bhd in most businesses: the Companies Act 2016 sets no nationality or equity rule for owners, but one director must ordinarily reside here (section 196(4)). Some licences limit foreign shares, and shares give no right to live or work here (Immigration Act 1959/63, section 6). Above 50% foreign voting rights, a wholesale, retail or e-commerce business is expected to get KPDN approval (Ministry of Domestic Trade and Cost of Living). For an Employment Pass, the usual work pass, Immigration's Expatriate Services Division (ESD) sets a paid-up capital floor: RM500,000 if 100% foreign-owned; RM1,000,000 where foreigners hold 51% or more in wholesale, retail and trade or a service on KPDN's unregulated-services list (ESD Online Guidebook V6, 14 April 2025). Company law sets no minimum share capital (sections 9 and 74). Putting the company in a Malaysian's name to get round a licence, equity or immigration rule is the kind of arrangement a court treats as void (Contracts Act 1950, section 24), and the real owner must be declared (sections 60A to 60D). Read the guide: [Can a foreigner own a company in Malaysia? Sdn Bhd rules, licences and work passes](https://www.tkp.com.my/publications/foreigner-own-company-malaysia) (markdown: https://www.tkp.com.my/publications/foreigner-own-company-malaysia.md) ## All corporate articles Every guide the firm has published on company and shareholder law, newest first. Each one names its author, cites its sources and shows its review date. - [How do you split shares in Malaysia when one partner puts in money and the other does the work?](https://www.tkp.com.my/publications/split-shares-money-and-work-malaysia): No law in Malaysia fixes the split. A Sdn Bhd can give shares for cash or for work (sweat equity), the cash can buy shares or be a loan, and what protects both partners is a signed agreement made before the money goes in or the work starts, with any new shares filed with SSM. (markdown: https://www.tkp.com.my/publications/split-shares-money-and-work-malaysia.md) - [Can a foreigner own a company in Malaysia? Sdn Bhd rules, licences and work passes](https://www.tkp.com.my/publications/foreigner-own-company-malaysia): A foreigner can own 100% of a company (Sdn Bhd) in Malaysia in most businesses: the Companies Act 2016 sets no nationality or equity rule. But one director must live in Malaysia, some licences limit foreign shares, and owning a company gives no right to live or work here. (markdown: https://www.tkp.com.my/publications/foreigner-own-company-malaysia.md) - [Sdn Bhd or Enterprise in Malaysia: which one, and the cost each year](https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia): An Enterprise in Malaysia renews for RM30 or RM60 a year, but its owner is personally liable for its debts. A Sdn Bhd limits that risk but costs more each year: SSM fees, a secretary, accounts, tax filing and an audit unless exempt. With a partner, put the terms in writing before you register. (markdown: https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia.md) - [Is it legal to be a nominee shareholder or director in Malaysia?](https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia): Being a nominee shareholder or director is not itself an offence in Malaysia but carries real risk: the company deals with the registered name, a nominee director has full duties, a real owner with 20% or control must be declared since 2024, and a court may refuse help for an unlawful purpose. (markdown: https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia.md) - [Minority shareholder rights in Malaysia: what can you do?](https://www.tkp.com.my/publications/minority-shareholder-rights-malaysia): Own less than half of a Malaysian Sdn Bhd? You still have rights: yearly financial statements, the register of members, a block on special resolutions above 25%, and the right to ask the High Court for an order under section 346 of the Companies Act 2016 if the company is run unfairly against you. (markdown: https://www.tkp.com.my/publications/minority-shareholder-rights-malaysia.md) - [What happens to Sdn Bhd shares when a shareholder leaves or dies?](https://www.tkp.com.my/publications/shareholder-leaves-or-dies-malaysia): A partner cannot just quit a Malaysian Sdn Bhd, and the others cannot simply vote them out: the shares must be sold or given away, and nobody has to buy without a clause or a court order. When a shareholder dies, the shares pass by law to the executor or administrator, not straight to the family. (markdown: https://www.tkp.com.my/publications/shareholder-leaves-or-dies-malaysia.md) - [50/50 shareholder deadlock in a Malaysian Sdn Bhd: what you can do](https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia): In a Malaysian Sdn Bhd owned 50/50, neither shareholder can outvote the other. This guide explains the five ways out under the Companies Act 2016, what you must still file, and how to leave. (markdown: https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia.md) - [Shareholder agreement in Malaysia: do you need one, what it covers, what it costs](https://www.tkp.com.my/publications/shareholder-agreement-malaysia): A shareholder agreement is not compulsory in Malaysia, but a Sdn Bhd with two or more owners should have one. Without it, the Companies Act 2016 and the company's own rulebook (its constitution) decide exits, deadlock and deaths. Stamp duty is usually RM10. (markdown: https://www.tkp.com.my/publications/shareholder-agreement-malaysia.md) ## How the firm works with a business Whether a business is starting out, running or making a deal, our aim is the same. We help put the terms in writing while everyone still agrees, to lower the risk of a costly dispute later. We take on that legal work so you can focus on building a great business. Already in a dispute? We also act for owners who have fallen out: advice, letters, negotiation and, if needed, a court application. ## What the firm does for companies and their owners Below are the firm's documents and court work, grouped under the three ways it works with a business. Each document is drafted with the same aim: terms that are clear and in writing, to lower the risk of a costly dispute later. ### Setting up a business Before money goes in or the work starts, we help the owners agree the rules in writing: who puts in what, who decides what, and what happens if one of them leaves. The agreement and the constitution are drafted to match. - **Shareholder agreements**: Drafting and reviewing the agreement between the owners of a Sdn Bhd, and the constitution clauses that must match it. - **Company constitutions**: A constitution that binds the company and every shareholder, drafted or amended to match the owners' agreement. - **Founders' terms**: Written terms between founders on money, work, shares and exits, settled before the company is registered or the work starts. - **IP assignments**: Documents that move a trademark, software or other intellectual property from a founder into the company. ### Running an established business As the business grows and changes, we update its agreements to match: a new partner, new shares, a director or employee joining or leaving, a contract renewed. If the owners fall out, we advise and act for a shareholder. - **Director service agreements**: The agreement between a company and a director who works in it: the role, the pay, the duties and how it ends. - **Employment contracts**: Contracts of employment for a company's staff, and the terms that go with them. - **Shareholder disputes**: Advice and court work when owners fall out: oppression applications under section 346, derivative actions and winding up. ### Making a deal or a contract When owners sell or buy shares, an investor joins, or the business signs a supply or service contract, we advise on the terms and prepare the documents. The aim is terms that are clear and in writing before anyone signs. - **Share transfer documents and stamping**: The instrument of transfer, the sale agreement and the stamp duty return for a sale or gift of Sdn Bhd shares. - **Commercial contracts**: Supply, service, distribution and other contracts between a company and its customers or suppliers. ### How a matter starts 1. **Send the documents**: Send any constitution, shareholder agreement, contract or letters by WhatsApp or email, with a few lines on the business and what you need. 2. **Scope and fee in writing**: The firm sets out what the work involves and quotes its fee in writing before any work starts, so you know the plan before you commit to it. 3. **The work**: Drafting and negotiation aimed at terms that are clear and in writing, or a court application, with the firm keeping you informed at each step. The firm sets out the scope of the work and its fee in writing before any work starts. The Legal Profession (Publicity) Rules 2025 do not let a law firm publish its fees, so this page gives none. ## What the legal terms mean - **Shareholder agreement**: A shareholder agreement (perjanjian pemegang saham; 股东协议) is a private contract among a company's owners on how they will run it and on what happens when one of them leaves, dies or disagrees. It binds only the owners who sign it, and the courts enforce it between them. - Source: A contract (Contracts Act 1950); no statute requires one - **Constitution**: A constitution is a company's own rulebook (perlembagaan syarikat), not the Federal Constitution. Once adopted it binds the company and all its shareholders, and anyone may inspect it at SSM. Older companies call it the memorandum and articles of association. - Source: Companies Act 2016, sections 32, 33 and 601 - **Deadlock clause**: A deadlock clause is a term in a shareholder agreement or a constitution that sets the steps the owners follow when a vote ties: a written notice, a meeting, mediation, then a buy-sell. - Source: A contract term, not a rule of law; the Act gives shareholders no tie-breaker (Companies Act 2016, sections 291 and 292) - **Buy-sell clause**: A buy-sell clause, also called a shotgun clause, is a term under which one owner names a per-share price and the other must then buy or sell at it. It can favour the richer owner, who can name a price the other cannot afford. - Source: A contract term (Contracts Act 1950), not a rule of law - **Leaver clause**: A leaver clause is a term that decides what happens to the shares of an owner who stops working in the business. A good leaver is usually bought out at a fair value set by an independent valuer; a bad leaver, who leaves in breach, may be bought out at a discount. - Source: A contract term; a court may test a discount under Contracts Act 1950, section 75 (no Malaysian case yet on shares) - **Oppression**: Oppression is what lawyers call the remedy in section 346: the High Court's power to make any order it thinks fit when a company's affairs are conducted in a way that is oppressive to a shareholder, in disregard of their interests, or that unfairly discriminates against them. - Source: Companies Act 2016, section 346; Re Kong Thai Sawmill (Miri) Sdn Bhd, Privy Council, 1978 - **Derivative action**: A derivative action is a claim brought in the company's own name, with the court's permission (leave), over a wrong done to the company. The applicant first gives the directors 30 days' written notice, and any money recovered goes to the company. - Source: Companies Act 2016, sections 347, 348 and 350 - **Transmission**: Transmission is shares passing to someone by operation of law, on the owner's death or bankruptcy, with no transfer signed. On a death the company registers the executor or administrator within 60 days of their written notice. - Source: Companies Act 2016, section 109 - **Nominee shareholder**: A nominee shareholder is the person named in a company's register of members who holds the shares for someone else. The company deals with the registered name, and no trust is noted on the register. - Source: Companies Act 2016, sections 101 and 110 - **Beneficial owner**: A beneficial owner is the natural person who ultimately owns or controls a company, never a nominee. SSM counts a holding of 20% or more of the shares or votes, directly or indirectly, including through nominees, or control by other means. - Source: Companies Act 2016, sections 2 and 60A; SSM Guidelines on Beneficial Ownership (revised 10 January 2025) - **Resident director**: A resident director is a director who ordinarily resides in Malaysia, with a principal place of residence here. A Sdn Bhd needs at least one. The test is residence, not citizenship: in the firm's reading, a foreigner whose main home is here on a long-term pass, such as an Employment Pass, qualifies. - Source: Companies Act 2016, section 196(4) - **Sweat equity**: Sweat equity is shares paid for in work instead of money. The Companies Act 2016 allows shares paid up otherwise than in cash, and the company lodges the written contract for the work with its return of allotment. - Source: Companies Act 2016, section 78 ## Corporate law: questions people ask ### My partner and I have fallen out and we never signed anything. What can I do first? In a Sdn Bhd, use the rights the Companies Act 2016 gives every shareholder. Ask the company in writing for the latest financial statements (sections 257 and 258), and to see the register of members and the shareholders' minutes (sections 55 and 342). If you are still a director, inspect the accounting records (section 245). Holders of at least 10% of the paid-up voting shares can make the directors call a meeting (section 311). Read the constitution, keep a copy of every letter and reply, do not sign anything you disagree with, and take advice before you act. Read the guide: [Fallen out and no agreement: the nine first steps](https://www.tkp.com.my/publications/shareholder-agreement-malaysia) (markdown: https://www.tkp.com.my/publications/shareholder-agreement-malaysia.md) ### Should we register a Sdn Bhd, an Enterprise or a limited liability partnership (LLP)? Four things decide it: how much the business could owe, its profit, whether it has partners, and what customers and banks ask for. An Enterprise's owner or partners pay its debts personally, without limit (for partners, Partnership Act 1961, section 11). A Sdn Bhd costs more each year but pays its own debts; a shareholder generally risks only any amount unpaid on the shares (Companies Act 2016, section 10). An LLP sits between the two: a separate legal person whose partners are not personally liable for its debts merely as partners (Limited Liability Partnerships Act 2012, sections 3 and 21). Read the guide: [Sdn Bhd or Enterprise: which one, and the yearly cost](https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia) (markdown: https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia.md) ### Is 51% enough to control our Sdn Bhd? For most shareholder decisions, yes. More than half of the votes cast passes an ordinary resolution, which appoints or removes a director (Companies Act 2016, sections 202, 206 and 291). It is not enough for a special resolution, which needs at least 75% and changes the constitution (sections 36 and 292): the 49% holder can block one. Votes follow shares only on a poll or in a written resolution; on a show of hands each member has one vote unless the constitution says otherwise, so ask for a poll (sections 293 and 330). Daily management belongs to the board, not the shareholders (section 211). Read the guide: [What each percentage can pass, and what it can block](https://www.tkp.com.my/publications/minority-shareholder-rights-malaysia) (markdown: https://www.tkp.com.my/publications/minority-shareholder-rights-malaysia.md) ### I own shares. Why can't I decide how the company is run? Because the board of directors manages the company, not the shareholders, unless the constitution says otherwise (Companies Act 2016, section 211). Shareholders appoint and remove directors by ordinary resolution (sections 202 and 206), approve most new share issues (section 75) and pass special resolutions, but the board sets the bank mandate and runs the business day to day. A shareholder who wants a say over spending can be a director too, or list those decisions as reserved matters in the constitution as well as the shareholder agreement: the agreement alone does not bind the board. Read the guide: [Shareholders and directors: who decides what](https://www.tkp.com.my/publications/split-shares-money-and-work-malaysia) (markdown: https://www.tkp.com.my/publications/split-shares-money-and-work-malaysia.md) ### Does a Sdn Bhd protect my house and savings if the business fails? Generally yes: a shareholder risks only what is unpaid on the shares (Companies Act 2016, section 10). Anyone knowingly party to trading to defraud creditors can be liable without limit (section 540). A personal guarantor owes the company's debt unless the guarantee limits it (Contracts Act 1950, section 81). Directors are liable with the company for unpaid sales tax, service tax and contributions for staff to the Employees Provident Fund (EPF) and SOCSO (social security). A director with 20% or more of the ordinary shares is liable for its unpaid income tax (Income Tax Act 1967, section 75A). Read the guide: [Who pays the business debts: you or the company?](https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia) (markdown: https://www.tkp.com.my/publications/sdn-bhd-or-enterprise-malaysia.md) ### What should two founders sign before they register a Sdn Bhd? A shareholder agreement, with the constitution clauses that must match it. Agree who puts in what, as shares or a loan; who will be a director and who signs at the bank; the decisions both of you must approve; who buys a leaver's shares, at what value and when; what happens on a death; and how a deadlock is broken. The company adopts the constitution by special resolution, usually once it is registered, and it then binds every shareholder, including later ones (Companies Act 2016, sections 32 and 33). Sign the agreement before money goes in or the work starts. Read the guide: [When to sign, and what to ask a lawyer first](https://www.tkp.com.my/publications/shareholder-agreement-malaysia) (markdown: https://www.tkp.com.my/publications/shareholder-agreement-malaysia.md) ### Someone wants to put a company or shares in my name. What is the risk? Three risks. The company deals with the name on its register, and a director on paper is a full director, with every duty of a director (Companies Act 2016, sections 101, 213 and 217). Several laws make a director pay the company's unpaid EPF, SOCSO, sales tax and service tax, whatever their shares. And if the purpose is to evade a licence rule, an equity condition or a creditor, a court may treat the arrangement as void and refuse to help either side (Contracts Act 1950, section 24). You may say no: nobody can be appointed a director without consenting in writing (section 201). Read the guide: [Asked to hold shares or be a director for someone?](https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia) (markdown: https://www.tkp.com.my/publications/nominee-shareholder-director-malaysia.md) ### Can the firm handle my Employment Pass application? No. The firm advises on the company, its agreements and the law that applies to them. It does not prepare or file pass applications: the company makes those to the Expatriate Services Division or the Immigration Department. An Employment Pass covers work for the company that sponsors it. Work outside the pass conditions makes the pass invalid (Immigration Act 1959/63, section 55B). Read the guide: [A foreign founder's order of steps](https://www.tkp.com.my/publications/foreigner-own-company-malaysia) (markdown: https://www.tkp.com.my/publications/foreigner-own-company-malaysia.md) ### What does a shareholder agreement cost, and who sets the fee? No law fixes the lawyer's fee for a shareholder agreement. Under the Solicitors' Remuneration Order 2023 the fee for this work must be fair and reasonable, judged by factors such as skill, time, complexity and value at stake. A law firm may not publish its own fees (Legal Profession (Publicity) Rules 2025), so this page gives none. Two costs are set by law: stamp duty, usually RM10 on each signed copy (Stamp Act 1949, First Schedule, Items 4 and 34), and 8% service tax if the law firm is registered for it. This firm sets out the scope of the work and its fee in writing before any work starts. Read the guide: [What a shareholder agreement costs, in the full guide](https://www.tkp.com.my/publications/shareholder-agreement-malaysia) (markdown: https://www.tkp.com.my/publications/shareholder-agreement-malaysia.md) ### What should I bring to a first meeting about a shareholder dispute? The constitution, or the old memorandum and articles; any shareholder agreement; board minutes; the bank mandate; any loan or guarantee papers; two years of accounts; and the messages between you and your partner about the dispute. After a death, add the will and any grant or order. Write your proposals down, and do not post about the dispute on social media. Read the guide: [When to get a lawyer in a shareholder dispute](https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia) (markdown: https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia.md) ## Sources The Acts, rules, guidelines and cases this page cites. A link opens the primary text where an official copy is online. - [Companies Act 2016 (Act 777)](https://lom.agc.gov.my/ilims/upload/portal/akta/outputaktap/3372888_BI/Act%20777%20%28Online%202026%29.pdf) - [Contracts Act 1950 (Act 136)](https://lom.agc.gov.my/ilims/upload/portal/akta/LOM/EN/Act%20136.pdf) - [Partnership Act 1961 (Act 135)](https://lom.agc.gov.my/ilims/upload/portal/akta/LOM/EN/Act%20135.pdf) - [Limited Liability Partnerships Act 2012 (Act 743)](https://www.ssm.com.my/acts/Limited%20Liability%20Partnerships%20Act%202012.pdf) - [Stamp Act 1949 (Act 378)](https://lom.agc.gov.my/ilims/upload/portal/akta/outputaktap/3345938_BI/Act%20378%20%28online%202026%29.pdf) - [Income Tax Act 1967 (Act 53)](https://lom.agc.gov.my/ilims/upload/portal/akta/outputaktap/3345910_BI/Act%2053%20%28Online%202026%29.pdf) - [Immigration Act 1959/63 (Act 155)](https://lom.agc.gov.my/ilims/upload/portal/akta/LOM/EN/Act%20155.pdf) - [Solicitors' Remuneration Order 2023 (P.U.(A) 207/2023)](https://www.malaysianbar.org.my/cms/upload_files/document/Solicitors%20Remuneration%20Order%202023.pdf) - [Legal Profession (Publicity) Rules 2025 (P.U.(A) 462/2025), in Bar Council Circular No. 471/2025](https://www.malaysianbar.org.my/cms/upload_files/document/Circular%20No%20471-2025.pdf) - [SSM, Registration of Company (ROC) Table of Fees](https://www.ssm.com.my/Pages/Services/Registration-of-Company-%28ROC%29/Table-of-Fees.aspx) - [SSM, Registration of Business (ROB) Table of Fees](https://www.ssm.com.my/Pages/Services/Registration-of-Business-%28ROB%29/table-of-fees/Table-of-Fees.aspx) - [SSM, Guidelines for the Reporting Framework for Beneficial Ownership of Companies (revised 10 January 2025)](https://www.ssm.com.my/Pages/Legal_Framework/Document/Guideline%20BO%20%28Revised%29%202025%20fair.pdf) - Employees Provident Fund Act 1991 (Act 452) - [Employees' Social Security Act 1969 (Act 4)](https://www.perkeso.gov.my/images/akta/ACT%204/Act%204%20-%20EMPLOYEES%E2%80%99%20SOCIAL%20SECURITY%20ACT%201969%20%28As%20at%201%20September%202022%29.pdf) - Sales Tax Act 2018 (Act 806) and Service Tax Act 2018 (Act 807) - [Service Tax (Rate of Tax) (Amendment) Order 2024 (P.U.(A) 64/2024)](https://mysst.customs.gov.my/wp-content/uploads/2025/03/PERINTAH-CUKAI-PERKHIDMATAN-KADAR-CUKAI-PINDAAN-2024.pdf) - [KPDN, Guidelines on Foreign Participation in Distributive Trade Services in Malaysia 2022](https://www.kpdn.gov.my/images/muat-turun/gp-2022-1.pdf) - [Expatriate Services Division, ESD Online Guidebook V6 2025 (14 April 2025)](https://esd.imi.gov.my/portal/pdf/ESD_Online_Guidebook_V6_2025_%2814042025%29.pdf) - Re Kong Thai Sawmill (Miri) Sdn Bhd (Privy Council, 1978) - [Companies Act 1965 (Act 125), Fourth Schedule, Table A, regulation 53](https://www.ssm.com.my/bm/acts/fscommand/act125sc004.htm) - [SSM, FAQs on the Companies Act 2016 and transitional issues, Part C (incorporation)](https://www.ssm.com.my/Pages/Legal_Framework/FAQS-ON-COMPANIES-ACT-2016-AND-TRANSITIONAL-ISSUES/part_c.pdf) ## Talk to a partner of the firm Starting out, running the business, about to sign a deal, or already in a dispute? Send any constitution, agreement, contract or letters you have by WhatsApp, with a few lines on what you need, or call the office. The firm replies in writing with the scope of the work and its fee, before any work starts. - **Queennie Tai Zee Queen**, Managing Partner: [Read Queennie's profile](https://www.tkp.com.my/partners/queennie) - **Harith Khan**, Partner: [Read Harith's profile](https://www.tkp.com.my/partners/harith) Or contact the office: Call +6017 997 4163 · inquiry@tkp.com.my Web page: https://www.tkp.com.my/corporate-commercial Tai & Khan Partnership · Advocates & Solicitors · No. 36A, Jalan SS 21/58, Damansara Utama, 47400 Petaling Jaya, Selangor This page explains Malaysian company law in general terms. It is not legal advice on your case, and reading it does not make you a client of the firm. Laws, fees and court decisions change, so check the current position before you rely on a figure.