Minority shareholder rights in Malaysia: what can you do?

What rights does a minority shareholder have in a Malaysian Sdn Bhd?

A minority shareholder (小股东, pemegang saham minoriti) in a Malaysian Sdn Bhd holds less than half of the votes. The majority decides most things, and losing a vote is not a wrong in itself. But the Companies Act 2016 still gives a minority shareholder rights. The company must send every shareholder the yearly financial statements (sections 257 and 258). Any shareholder may inspect the register of members and the minutes of shareholders' meetings (sections 55 and 342). A holder of more than 25% of the votes can block a special resolution (section 292). And if the company is run oppressively, in disregard of a shareholder's interests, or in a way that unfairly discriminates against them, the High Court can make an order under section 346. The court chooses the order, which can include a buy-out of the shareholder's shares by the other shareholders or the company.

Is a shareholders' meeting or a written resolution coming up? Act before it happens. Do not sign a resolution you disagree with, because the court can treat your signature as agreement. To stop the meeting, you must apply to the court and be heard before the meeting. The steps are under "What should a minority shareholder do first?" below.

If you want to leave the company instead, see the firm's guide on what happens when a shareholder leaves.

Two terms first. The Act calls a shareholder a "member" (section 2). "Oppression" is the lawyers' name for the remedy in section 346, the court's power to step in when a company is run unfairly against a shareholder; people often describe it as 大欺小. This guide is about private companies (Sdn Bhd).

What can the majority decide without you, and what can your shares block?

The majority shareholder (大股东) of a Malaysian Sdn Bhd controls most decisions, because most shareholder votes need only more than half of the votes cast: an ordinary resolution, which can remove a director (Companies Act 2016, section 206). A minority's main block is the special resolution: it needs at least 75% of the votes, so a holder of more than 25% can stop it (section 292).

• 10% of the paid-up voting shares: you can require the directors to call a shareholders' meeting (section 311).
• More than 25% of the votes: you can block a special resolution, which needs at least 75% of the votes and at least 21 days' notice (section 292). At a meeting, attend or send a proxy (a person you appoint to vote for you) and vote against. Ask for a poll, a count by shares, before the chair declares the result (section 330). A written special resolution cannot pass without your agreement.
• 75% of the votes: the holder passes special resolutions, such as a change to the constitution, the company's own rulebook (section 36). That can include a clause that forces a shareholder to sell, so take advice at once on a notice or written resolution that proposes one.

Each level adds to the ones before it. With 30%, for example, you have every shareholder's rights, the 10% right and the block on special resolutions, but you cannot pass a special resolution yourself. With 25% or less, your vote alone cannot stop a special resolution: with 20% against holders of 80%, they can change the constitution without you, at a meeting or in writing.

The company will not show me the accounts. What am I entitled to see?

If you are told you have "no right" to see anything because you are not a director, that is wrong. Every shareholder of a Malaysian Sdn Bhd is entitled to the yearly financial statements, the register of members and the minutes of shareholders' meetings. What a shareholder who is not a director cannot do is inspect the day-to-day accounting records (查账), such as the invoices, receipts and cheques. Under the Companies Act 2016 that right belongs to the directors and the auditor (sections 245 and 266). Chinese pages on 股东知情权 describe the law of China; a Malaysian 私人有限公司 follows the Companies Act 2016 (2016年公司法令).

The company must send the financial statements to every member within six months of its financial year end, unless SSM has extended the time, and a member who did not receive them can ask for a free copy (sections 257 and 258). Any member may inspect the register of members and the minutes and written resolutions of shareholders' meetings for the past seven years free of charge, and may ask for copies (sections 55 and 342). If you are still a director, you may inspect the accounting records at all times, and the court can order an approved auditor to inspect them for you (section 245).

A shareholder who is refused these documents should ask in writing and keep a copy. If the company still refuses, the court can order it to do what the Act requires (section 351). In Lee Tin Hui v GL Property Management Sdn Bhd (High Court, 2025) the directors gave no information for years and told a shareholder she had "no right" to see the management accounts. The court did not say she had a right to inspect them. It held that directors must keep shareholders informed of material developments, and that this conduct was part of a pattern of oppression (section 346).

No dividend, but the directors pay themselves well. What can I do?

A shareholder of a Malaysian Sdn Bhd cannot force a dividend (分红). The directors decide whether and when to pay one, only out of profits and only if the company will stay solvent for the next 12 months (Companies Act 2016, sections 131 and 132). But when the majority uses the company to pay itself while dividends stop, the court can treat that pattern as oppression under section 346. Directors' pay that the shareholders have regularly voted and approved is a matter for the shareholders (Re Kong Thai Sawmill (Miri) Sdn Bhd, Privy Council, 1978).

In Lee Tin Hui (High Court, 2025) the two directors of a family property company lent themselves RM925,101 without approval and raised their own pay from RM30,000 to RM180,000 a year, while dividends stopped. The court held that the majority had arranged to take the company's profits for themselves and shut the minority out: oppression under section 346, not merely a wrong to the company. Later shareholder resolutions, passed with their own majority votes, did not cure it.

The dividing line is who was harmed. If the harm is to the company, for example its money was taken, the claim belongs to the company and must be brought in its name (section 347), as the Federal Court held in Low Cheng Teik v Low Ean Nee (2024). A fall in dividends or in share value that every shareholder suffers alike is not enough for section 346. It can be oppression where those in control used the company to benefit themselves to your exclusion, so that the loss falls on you and not on them (Low Cheng Teik, paragraphs 115, 127 and 135). Lee Tin Hui is a High Court decision on its own facts.

I was removed as a director but still own shares. Is that oppression?

Removal as a director of a Malaysian Sdn Bhd is usually not oppression by itself. The shareholders can remove a director by ordinary resolution, subject to the constitution (Companies Act 2016, section 206), so being pushed off the board (踢出董事局) is lawful if the vote was proper. The resolution needs 28 days' special notice and a meeting; it cannot be passed in writing (sections 206, 297 and 322). Section 346 protects you as a member, not as a director or an employee. In Soh Jiun Jen v Advance Colour Laboratory Sdn Bhd (2009) the Court of Appeal held that unfair treatment as a director is not by itself oppression. A stopped salary is usually a separate question, though in a quasi-partnership it can be part of the oppression; raise it with a lawyer too.

Removal can still be part of oppression in a quasi-partnership: a company run like a partnership, on personal trust, often with an understanding that each founder will take part in management. A company is not one just because it is small or private (Tien Ik Enterprises Sdn Bhd v Woodsville Sdn Bhd, Supreme Court, 1995). In such a company the court can protect an understanding that goes beyond your strict legal rights (Jet-Tech Materials Sdn Bhd v Yushiro Chemical Industry Co Ltd, Federal Court, 2013). In Tan Lae Peng v Khoo Thean San (High Court, 2024) a husband with 70% falsely said his wife had resigned, moved to remove her and denied her the company's documents; the court found oppression and ordered him to buy her 19%. A board-seat clause in a shareholder agreement protects a founder's seat better than the Act does.

What counts as oppression under section 346 of the Companies Act 2016?

Oppression under section 346 of the Companies Act 2016 is running a Malaysian company, or using the directors' powers, in a way that is unfair to a shareholder beyond the normal disagreements that majority rule brings. In Malay, the remedy is penindasan under seksyen 346 Akta Syarikat 2016. Any member may apply to the High Court on one of two grounds (section 346(1)). Ground (a): the company's affairs are being conducted, or the directors' powers exercised, in a manner oppressive to one or more members or in disregard of their interests as members. Ground (b): an act of the company has been done or is threatened, or a members' resolution has been passed or is proposed, which unfairly discriminates against or is otherwise prejudicial to one or more members. Under ground (b) you can apply when a resolution is only proposed.

The test comes from Re Kong Thai Sawmill (Miri) Sdn Bhd (Privy Council, 1978). The section applies only when majority rule becomes rule that oppresses the minority or disregards its interests: there must be "a visible departure from the standards of fair dealing". For disregard, those in control must have known of your interest and decided to override it. The court looks at events as a connected story and asks whether the conduct crossed the line.

The Federal Court in Owen Sim Liang Khui v Piasau Jaya Sdn Bhd (1995) said the section looks to the effect of the conduct, so you do not always have to prove that the others meant to harm you. You must show that you were singled out, alone or with others in the same position: a loss that is yours as a member, separate from the company's loss (Low Cheng Teik, Federal Court, 2024). As a general rule you must also be on the register of members on the day you file, so a person who has sold or transferred their shares usually cannot apply (Owen Sim, 1995).

When is it not oppression under section 346?

Under section 346 of the Companies Act 2016, Malaysian courts have held that these are usually not oppression on their own:

• Being outvoted. A share issue or merger approved by the majority at a general meeting is not oppression just because you objected and were diluted (Dato' Azizan bin Abd Rahman v Concrete Parade Sdn Bhd, Federal Court, 2024).
• A rights issue (new shares offered to all shareholders in proportion) with notice and a basis in the constitution, even if a shareholder who does not pay is diluted (ISM Sendirian Berhad v Queensway Nominees (Asing) Sdn Bhd, Federal Court, 2026). By contrast, a share issue pushed through to dilute a shareholder can be oppression (Chiptar Holdings Sdn Bhd v THC Rice (KL) Sdn Bhd, High Court, 2023).
• A decision you agreed to or took part in. In Jet-Tech (2013) the petitioners, who then held 73.5%, had signed the written resolution that issued new shares to the other side and made it the majority; the Federal Court held that this was not oppression.
• A breach of a shareholder agreement, by that label alone. A dispute under the agreement is usually a contract claim between the parties (Jet-Tech, 2013; ISM, 2026). But the Federal Court in ISM added that there is no blanket rule: the test is whether the complaint concerns the company's affairs.
• A wrong done to the company alone, which hurts all shareholders alike. The remedy is a claim in the company's name, not a personal buy-out (Low Cheng Teik, 2024).

What can the court order under section 346, and what will it not do?

If the court finds oppression, section 346(2) of the Companies Act 2016 lets it make any order it thinks fit to end or remedy the matters complained of. The Act lists five examples: an order to do or not to do an act; cancelling or varying a transaction or resolution; regulating how the company is run in future; a purchase of shares by other members or by the company, with a capital reduction; and winding up. The Federal Court confirmed in Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd (2021) that the list is open-ended, and that in an appropriate case the order can include compensation (Koh Jui Hiong v Ki Tak Sang, Federal Court, 2013).

A buy-out is usually the order a minority asks for. In Tan Lae Peng (High Court, 2024) the court ordered the 70% holder to buy the minority's 19% at a value fixed by an independent valuer. In Sim Chu Hu v Kerk Han Meng (High Court, order of November 2022) the court ordered a buy-out at fair value without a minority discount, a price cut for lack of control. The price stays in the court's discretion, and the court may value the shares as at a date before the unfair conduct began, so that the conduct does not lower the price (Chiptar, High Court, 2023).

The court can refuse a buy-out that would only let the minority escape a bad investment: in Auspicious Journey the Federal Court upheld a winding-up order under the oppression section instead, and said that such an order is not the remedy of the very last resort.

Section 346, a derivative action or winding up: which route fits a minority shareholder?

For a minority shareholder of a Malaysian Sdn Bhd, the route depends on who was harmed. Harm to you as a shareholder points to an oppression application under section 346 of the Companies Act 2016. Harm to the company alone points to a derivative action, a claim in the company's name (sections 347 and 348). Where trust has gone and the company should end, the route is winding up (section 465). The routes can overlap, and the court decides.

A derivative action is a case brought in the company's name, with the court's leave (permission), for a wrong done to the company. The applicant must first give the directors 30 days' written notice (section 348). Money recovered goes to the company, which can be ordered to pay the applicant's reasonable legal fees (section 350). The firm's 50/50 guide explains a claim in the company's name (section 347).

Winding up closes the company: a liquidator sells its assets, pays its debts and shares out the rest. A shareholder can petition the court to wind the company up under section 465: on the ground that it is just and equitable (section 465(1)(h)), or that the directors acted in their own interests rather than the members' as a whole (section 465(1)(f)). Loss of mutual trust in a family company has been enough (Tien Ik, Supreme Court, 1995). A petition is a drastic step, and the court decides. Once it is presented, any disposal of the company's property or transfer of its shares is void unless the court orders otherwise (section 472).

How does a section 346 case start, how long does it take, and who pays?

A section 346 case is usually started in the High Court by originating summons (Rules of Court 2012, Order 88 rule 2). The rule still names the Companies Act 1965, but the Federal Court has applied it to proceedings under the 2016 Act (Mansion Properties Sdn Bhd v Sham Chin Yen, 2020). It is decided mainly on affidavits, sworn written statements. If the facts are seriously disputed, the court can order the case to continue as if begun by writ, with pleadings, witnesses and a trial (Order 28 rule 8).

If a share issue, a sale or a resolution is about to happen, you can ask the court for an interim injunction, a temporary order that stops the step until the case is decided (Order 29 rule 1). The court will not stop a company meeting on an application made without notice to the other side (Order 29 rule 1(2C)), so the application must be filed, served and heard before the meeting. The applicant is usually asked to undertake to pay the other side's losses if the injunction later proves wrong.

The full case takes much longer, and costs follow the result, at the court's discretion (Order 59 rule 3). In Low Cheng Teik, filed on 14 October 2019, the applicant, a 50% shareholder, lost in the High Court, won a buy-out order in the Court of Appeal, then lost in the Federal Court on 28 August 2024 and was ordered to pay RM80,000 in costs for that appeal alone. The court can refer the case to mediation at any stage if the parties agree or ask. Mediation by a judge is free, and what is said there is confidential (Chief Justice's Practice Direction No 2 of 2022).

What should a minority shareholder do first?

A minority shareholder of a Malaysian Sdn Bhd with a meeting or a written resolution coming should act on that first, then use the rights the Companies Act 2016 gives. In practice:

1. Read every notice of meeting and written resolution you receive. Do not sign a written resolution, minutes, a share transfer form, a resignation letter or a settlement you do not agree with: courts have treated a shareholder's own signature as agreement (Jet-Tech, 2013; Low Cheng Teik, 2024). Object in writing.
2. Attend the meeting, or send a proxy, even if you were removed as a director: every member is entitled to notice and may appoint a proxy (sections 321 and 334). Vote against, ask for a poll before the result is declared (section 330), and ask that your objection be minuted.
3. If a share issue, a sale or a resolution to remove you is proposed, see a lawyer at once: an injunction to stop a meeting must be applied for, served and heard before the meeting (Order 29 rule 1).
4. If you are still a director, inspect the accounting records now (section 245).
5. Write to the company, addressed to its directors, for the financial statements (section 257), the register of members (section 55) and the minutes of shareholders' meetings (section 342). Name the documents, the section and a date to reply; a short, polite letter is enough.
6. Buy the SSM records (the Company Profile, the Particulars of Shareholder report and the financial statements if lodged), and check that you are on the register of members. Inherited shares still in the estate's name: get registered first.
7. Keep a dated record and copies of the documents you hold lawfully, and complain in writing early. Do not remove or copy company records you are not entitled to: a director or officer must not, without the shareholders' consent, use the company's property or information to benefit himself or anyone else, or to harm the company (section 218). In practice, do not post about the dispute online.
8. Ask the company secretary in writing for the constitution, and read it and any shareholder agreement for a dispute clause, an exit or buy-sell clause, pre-emption rights (a right to be offered new shares first) and transfer restrictions.
9. Do not sell or transfer your shares before you take advice if you may bring a case: once off the register you usually lose the section 346 route, unless the other side wrongly took you off it.

A court case is not the only step: a filed case can be sent to free, confidential mediation by a judge (Practice Direction No 2 of 2022). A shareholder agreement signed early can give a minority what the Act does not: a board seat, reserved matters, information rights and an agreed exit price.

Key facts: section 346 and minority rights

• Who may apply: any member (shareholder) or debenture holder; the Act sets no minimum shareholding (Companies Act 2016, section 346(1)).
• Grounds: the company's affairs run, or the directors' powers used, oppressively or in disregard of a member's interests; or an act or resolution, done or threatened, that unfairly discriminates against or is otherwise prejudicial to a member (Companies Act 2016, section 346(1)).
• Orders include: direct or prohibit an act; cancel or vary a transaction or resolution; regulate future conduct; a purchase of shares by other members or by the company, with a capital reduction; winding up (Companies Act 2016, section 346(2)).
• Standing: as a general rule the applicant must be on the register of members when the case is filed; one exception is a shareholder the company wrongly took off it (Companies Act 2016, section 346(1); Owen Sim, Federal Court, 1995).
• Time limit: section 346 sets no deadline, but long delay after you knew of the oppression can bar relief (Companies Act 2016, section 346; Re Senson Auto Supplies Sdn Bhd, High Court, 1987).
• Special resolution: at least 75% of the votes, so a holder of more than 25% can block one; at a meeting, vote against and ask for a poll before the result is declared; a written special resolution cannot pass without your agreement (Companies Act 2016, sections 292 and 330).
• Calling a meeting: holders of 10% of the paid-up voting shares can require the directors to call one (Companies Act 2016, section 311).
• Removing a director of a private company: an ordinary resolution, more than half of the votes, subject to the constitution, after 28 days' special notice and at a meeting (Companies Act 2016, sections 206, 297 and 322).
• Financial statements: sent to every member within six months of the financial year end (Companies Act 2016, sections 257 and 258).
• Accounting records: the directors and the auditor may inspect them; a shareholder who is not a director has no such right under the Act (Companies Act 2016, sections 245 and 266).

When to get a lawyer

See a lawyer as soon as a notice proposes a share issue, an asset sale or your removal, or you are asked to sign a written resolution: an interim injunction must be sought before the step is taken, and an order to stop a meeting must be heard with notice to the other side. See one too when the company refuses your written requests, when money is leaving the company, before you sell your shares, and when a letter arrives from the other side's lawyer. The free Lawyer's Letter Check on this website helps you tell a letter from a court paper. The article how to find a lawyer in Malaysia explains how to choose one.

This article is general information about Malaysian law as at 18 October 2026. It is not legal advice on your situation, and reading it does not make you a client of the firm. Court decisions change the position, and some of the High Court decisions named here may be appealed, so check the current law before you rely on one.