# Is it legal to be a nominee shareholder or director in 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.

By [Harith Khan](https://www.tkp.com.my/partners/harith) · Published 18 October 2026 · Last reviewed 18 October 2026

## Nominee shareholders and directors in Malaysia: the short answer

Being a nominee shareholder or director is not an offence by itself in Malaysia. But it carries real duties and real risk. The Companies Act 2016 assumes nominees exist: it defines the beneficial owner of shares as the ultimate owner and says this "does not include a nominee of any description" (section 2). Four rules follow. The company deals with the name on its register (section 101). A nominee director carries every duty of a director (sections 213 and 217). A real owner with 20% or more, or control, must be declared to the company, and hiding them is an offence (sections 60C and 60D). And where the purpose was to get round a law or to hide assets from creditors, the arrangement is void, and a court may refuse to help either side (Contracts Act 1950, section 24).

People call this lending a name (pinjam nama), or being a director "on paper" or a "sleeping director". The law has no lesser kind of director (Dato' Seri Timor Shah Rafiq v Nautilus Tug & Towage, High Court, 2017). This article calls the person behind the nominee the real owner; the law calls that person the beneficial owner (pemilik benefisial).

Sections by situation: "Asked to hold shares or be a director for someone?"; "A foreign investor asked me to be the resident director"; "I put my shares in someone else's name"; "I am a director on paper and want out"; or "My name was used as a director or shareholder without my consent".

## What is a nominee shareholder, and who really owns the shares?

A nominee shareholder (挂名股东) of a Malaysian Sdn Bhd is the person named in the company's register of members, its list of shareholders, who holds the shares for someone else. The register is prima facie evidence that the named person owns the shares in law: it stands unless someone proves otherwise (Companies Act 2016, section 101). The company may treat the registered holder as the only person entitled to vote, to receive notices and to receive dividends. As a rule no trust is noted on the register, and the company still deals with the registered name even if it is told of one (section 110).

![One Sdn Bhd share, two owners. The nominee is on the register, votes, receives the dividends the company pays and signs any transfer, but holds the shares for the real owner. The real owner has rights against the nominee, not the company, and must be declared if they hold 20% or more, or control it.](https://www.tkp.com.my/media/articles/v1/354771e37ca74999-1440.png)

Figure 1. One share, two owners: the company deals with the name on its register, and the real owner's claim rests on proof of a trust; an unlawful purpose may defeat it (Companies Act 2016, sections 101 and 110; Contracts Act 1950, section 24).

So a share held for someone else has two owners. The nominee is the legal owner. The real owner has rights against the nominee, not the company, and those rights rest on a trust. The trust may be written (an express trust). It may be presumed from who paid (a resulting trust). Or the law may impose it where it would be unconscionable for the holder to keep the shares (a constructive trust) (Takako Sakao v Ng Pek Yuen, Federal Court, 2009; Ng Hoo Kui v Wendy Tan Lee Peng, Federal Court, 2020). A signed declaration of trust (a trust deed) is strong evidence, but a court may still refuse to help with a trust meant to defeat a law or creditors (Contracts Act 1950, section 24). See also the [hub guide to shareholder agreements](https://www.tkp.com.my/publications/shareholder-agreement-malaysia).

## What is a nominee director in Malaysia, and what are their duties?

A nominee director (挂名董事) of a Malaysian Sdn Bhd is a director appointed to act for, or on the wishes of, someone else. The law treats that person as a director in full. The Companies Act 2016 gives every director the same two duties (section 213): to use their powers for a proper purpose and in good faith, in the best interest of the company, and to use reasonable care, skill and diligence. A nominee director must not put the person who appointed them above the company (section 217). Breaking either duty, for example by putting the person who appointed you ahead of the company, is an offence: up to 5 years' prison, a fine of up to RM3,000,000, or both.

![A director on paper is a director. Saying it is only my name, I just do what the owner says, I only sign what I am given, or I have no shares and no salary does not reduce the duties of good faith and care, or liability for EPF, SOCSO, sales tax and service tax unpaid while you are a director.](https://www.tkp.com.my/media/articles/v1/6a3f32cc2f155983-1440.png)

Figure 2. The law has no lesser kind of director: a director on paper owes every duty of a director (Companies Act 2016, sections 213, 215 and 217), and the laws on EPF, SOCSO and sales and service tax do not ask who ran the company.

The standard of care is at least what is reasonably expected of someone with the same responsibilities, plus any extra skill the director has (section 213). Relying on officers or professionals counts as reasonable if done in good faith after an independent assessment (section 215); signing whatever you are given, without checking, is not an independent assessment.

## Is a nominee director personally liable for the company's debts in Malaysia?

A director of a Malaysian Sdn Bhd is not liable for the company's debts just by being a director: the company is a separate legal person (Companies Act 2016, section 20). A director pays personally only when a law says directors must pay, when the director signed a guarantee, or for the director's own wrong. Several statutes name directors, and none asks who ran the company.

### Which laws make a nominee director pay?

- EPF: the directors, including anyone who was a director while the contributions were payable, are liable jointly and severally with the company, which means EPF can recover the whole sum from any one of them (Employees Provident Fund Act 1991, section 46).
- SOCSO: the same rule (Employees' Social Security Act 1969, section 108A).
- Sales tax and service tax: the directors are liable jointly and severally with the company (Sales Tax Act 2018, section 34; Service Tax Act 2018, section 33).
- Income tax and monthly tax deductions (PCB) not paid to LHDN: only a director who owns or controls, alone or with associates, at least 20% of the ordinary shares (Income Tax Act 1967, section 75A). A director on paper who also holds 20% on paper may be caught, though neither the Act nor LHDN's Public Ruling 2/2019 says whether a registered nominee counts as the owner.
- Fraudulent trading: anyone knowingly a party to business carried on to defraud creditors can be made personally liable, without limit, for the company's debts, and commits an offence (Companies Act 2016, section 540). The Federal Court requires actual knowledge and some part in the conduct (Lai Fee, 2023).
- A personal guarantee: the guarantor owes what the company owes unless the guarantee says otherwise (Contracts Act 1950, section 81). Resigning does not end it; notice to the bank ends a continuing guarantee only for future dealings (section 83).

The EPF, SOCSO and income tax rules expressly reach a person who was a director during the period the money was payable, so resigning later does not erase them. Travel can be stopped too: by LHDN for a director who meets the 20% test (Income Tax Act 1967, section 104), and by EPF over unpaid contributions, whatever the director's shares (Employees Provident Fund Act 1991, section 39).

## When is holding shares or a directorship for someone unlawful?

Holding shares or a directorship for someone in Malaysia becomes unlawful because of its purpose. Under the Contracts Act 1950, an agreement is void if its object is forbidden by law, would defeat a law if allowed, is fraudulent, or is against public policy (section 24). If the court refuses to help, the loss lies where it falls, so the shares usually stay with whoever is on the register (Wan Zaizul, High Court, 2022). Whether it still orders money or property returned depends on how serious the illegality was and on proportionality (section 66; Detik Ria v Prudential Corporation Holdings, Federal Court, 2025).

In Low Yee Meng v Lau Kok Loon (Court of Appeal, 7 October 2026; a further appeal may follow) an uncle claimed shares registered in his nephew's name, and failed. In 1990 he had signed a trust deed saying he held his one share for the nephew. In 1995, shortly before he was made bankrupt, he transferred it to the nephew; later allotments grew it to about 48%. He waited about 25 years. The court held that his own deed and the long wait showed a gift. As an alternative ground, it said that even with a trust it would refuse help, because the share had been moved to keep it from creditors in his bankruptcy. In Wan Zaizul Adli v NTP World Corporation (High Court, 2022) a nominee who claimed the shares as his own lost: the court held the deal illegal, as an unlawful lobbying agreement and a device to make the company appear 100% Bumiputera-owned, and refused to help him; he had also signed the transfers himself.

### Ali Baba fronts and Bumiputera status

An "Ali Baba" arrangement is a licence, permit, contract or status held by a person or company that qualifies, used by another who does not (syarikat Ali Baba; 人头公司). The Court of Appeal has held such arrangements contrary to public policy and void (Pembinaan Jaya Zira v Sungai Lui Construction, 8 December 2025). The Economy Ministry plans to table a law or amendments in 2027 to make the practice an offence; it is not yet law. What is an offence today is a false statement made to keep a front going, for example to SSM (Companies Act 2016, section 593).

A common request is from an employer who asks a Bumiputera employee to be a director and 51% shareholder, so that the company can get Bumiputera status for government contracts. Treasury circular PK 1.5 needs at least 51% of the shares, the board, the key posts, the financial management, the staff and the control to be Bumiputera. Faking Bumiputera equity, or letting another person use the registration, is a disciplinary offence under Treasury circular PK 8. Sanctions range from a warning letter to suspension or cancellation of the registration and blacklisting of the company's directors and capital owners, each for up to 5 years. CIDB may suspend or cancel a contractor's registration obtained by a false declaration.

## Must the real (beneficial) owner be reported to the company and SSM?

The company must ask, and record the answer. Since 1 April 2024 every Malaysian company must keep a register of its beneficial owners and lodge any change with SSM within 14 days of recording it (Companies Act 2016, sections 60A to 60E). SSM's guidelines set the test at 20% or more of the shares or voting shares, directly or indirectly, including through nominees.

The company must ask each shareholder in writing whether they are a beneficial owner and, if not, to name who is (section 60C). A nominee who receives that notice must, as far as possible, name any beneficial owner they hold for; ignoring it is an offence, and a knowingly or recklessly false reply is a separate offence. A real owner who is a beneficial owner must tell the company so, and must report changes (section 60D). So a nominee may not lawfully keep a real owner with 20% or more, or control, off the company's records. The register is not open to the public, but SSM holds the information, and authorities acting under other laws can be given access to it.

## Asked to hold shares or be a director for someone? The risks, and what you can do

The main risks for the person asked are an arrangement a court treats as void, personal liability for some company debts, and a resignation that does not take effect. These questions show where the risk sits; they are not a checklist for setting up a front.

- Why can the real owner not be on the register themselves? If the answer is a licence, a Bumiputera or foreign-ownership condition, a creditor or a bankruptcy, the arrangement is the kind a court treats as void.
- Will I sign a bank guarantee, cheques, a tender form or a statutory declaration (a sworn written statement)? A guarantee outlives my resignation.
- Who pays and files EPF, SOCSO, sales tax, service tax and income tax, and who checks?
- If I resign, is there another director who ordinarily resides in Malaysia (section 196)?

What you can do now:

- You may say no. No one can be appointed a director without consenting in writing (Companies Act 2016, section 201).
- Do not sign a consent to act as director, a statutory declaration or a registration form that you know to be untrue.
- See a lawyer before you sign anything.
- If you have already signed, you are a director: see "I am a director on paper and want out".

## A foreign investor asked me to be the resident director. What should I know first?

A Malaysian Sdn Bhd needs at least one director, and that director must ordinarily reside in Malaysia by having a principal place of residence here (Companies Act 2016, section 196). The rule is about residence, not citizenship.

The resident director is a director in full. If you are the only resident director, your resignation is ineffective until a replacement resident director is appointed (section 196). Holding 20% or more on paper may also bring income tax liability (Income Tax Act 1967, section 75A).

## I put my shares in someone else's name. Are they still mine?

Shares you put in someone else's name are still yours if you can prove that the nominee holds them on trust for you; the register says the nominee owns them (Companies Act 2016, section 101), so the burden is on you. If the reason was unlawful, for example to keep the shares from creditors, a court may refuse to help you, but not automatically. It looks at what the parties intended, how serious the wrong was, whether the unlawful purpose was carried out, and whether refusing help would be out of proportion to the wrong (Detik Ria, Federal Court, 2025). Tell your lawyer the full reason the shares were put in the other name.

Courts weigh a signed trust deed or nominee agreement, who paid for the shares as shown by bank records, how long you waited before asking for them back, blank transfer forms signed at the time, and what the parties said and did afterwards.

### How do you get the shares back from a nominee?

The nominee signs a stamped share transfer form, and the company must register it within 30 days unless the directors lawfully refuse (sections 105 and 106). A transfer for no money is normally charged like a sale, at RM3 for every RM1,000 of the value (Stamp Act 1949, section 16 and First Schedule, Item 32(b)). A transfer back from a trustee to the beneficiary, under which no beneficial interest (real ownership) passes, is taken out of that charge (section 16). The duty may then be RM10 (Item 32(i)) if LHDN accepts the trust. No published LHDN guideline covers this, so take advice before you rely on it.

If the nominee refuses to sign, you can sue for a declaration of trust, a transfer order and correction (rectification) of the register of members (section 103). The law sets no fixed deadline for suing a nominee for shares the nominee still holds for you (Limitation Act 1953, section 22), but most other trust claims have six years. And the longer you wait, the more likely a court is to decide that you meant the shares as a gift, so do not wait.

### What to do now if your shares are in someone else's name

- Check the company's current register of members: the shares may already have moved.
- Gather any trust deed or nominee agreement, the bank records that show you paid, and any letter or message in which the nominee said whose shares they are.
- Keep a record of the dividends paid on the shares.
- See a lawyer before you write to the nominee, sue, or sign anything the nominee sends you: a letter can prompt a sale, and what you write becomes evidence. A court may order the nominee not to deal with the shares while the claim runs, by a temporary injunction (Specific Relief Act 1950, sections 50 and 51).
- Then write to the nominee and ask for a signed transfer; keep a copy.
- If you hold 20% or more through the nominee, ask a lawyer how to tell the company you are its beneficial owner (section 60D).

## I am a director on paper and want out. How do I resign?

A director of a Malaysian Sdn Bhd resigns by written notice delivered to the company at its registered office. It takes effect when it is delivered, or on a later date the notice states (Companies Act 2016, section 208). But two traps can keep a director on paper in office after the letter is sent.

![A director on paper resigns by a dated letter delivered to the registered office, and the company notifies SSM within 14 days. It is ineffective if no resident director would remain, and a sole director must first call a meeting of shareholders. Shares, a guarantee and EPF and SOCSO liability stay.](https://www.tkp.com.my/media/articles/v1/ef9cfe6df7be69e3-1440.png)

Figure 3. A resignation letter ends the directorship, subject to two traps; it does not move your shares, end a personal guarantee or erase EPF and SOCSO liability (Companies Act 2016, sections 58, 105, 196, 208 and 209; Contracts Act 1950, section 83).

1. Write a dated resignation letter and deliver it to the registered office, with proof of delivery.
2. The company, not you, must notify SSM within 14 days (section 58).
3. Trap one: a resignation that would leave the company with no director who ordinarily resides in Malaysia is ineffective until someone is appointed in your place (section 196).
4. Trap two: a sole director must first call a meeting of shareholders to appoint a new director (section 209). Calling it is not enough if no resident director remains.
5. Shares in your name are separate: they leave your name only by a signed and stamped transfer (section 105).
6. A personal guarantee survives: ask the bank in writing to release you, and give written notice revoking a continuing guarantee for future borrowing (Contracts Act 1950, section 83); debts already incurred stay. See why [resigning as a director does not free you of a bank guarantee](https://www.tkp.com.my/publications/50-50-shareholder-deadlock-malaysia).

If the company does nothing, ask a lawyer about applying to court. Until SSM's record changes, agencies may still write to you, so keep your proof of delivery.

## My name was used as a director or shareholder without my consent. What can I do?

A person cannot lawfully be appointed a director of a Malaysian company without consenting in writing and declaring that they are not disqualified (Companies Act 2016, section 201). The company's notice of the appointment to SSM must carry that consent (section 58). If you did sign the consent, even without reading it, you are a director: the resignation steps above apply.

1. Get the record: buy SSM's Personal Involvement in Companies searches (director and shareholder) on your MyKad or passport number; then, through SSM's portals (SSM e-Info, MyData-SSM, SSM Search or SSM SAFEDATA), the company profile, the particulars of directors and officers, and the documents lodged for your appointment.
2. Apply to SSM to correct (rectify) its register (section 602; Practice Note 6/2019). SSM may correct a false or misleading entry, but may refuse where the error did not arise in its own work or the document is over seven years old; you may appeal to court, and if the facts are disputed, expect to need a court order.
3. Make a police report if your signature was forged. Forgery, and using a forged document, are offences (Penal Code, sections 463 to 465, 468 and 471).
4. Report the breach to SSM through e-Aduan, its complaint channel, which handles breaches of the Act but not private disputes. Knowingly lodging a consent you never gave is an offence (Companies Act 2016, sections 591 and 593).

If shares were put in your name without your consent, the same offences apply. A person whose name is wrongly entered in the register of members may apply to the court to correct (rectify) it (section 103).

## Key facts: nominees, beneficial owners and resignation

- Being a nominee is not an offence by itself, but a court may refuse to help with an arrangement meant to get round a law or creditors (Contracts Act 1950, section 24; Detik Ria, Federal Court, 2025).
- The register of members is prima facie evidence of legal title, and no trust is noted on it (Companies Act 2016, sections 101 and 110).
- A nominee director has every duty of a director and must not put the person who appointed them first; breach is an offence (sections 213 and 217).
- Every company must keep a register of beneficial owners and lodge changes with SSM within 14 days, and a real owner with 20% or more, or control, must be declared (sections 60A to 60E, in force 1 April 2024).
- A resignation takes effect on delivery (section 208); it is ineffective if it leaves no resident director (section 196); a sole director must first call a meeting (section 209).

## When to get a lawyer

See a lawyer before you agree to be a director or shareholder for someone else, and before you sign a consent to act, a trust deed, a guarantee or a resignation. See one too when a nominee refuses to transfer the shares, when a letter arrives from EPF, LHDN, a creditor or a lawyer, or when your name has been used without your consent. For a demand letter, see the firm's [Lawyer's Letter Check](https://www.tkp.com.my/lawyers-letter-check) and [what to do in the first 7 days after a letter of demand](https://www.tkp.com.my/publications/i-received-a-letter-of-demand-in-malaysia-what-do-i-do-in-the-first-7-days). See also [how to find a lawyer in Malaysia](https://www.tkp.com.my/publications/how-to-find-a-lawyer-in-malaysia-a-practical-checklist).

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. Penalties, deadlines and court decisions change, so check the current law before you rely on one.

## Frequently asked questions

### Can I be a director of a Sdn Bhd without owning any shares?

The Companies Act 2016 does not require a director to own shares, though a company's constitution may. A director must be a natural person of at least 18 who has consented in writing and is not disqualified (sections 196, 198 and 201). Holding no shares does not reduce the duties or the statutory liabilities, with one exception: liability for the company's unpaid income tax under section 75A of the Income Tax Act 1967 reaches only a director with at least 20% of the shares.

### How do I check if a company is registered under my name in Malaysia?

Start with SSM's company information products, sold through its information portals: SSM e-Info, MyData-SSM, SSM Search and SSM SAFEDATA. A company profile lists the directors and shareholders of a company, and the particulars of directors and officers show its current directors and those of the last 15 years. To find every company that records you, buy SSM's Personal Involvement in Companies searches, which run on your MyKad or passport number; SSM sells a separate search for each role: director, shareholder and company secretary. Keep a copy of what you receive.

### Who is the beneficial owner when a nominee holds the shares?

The beneficial owner is the person behind the nominee, never the nominee; for the company's register it must be a natural person. The Companies Act 2016 defines the beneficial owner of shares as the ultimate owner and excludes a nominee of any description (section 2), and defines a company's beneficial owner as the natural person who ultimately owns or controls it (section 60A). SSM's guidelines count a holding of 20% or more, including through nominees. If the real owner is itself a company, the company looks through it to the natural person behind it.

### What happens if a company does not report its beneficial owners to SSM?

The company and its officers commit an offence. Failing to keep the register of beneficial owners, or to lodge changes with SSM within 14 days, carries a fine of up to RM20,000 and up to RM500 a day for a continuing offence (Companies Act 2016, section 60B). A shareholder who ignores the company's notice or gives a false reply, and a real owner who fails to notify the company, also commit offences (sections 60C and 60D), carrying, for an individual, up to RM50,000, 3 years' prison, or both (section 588).

### Does a Malaysian company need a director who is a Malaysian citizen?

A Malaysian company needs a director who ordinarily resides in Malaysia, not a citizen. The Companies Act 2016 requires at least one director of a private company to have a principal place of residence in Malaysia (section 196); it sets no citizenship or nationality test. A foreigner who lives in Malaysia can meet the rule, and an alternate or substitute director does not count. Whoever fills that seat is a director in full, with the same duties and liabilities as any other.

### Can a foreigner own all the shares in a Sdn Bhd?

In general, yes: the Companies Act 2016 sets no equity condition on a Malaysian company, as the Malaysian Investment Development Authority notes. Limits come from the sector: a licence, permit or approval may carry equity conditions, for example a Bumiputera equity condition for certain property acquisitions and a Bumiputera or Malay equity target for hypermarkets (or contributions instead). Buying 5% or more of a licensed financial institution needs approval. Putting shares in a Malaysian's name so that the company appears to meet such a condition is the kind of arrangement a court treats as void (Contracts Act 1950, section 24).

### The nominee refuses to sign the share transfer back to me. What can I do?

You can sue the nominee, because the company will not act on your word: it deals with the registered holder and is not affected by notice of a trust (Companies Act 2016, sections 101 and 110). The claim asks the court to declare that the nominee holds the shares on trust for you, to order a transfer, and to correct (rectify) the register of members (section 103). You must prove the trust, and a court may refuse help if the purpose was unlawful (Contracts Act 1950, section 24).

### Do I need to stamp a declaration of trust or nominee agreement for shares?

A written declaration of trust over shares carries a fixed stamp duty of RM10 (Stamp Act 1949, First Schedule, Item 37). LHDN's guideline treats a document titled a nominee agreement as a power of attorney, also RM10 (Item 59(b)). Present it for stamping within 30 days of signing; an unstamped document cannot be used in evidence until the duty and any late penalty are paid (sections 47, 47A and 52). A document that sells the beneficial interest is charged like a sale (section 21). Stamping a document does not make a void arrangement lawful (Contracts Act 1950, section 24).

### Must a nominee director follow the instructions of the person who appointed them?

Not where the instruction conflicts with the company's interest. Every director must act in good faith in the best interest of the company (Companies Act 2016, section 213). Section 217 says expressly that a director appointed by a member, an employer or a debenture holder (a lender who holds the company's bonds, notes or other debt securities) must not put that person first. Breach carries up to 5 years' prison, a fine of up to RM3,000,000, or both. Reliance on others' information or advice counts as reasonable if made in good faith after an independent assessment of it (section 215).

### Is the real owner who gives the orders treated as a director too?

It can be, if the board is used to acting on that person's orders. The Companies Act 2016 defines a director to include a person on whose directions or instructions the majority of the directors are accustomed to act (section 2), a person commonly called a shadow director. A person is not caught only because the directors act on advice given in a professional capacity. Since 1 April 2024 such a controller is also a beneficial owner under SSM's criteria of ultimate effective control and the power to appoint or remove most of the board (section 60A).

### Can LHDN stop a nominee director from leaving Malaysia over the company's unpaid tax?

For income tax, only if you meet the shareholding test. A director is personally liable for the company's unpaid income tax and PCB when they own or control at least 20% of the ordinary shares (Income Tax Act 1967, section 75A). LHDN may then ask Immigration to stop them leaving (section 104). But EPF can ask for the same stop over unpaid contributions, which every director owes whatever their shares (Employees Provident Fund Act 1991, sections 39 and 46), and Customs has the same power for sales and service tax (Sales Tax Act and Service Tax Act 2018, section 31).

### Am I liable for unpaid EPF contributions as a director with no shares and no salary?

Yes, for the period you were a director. The Employees Provident Fund Act 1991 makes the directors, including anyone who was a director while the contributions were payable, jointly and severally liable with the company (section 46). It does not ask whether you held shares, drew a salary or ran the company. The Federal Court has held that EPF may recover the whole sum from one director alone (Edwin Cassian Nagappan, 2021), and in 2025 refused leave to challenge a Court of Appeal ruling that it need not sue the company (Mohd Abdul Karim Abdullah).

### My relative is bankrupt and wants me to hold his shares and be the director. Is that allowed?

Not safely. An undischarged bankrupt may not be a director or take part in managing a company, directly or indirectly, without leave of the Official Receiver or the court (Companies Act 2016, section 198). A relative who runs the company through you may be doing that. His property vests in the Director General of Insolvency, so the shares are not his to give (Insolvency Act 1967, sections 8 and 48). Dishonestly hiding or moving property from creditors is an offence, also for whoever hides it: up to 5 years' prison, a fine, or both (Penal Code, section 421).

### Can the real owner remove me as director if I refuse to follow instructions?

Yes, if the real owner controls the votes through the nominee shareholder. The shareholders of a Sdn Bhd can remove a director by ordinary resolution at a meeting, subject to the constitution, after special notice of 28 days, and not by written resolution (Companies Act 2016, sections 206, 297 and 322). But only the shareholders named in the register vote: while shares are in a nominee's name, the nominee casts their votes (section 101). Removal ends the office; it does not undo your liability for the period you served, and it does not move the shares.

### The nominee holding my shares has died. Can I still get the shares back?

Possibly, but the claim is now against the nominee's estate, and you must still prove the trust. The company recognises the deceased sole holder's executor or administrator, and must register them within 60 days of their notice (Companies Act 2016, section 109); the leaves-or-dies article explains [what happens to shares when a shareholder dies](https://www.tkp.com.my/publications/shareholder-leaves-or-dies-malaysia). On ordinary trust principles the executor takes the shares subject to the trust, so give them written notice of your claim early, with your evidence. Do not wait: delay weakens the claim, and the time rules against an estate are less settled.

### I was asked to sign an undated resignation letter and a blank share transfer. What do they mean?

A High Court held that a pre-signed, undated resignation letter, signed as a condition of appointment, was void (Khoo Choon Yam v Gan Miew Chee, 2000); a director leaves by a dated notice (Companies Act 2016, section 208). A blank transfer form shows what the parties intended, but in Low Yee Meng (Court of Appeal, 2026; a further appeal may follow) it did not by itself prove a trust. Stamp it within 30 days of signing to avoid a late penalty; a company registers only a stamped transfer (Stamp Act 1949, sections 47 and 47A; Companies Act, section 105).

### Is an "Ali Baba" arrangement a crime in Malaysia?

There is no general offence today, though some licence rules, such as council by-laws, forbid passing a licence on. On 14 October 2026 the Economy Minister told the Dewan Rakyat that the practice is not defined as a criminal offence and that a law may be tabled in 2027. The civil courts already treat such arrangements as void (Pembinaan Jaya Zira, Court of Appeal, 8 December 2025). A false statement made to keep a front going can be a crime now: a false statutory declaration (Penal Code, section 199) or a false statement to SSM (Companies Act 2016, section 593).

### Can SSM take my name off a company I never agreed to join?

Sometimes, if what was lodged is false. You may apply to SSM to rectify its register, and SSM may act on its own (Companies Act 2016, section 602). But SSM may refuse, for example where the error did not arise in its own work or the document is over seven years old (Practice Note 6/2019), and a refused applicant may appeal to the court; where the facts are disputed, expect to need a court order. SSM's record and the company's register of members are separate: a wrong entry in the register of members is corrected by the court (section 103).

### My employer wants me as director and 51% shareholder so the company can register as Bumiputera. Is that allowed?

Not safely. You would be the registered 51% owner (Companies Act 2016, section 101) and a director in full, liable for unpaid EPF, SOCSO, sales tax and service tax while a director. Holding 51% can also make you liable for the company's income tax, and LHDN or EPF may stop you leaving Malaysia. The company must ask you who the real owner is; a false reply is an offence (section 60C). Being paid changes none of this. Under Treasury circular PK 8, directors and owners of a company that faked Bumiputera status can be blacklisted for up to 5 years.

## Sources

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