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Directors I

Directors I

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Published by: Syifaa' Najib on May 11, 2013
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07/01/2014

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DIRECTORS

• Table A. an alternate or substitute director. 2. . Art 73 confer on the directors the power to manage the business of the company. any person occupying the position of director of a corporation by whatever name called. any person in accordance with whose directions or instructions the directors of a corporation are accustomed to act: and 3.DEFINITION OF DIRECTOR • “Director” is defined by section 4(1) as including: 1.

Types of Director 1) By nature of task Executive Non-executive 2) By type Chairman Nominee Alternate 3) By nature De facto Shadow .

They owe the same duties as the executive director Lembaga KWSP v Rubfil sdn bhd [2005] 7 MLJ 175 . performances.Types of Director  Executive: running the day to day business  Non-executive :Cadbury Report defined-’person apart from directors’ fees and shareholding are independent of the management and free from any business or other relationships which could materially interfere with the exercise of independent judgment’. To bear issue of strategy. resources and standard of conduct.

• Alternate director: a temporary substitute .Types of Director • Chairman: chair the meetings and sign the minutes of the meetings.

 It is not necessary to characterises the person as ‘lurking in the shadows’. A person can be a shadow director quite openly.Types of Director  Shadow director:  person who is not validly appointed as a director but the directors of the company are accustomed to act in accordance with the person’s instructions or directions. and • acts in the position of a director but who is not validly appointed as a director. .  • De facto director: Section 4: • is appointed to the position of a director but is not described as a director.

he breached his fiduciary duty to the company (industrial concrete products bhd v concrete engineering bhd). The interest of the company prevail over interest of the nominator) • Where nominee director has allowed his duty to conflict.Types of Director • Nominee director: represents the interest of employees. a particular group of shareholders or a creditor. kumagai Gumi ltd v Zenecon Pte ltd (S’pore)  Boulting v Association of Cinematograph [1963] 2 QB 606  OCBC ltd v Justlogin pte ltd [2004] 2 SLR 675 ICP v CEPCO [2001] 8 CLJ 262 . • Must avoid conflicts of interest (Scottish cooperative wholesale society v Meyer.

directors are appointed by members of the company. the first 2 directors of the company must be named in the memorandum and the Articles  In an existing company. The position ex for retired director.HOW ARE DIRECTORS APPOINTED AND REMOVED?  122(1): every company must have at least 2 directors who each has his principal or only place of residence within Malaysia.  How are directors appointed?  In a newly formed company. can be filled by a person elected by an ordinary resolution at a general meeting. Article 66. Table A & 67 .

Who may a director?  An individual (not a company) s 122(2)  18 years old s 122(2) at least.but under s 129 the company at general meeting may extend his term of office until the next general meeting (must be approved by special resolution).  must not be an undischarged bankrupt  must not have been convicted of criminal offence involving fraud or dishonesty  must consent to act as director (s 123) .  Any age limit? For private company-no. for public company or its subsidiary is 70.

What is the effect of defective appointment?  S 127: the acts of the director shall be valid notwithstanding any defect that may afterwards be discovered in his appointment or qualification.   S 124(1) every director. .  S 124(3): a director shall vacate his office if he has not obtained his qualification within the period required or after obtaining it he ceases to hold the qualification. must obtain his qualification within 2 months after his appointment (or a shorter period as is fixed by the articles). who is required by the articles to hold a specified share qualification and who is not already qualified.

and in the following subsequent years (every year) one-third of directors for the time being.resignation  Article 72(e) resigning by giving notice in writing to the company  A 63 at the first AGM. then the nearest one-third shall retire from office. if their number is not 3.  Khoo Choon Yam v Gan Miew Chee [2003] AMR 3074 . or. all directors shall retire from office.

Removal of director  In a public company. its constitution may allow directors to remove another director. s 128(1) provides that the members may remove a director by ordinary resolution before the expiration of his office  In a private company.  S 128(7): if a director has a contract of employment as an executive director. he can claim damages for breach of contract. In a public company.  128: a director cannot be removed if it will cause the number of directors to fall below 2 . it is not possible for directors to remove another director-s 128(8).

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