DIRECTORS

Who is directors? Directors manage the business of the company.

Section 196(1) of the Companies Act 2016 - every private company must have at least one director whereas a public company
is required to have a minimum of two directors.

Nominated by another director to

attend meetings or perform duties on Executive A person who works for the
his behalf. director
company on a full-time basis
A director may nominate an alternate
Manages the day-to-day running of
or substitute director only if it is
the company.
permitted by the company’s
constitution.

Types of Non-executive
Director director

Alternate or
Substitute Section 2 of CA 2016- a
Director director includes a
person who occupies the
position of director. Does not work for the company in a full-
time capacity
A person in accordance with whose directions or instructions the Do not participate in managing the
majority of directors of a corporation are accustomed to act. company
This means - although the person has not been appointed as a Their job is not to run the company but
director, he still controls the actions of the board of directors.
Shadow director to keep a close eye on the managers
Majority of the directors act on his direction or instruction as a
and executive directors.
matter of practice.

zulaikhaafendi (049536)
 Means? Only Artificial That person -
human being person = must at least
can become a CANNOT attain the age of
director. 18 [majority's
age].

Refer to section
136 & 137 of CA
1950.

NATURAL Section 198(1)(a) -

PERSON
DISQUALIFIED undischarged
[18 YEARS
BY THE COURT bankrupt cannot
ABOVE]
UNDER SECTION
hold office as
SECTION 199 196(2) director
(SECTION 198
OF THE CA
2016)
Section 198(2)
- regardless
UNDISCHARGED bankrupt
Who may be BANKRPUT
UNDER
within/outside
MY
INSOLVENCY ACT
a director? QUALIFICATIONS 1967
CONVICTED OF
AN OFFENCE &
Qualifications of a Director UNDER Section 198(3) -

are listed in section 196(2) of

SECTIONS DISQUALIFICATIONS a bankrupt may
213,217,218,228 be appointed
AND 539 with the
the CA 2016.
approval of
either the
Official
Meanwhile the Receiver or the
Court
disqualifications are listed in
CONVICTED HAS BEEN
sections 198 & 199 of the CONVICTED OF AN
OF AN
OFFENCE
same Act. OFFENCE
RELATING TO THE
INVOLVING
PROMOTION,
BRIBERY,
FORMATION OR
FRAUD OR MANAGEMENT OF
DISHONESTY A CORPORATION

Section 198(4)
 Disqualified Section 208(4) - BoD shall have
pursuant to the power to appoint any person to fill
Section 205 of the CA Retires from CA 2016 or the the casual vacancy after the
2016 office Company's company's director is disqualiifed
Constitution

Section 208(2) - resign by

RETIREMENT/ giving a written notice o the
Section 208(1) of the Unsound mind TERMINATION Resigns from his company
CA 2016 postion
OF Exception - section 209
DIRECTORS

Section 202 - first director will Retires by Removed from Reference can be made
hold office until that person Rotation the BoD
to sections 206 & 207
ceases to hold office as a
director in accordance with the
CA 2016.

However, under Section 122 of the CA 1965, a director of a company shall

not resign or vacate his office if, by his resignation or vacation from office,
Since a company may have only 1 director as the number of directors of the company is reduced below 2 and any
allowed under the CA 2016, Section 209 of the purported resignation or vacation of office in contravention of this section
CA 2016 provides that such director shall not shall be deemed to be invalid.

Side resign office until that director has called a

meeting of members to receive the notice of the
If the office is vacated due to grounds of disqualification from being a

notes
director, unsound mind, death or in accordance with the constitution of the
resignation and to appoint one or more new company (Section 289(1)(d),(e),(f),(g), CA 2016), the secretary shall, as soon
directors. as practicable, call a meeting of the next of kin, other personal
representatives or a meeting of members.