What is a Company Constitution in Malaysia: Importance & Rights of Shareholders?
A company constitution in Malaysia provides important information to the company, its shareholders, its directors, and its company secretary.
It is a formal document that specifies the rules governing a company. It also defines the relationship between the company, shareholders, directors, and other important figures of the company.
As long as the constitution of the company does not violate the Companies Act or any related legislations, it represents a binding agreement between the company and its shareholders and officers.
The company’s constitution must be carefully considered during the registration of a new company. When a new constitution is adopted or a change to the constitution has been made, a resolution made by the shareholders of the company must be passed in order for such changes to officially take effect.
Importance of a Company Constitution in Malaysia
A company’s constitution in Malaysia may be regarded as a contract between the company and each member or administration of the company.
These are the people under which each person agrees to abide by the stipulations of the constitution which are applicable to that person. This, therefore, creates enforceable rights and obligations in relation to shareholders with regard to their role as shareholders of the company.
Company constitutions thus do not affect the personal status of a company’s shareholders. They also do not impose any excessive rights or obligations between the shareholders of a company and the company’s directors and company secretary. Consequently, a shareholder may not be allowed to enforce any provisions in a constitution which may confer personal rights.
A company constitution in Malaysia is created to: