Company resolutions are important to every company in Malaysia because they document the decisions made and actions taken by the board of directors. Every significant action of the board of directors must be stated in the form of a company resolution.
These company resolutions serve as documents that hold the board accountable and prove to licensing boards and government regulators that the board is acting in a proper manner. Corporations are generally intended to be separate entities from their owners; thus, they are to have separate liability from the owners. Company resolutions assist in upholding this separation.
Members of a board of directors do not need to make resolutions for the daily activities of the business. These activities include hiring of employees, paying off debts, and engaging with customers, among others. Such activities are directed by the company’s corporate officers who are allowed to do so by the board of directors.
On the other hand, most decisions which do not have to do with the normal day-to-day running of a business will require a resolution to be passed. Company resolutions are also to be passed with regard to any decision which affects the constitution or rules of a company. Such decisions include the appointing of company directors, the changing of directors’ powers, the changing of the company’s name, and the changing of the company’s share structure.