Companies across Malaysia are often required to make company resolutions. The Articles of Association and memorandum usually combine to form the constitution of most companies. They specify the rules by which the company is to be run and administered. However, in order to make certain decisions or change the constitution itself, certain resolutions are to be passed. Such a course of action is to be taken by a person who is among the company’s directors or shareholders. These can be made at general meetings or board meetings. Company resolutions may either be ordinary or special resolutions. A company resolution is a corporate action, sometimes in the form of a legal document, that will be voted on or has been voted on at a meeting of the board of directors of a corporation. A company resolution may be related to any topic which is related to the company. Among the most common company resolutions are those which specify the identities of those who have been granted the authority to take actions in the name of the company. This is because such information is often required by banks and other financial institutions. The form and structure of a company resolution will differ from company to company; every company in Malaysia has its own methods of creating company resolutions.
Definition of a Company Resolution
A company resolution is a written statement created by the board of directors of a company. It provides information on a corporate action to be taken. A company resolution is usually made during the annual general meeting of a company. The form and structure of every company resolution is determined by the company which makes it.
A company resolution can be about almost any matter which affects the inner workings of a company. Company resolutions provide the specific details of the action which will be taken by the company. They also specify the date of the meeting during which the resolution was created. Company resolutions may be related to important matters such as acquisitions, loans, purchases of property, identities of new board members, share sales, and filing for patents, among other important topics. If a vote leads to approval of the company resolution, the company resolution will begin to serve as a form of official documentation. Company resolutions do not usually need to be submitted to any government body.
Types of Company Resolutions in Malaysia
In Malaysia, company resolutions are made in relation to any formal decision made by a company. Company resolutions may either be ordinary or special. They may either be made by members of the board of directors or shareholders. Other details related to company resolutions are determined by the Companies Act and the company constitution.
Company resolutions may be made by the shareholders or board of directors of a Malaysian company. When shareholders make a formal decision, the resolution is known as a shareholder resolution. When the board of directors does so, the resolution is known as a board resolution.
The board of directors of a company manage the business of the company, and Malaysia’s Companies Act specifies that the members of the board directors are to make all decisions for the company except for those to be made by shareholders as specified in either the Companies Act or the memorandum and Articles of Association of the company. The members of the board of directors are to make these formal decisions through the passing of board resolutions. Board resolutions are needed whenever the Companies Act, company constitution, or any external parties require that they be used by the company which is making an important corporate decision. In most cases, board resolutions are passed when they are approved by a simple majority; however, if the company constitution stipulates otherwise, such is not the case.
A special resolution is a formal decision which has been passed through the approval of a majority voters in a meeting. Although ample written notice must be given before the meeting may be held, it could be held at shorter notice through an agreement by members who hold a significant portion of the company’s voting rights. Special resolutions are usually needed for the most important of a company’s decisions to be made.
An ordinary resolution is a formal decision made by a company passed through the approval of a simple majority of voters during a meeting.