What Must Be Done Before Firing the Director of a Malaysian Company
Before removal of a Malaysian company’s director from office, the director of a public company should be presented with a prior special notice and, according to the requirements which are mentioned in Section 207 of the Companies Act, must be given an opportunity to plead a personal case as well as to provide reasons against the proposed removal.
There are certain differences related to the removal of the director of a private company which is based in Malaysia. In the case of a private company, if the removal is through other means other than those which have been stipulated in Section 206 of the Companies Act, neither providing the director in question with a special notice nor convening a general meeting are necessary.
During instances in which the removal of a director from office is through an annual general meeting, the shareholders are not permitted to make a written resolution. Instead, a general meeting ought to be convened for the purpose of the removal of the director. The director must then be compensated for the loss of the office.
As an aside, after the director has been fired, another person will have to replace the fired director in the position. It may occasionally be difficult for someone to hire a qualified and suitable person to serve as the director of the company. Fortunately, if you are faced with such a problem in your own company, we at Paul Hype Page & Co have services which we provide in order to alleviate this problem. We will aid you in the selection of a nominee director who has fulfilled all of the directorial qualifications of a Malaysian company. After you have paid a reasonable and affordable fee, this person will fill this important role until a full-time director is appointed.
The Firing of a Malaysian Company’s Director
There is no specific time during which a director of a Malaysian company must be fired. Once the company has found out through its management that the director has either committed offenses which are in violation against of company’s policies or engaged in any illegal or flagrantly unethical conduct, the director must be terminated immediately and another director must be appointed to the position to allow for continuity in the leadership of the company.
A director of a company based in Malaysia can be forced to relinquish the position of director if the director has failed to have attained the minimum age requirement or if the director becomes or is declared to be bankrupt. There are also certain instances in which a court order forbids a person from becoming the director of a company in Malaysia. If the director has been found to be such a person, the director ought to be fired. Other situations which ought to bring about the firing of a company’s director include a situation in which a director does not own a certain percentage of the company’s shares as dictated by the Articles of Association of the company as well as during instances of the director’s frequent absence from important company meetings. Of course, if a director of a company chooses to resign, the director will immediately cease to serve as one of the directors of the company.
In summary, a company’s director is a crucial person who does much to ensure the success of any Malaysian company. However, there are certain instances during which it can clearly be seen that the director ought to be removed from the position. A director is an important leader to the company and should be replaced as soon as the director is fired from the company. However, the director can go to court to contest firing if the director believes that the firing was conducted through either illegal or inappropriate means?