Know Your Rights as a Shareholder of a Company in Malaysia

What is a Shareholder in Malaysia?

A shareholder is a person or legal entity (including a private limited company) that legally owns one or more shares in a public or private company. Shareholders may also be referred to as members of a company. Simply put, the shareholder is the owner of the company.

Although a director and shareholder may be the same person (or separate person) their function and role in a company legal framework is absolutely different. Basically, a shareholder is an owner and a director manage the day to day operation.

Legally, the entry of the name of a person in the register of members as a shareholder is evidence that legal title to the shares is vested in the said person.

A nominee shareholder is a person who is named on the register of members as the owner while being in fact acting for the benefit and in the direction of the real owner. Usually, the nominee shareholder conduct and power is governed by a deed of trust or nominee agreement.

Under the law, shareholders are legally separate from the company itself. They are generally not liable for the debts of the company and the shareholders’ liability for company debts are said to be limited to the unpaid share price, unless if a shareholder has offered guarantees.

Now that we have addressed the question of what is a shareholder? Let’s briefly discuss the shareholder’s rights.

Rights as a Shareholder in Malaysia

Shareholders may be granted special privileges depending on a share class. The board of directors of a company generally manages a company for the benefit of shareholders.

Subject to the applicable laws and any shareholders agreement, shareholders may have the right, such as to:

• sell or be restricted to sell their shares.
• vote on the appointment directors.
• nominate directors and propose shareholder resolutions.
• receive dividends if they are declared.
• access certain information pertaining to the affairs of the Company.
• sue the company for violation of fiduciary duty.
• purchase new shares issued by the company.
• to what assets remain after a liquidation.