Although the management of a company mostly drive by the Board of Directors (BOD) but the Company Act 2016 (CA 2016) did make up few circumstances in making members’ approval a must.
1. The general rule of Ordinary vs Special Resolutions:
a. Ordinary resolution means a resolution passed by a simple majority of more than 50% in generally those resolution in not stating ‘special’ is an ordinary resolution. Section 290 (3)
b. Special resolution means resolution with given notice at least 21 days and passed by majority of not less than 75% of such members.
2. The circumstances requiring Ordinary Resolutions:
a. Power of Directors to allot shares and rights for subscribing shares: S 75 (1);
b. Revoke on approval for shares allotment: S 76 (4);
c. Alteration of shares capital, increase or shares conversion: S 84 and S 86;
d. Recommendation of members to the Board affecting the management : S 195 (2);
e. Appointment, retirement and removal of director :S 202, S 205 and S 206;
f. Loan scheme to Directors or payment for lost office to Directors: S 224 (3) & S 227;
g. Arrangement of transactions with Directors, shareholders or connected individuals: S 228 (2);
h. Approval of Directors’ Fees ( S 230 -4) and auditor’s remuneration: S 274 (1) (a);
i. Appointment of Auditors – public (S 271- 4) and private ( S 267-4);
j. Proxy as a Chairperson of a meeting: S 336;
k. Voluntary winding up if the Company is solvent: cS 432 (2);
l. Voluntary arrangement in a meeting of members: S 400 (3).
3. The CA 2016 defines circumstances demanding special resolutions:
a. Change of company’s name: S. 28 (1)
b. Adoption of constitution: S. 32 (1)
c. Alteration of amendment of constitution: S. 36 (1)
d. Conversion from unlimited company to a limited company: S. 40 (1)
e. Conversion from a public company to private company or private to public: S. 41 (1)
f. Alteration of share capital : S. 84 (1)
g. Variation of rights attached to shares in a class of shares: S. 91 (2)(b)
h. Reduction of capital: S. 115 either by Court S. 116 (1) or by solvency statement S. 117 (1)
i.Providing financial assistance for the purpose of acquisition of own shares or shares of holding company (for the shares not quoted on Bursa): S. 126 (2)
j. Payment of interest out of capital where company issues shares for the purpose of funds raising in order to defray the expenses of works or constructions which is not profitable for a long period: S. 130( 2)
k. Binding recommendations by members under S. 195 (2) on the board: S. 195 (3)
l. Voluntary winding up: S. 439 (1)
m. Removal of liquidator (Otherwise the Court orders not to remove the liquidator: S. 445 (3)
n. Giving general authority on liquidator or an authority: S. 457 (1)
o. The Company is to be wound up by the Court: S. 465 (1) (a)