Duties of Directors

A company is a separate legal entity, separate and distinct from its individual members/shareholders.  For small company normally members of the company become the Director. Members of the company will appoint directors (members or outsider) who will be entrusted with the power and authority to make decisions for the running of the company and manage the company's affairs.

For many small businesses, members of the company who have come up with their own capital to fund their businesses are often involved in the day-to-day management of the company. These members usually appoint themselves to be the directors of the company.

For larger businesses such as public listed companies, it is practically impossible for the shareholders to manage the company's affairs and therefore directors are empowered to operate the company.

What are the requirements of directors of a company?

There must be at least 2 directors who each have his/her principal or only place of residence within Malaysia, whether he/she are Malaysian or not.

To qualify to become a director of a company, he must be:

1. A natural person
2. Of full age (18 years old and above)
3. Of sound mind
4. Not disqualified under the Companies Act 1965

Directors are not required by law to have special knowledge, or experience to act in that capacity.

Start Up Business in Malaysia

Do you need to set up a company to start up business in Malaysia?

Businesses in Malaysia are required to be carried out by either these two types of business organisations:

1. Business firms (governed under Registrar of Business Act 1956)

2. Registered companies (governed under Companies Act 1965)

Start up Business in Malaysia - What is a business firm?

Business firms can be either of these two types:

1. Sole proprietor/ Sole trader - Sole proprietor is a business carried out in the name of an individual.

2. Partnerships (governed by Partnership Act 1961) - Partnership is a business owned by two or more individuals.

Both these types of business firms have no separate legal existence apart from the persons who owns the business and properties cannot be held under the name of the business firms. All contracts are signed in the name of the individuals who own the business and their liability is unlimited.