FAQ – Directors
1) Executive Director
An executive director is a salaried director who works full-time and is appointed with managerial powers by the board to carry out the company’s daily operations.
2) Non-executive director
A non-executive director does not work full time, receives a smaller director’s fees and functions as a policy maker for the company.
3) Nominee Director
The Malaysia Companies Act requires all Malaysian Companies be required to have at least two directors who are ordinarily resident in Malaysia. Such a person should be either a Malaysian citizen or a person who has permanent resident status in Malaysia.
If appropriate, TAXPRO can provide the necessary qualified personnel to act as your Company Directors to ensure your compliance with the Companies Act provided all terms and conditions are satisfied.
4) Duties and Responsibilities of Directors
Directors have fiduciary duties towards the company and the shareholders who appointed them. Fiduciary duties include:-
- Act bona fide in the interest for the company. Bona fide means “in good faith”;
- Avoid a situation where there is a conflict between duty to the company and personal interest; and
- Not to make any secret profit out of the position as director.
5) The statutory duties of the directors include:
- Act honestly at all times and use reasonable diligence when discharging their duties;
- Avoid improper use of information obtained by virtue of position to gain personal advantage personally or to cause detriment to the company;
- Avoid improper use of sensitive, unpublished information to gain personal benefits;
- Before disposing of or executing any transaction for the disposal of a substantial portion of the company’s undertaking or property, obtain approval from the members in a general meeting;
- Disclose his shareholdings in the company and any changes thereof;
- Disclose his interest in any contract or proposed contract made by the company; and
- Ensure registers and statutory books are kept updated.
6) The directors responsibilities include ensuring the following requirements are complied with:
- Record minutes of all directors’ meetings;
- Make annual return and lodge with CCM;
- Keep proper accounting records;
- Table accounts, balance sheet and directors’ report at AGM;
- Circulate audited accounts to members;
- Appoint auditors;
- Comply with restriction, limitation or prohibition of a private limited company;
- Appoint company secretary;
- Make declaration of solvency in the case of voluntary winding up by member;
- Ensure that dividend payments are from profits only
7) Who can be a company director?
A director must be:
- A natural person
- Of full age and capacity (ie. 18 years old)
- Of sound mind;and
- Qualified under the Act
- For a public companies and their subsidiaries, anybody bot over the age of 70 unless specifically approved by the shareholders at the general meeting of the company.
8) What responsibilities does a director have towards CCM?
Every company director has a personal responsibility to ensure that statutory documents are delivered to the register as and when required by the Act. The following are of particular importance:
- Submitting annual accounts
- Submitting the annual returns
- Notice of change of directors or secretaries or in their particulars
- Notice of change of registered office