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CONSTITUTION

What is a Company Constitution?

In organizations, constitution determine crucial details related to the company, its shareholders, directors, and company secretary. It is a formal document outlining the regulations governing a company. It also outlines the interactions between the corporation, its owners, directors, and other significant individuals. The company’s constitution is a legally binding contract between board of company, within compliance with the Companies Act and any other applicable laws. By registering a new business, the company’s constitution must be carefully taken into account. When a new constitution is adopted or a change to the constitution has been made, a resolution made by the shareholders of the company must be passed in order for such changes to officially take effect.

Importance of a Company Constitution

• Contract between the firm and board of the Company.
• The personal status of a company’s shareholders is thus unaffected by its laws.
• Any clauses in a constitution that could grant personal rights may not be enforced by a shareholder.

What is Included in a Malaysian Company’s Constitution?

• Appointments of board of Company
• Inspections of the company’s books
• Annual general and extraordinary general meetings
• Issues related to the company’s shares and dividends
• Type of company
• Shares & share certificates
• Transfer of shares
• Dividends
• Meetings of the members of the board of directors
• Voting rights during meetings
• Director Remuneration
• Official company documents
• Conflict of interests
• Powers and responsibilities of directors
• Powers and responsibilities of a company secretary
• Indemnities
• Shareholders’ loan facility

Rights of Shareholders According to a Malaysian Company’s Constitution.

• A guideline for how a Malaysian corporation is to be governed are laid out in its constitution.
• Companies without a constitution must rely on the Companies Act to determine the rights, responsibilities, and obligations of each shareholder.
• Shareholders are not responsible for the management of the business on a daily basis, nor are they involved.
• The Companies Act does specify that a company’s shareholders have some authority.