Can A Single Member Of A Company Request For A Company General Meeting?

Looking for a Corporate Lawyer and Company Secretary?

Can a single member of a company request a company general meeting? This issue was dealt with in EKA Noodles Berhad v Norhayati Binti Tukiman1. We will briefly look at the case.

Brief Facts of the Case

Norhayati, a member of the company, issued 3 EGM Notices (the first two were withdrawn) respectively to call for an EGM to remove the current directors of EKA Noodles and to appoint new directors for the company.

FYI, Norhayati holds 49,824,200 of the company’s shares, equivalent to 15.77% of the shares in EKA Noodles’ company.

The directors of EKA Noodles refused to convene the EGM. In an announcement to Bursa Malaysia, EKA Noodles took the position that (amongst others) the notice was invalid (pursuant to Section 311(3)(a) of the Company Act2), as any requisition for a meeting of members would have to be from more than one member. 

This became one of the bones of contention between the parties in court.

The Parties Contention

EKA Noodles contended that the 3rd EGM notice was invalid as the 3rd EGM Notice was brought by only a single member of the Company. In this regard, EKA Noodles pointed out that Section 311 expressly uses the word (on multiple occasions) “members” (as compared to the wordings of Section 310(b) of the Act, the words “any member” is used). Therefore, plurality must have been the intention of Parliament in regards to Section 311 of the Act.

On the other hand, Norhayati argued that the term “members” in Section 311 of the Act includes the singular i.e. “member”.

FYI, parts of Section 311 of the Act reads as follow:

“The members of a company may require the directors to convene a meeting of members of the company. A requisition under subsection (1)...The directors shall call for a meeting of members once the company has received requisition to do so from - members representing at least ten per centum of the paid-up capital of the company carrying the right of voting at meetings of members of the company, excluding any paid-up capital held as treasury shares, or in the case of a company not having a share capital, members who represent at least five per centum of the total voting rights of all members having a right of voting at meetings of members…”

The Court’s Decision and Rationale

The court rejected EKA Noodles’ argument. In coming to its decision, the court (amongst others), noted that:

  1. One of the key changes in the Act allows a company to be incorporated with only one member3. By not allowing the word “members” under Section 311 to be read as a singular noun, it would have ultimately discriminated against single-member companies as the member would not be able to assert their rights to call for a meeting under Section 311 of the Act.
  2. The Interpretation Acts4 allows the court to treat the singular words as plural and vice versa. To give you readers some context. Section 4(3) reads as follows:

    “Words and expressions in the singular include the plural, and words and expression in the plural include the singular.”

    This proposition was supported in a number of recent cases, including the federal court case of Zung Zang Trading Sdn Bhd v Kwan Hung Cheong & Anor5.
  3. Thirdly, it was never disputed that Norhayati holds more than 10% of the company shares. The court held that as long as a shareholder has numerical strength to call for a meeting (provided that it meets the criteria of doing so under legislation), the shareholder is entitled to call for a company meeting. As noted by the court6:

    “To put it in another way – it is a condition which must exist before the members of the Company or any of them, can get the whole of the members together, and consequently discharge business which perhaps the directors are not ready or willing to bring up for discussion. If that is the true view then the real reason of subsec. 1 is to prevent one individual shareholder, holding perhaps a small number of shares, from setting in motion the machinery for getting a general meeting called, but once a number of shareholders, or even one shareholder, holding not less than one-tenth of the paid-up capital desires a meeting to be called, they can require the directors by requisition to call it.”

And there you have it, hopefully, it helps!!

Looking for a Corporate Lawyer and Company Secretary?

Other related articles:

  1. Must Shareholder Be Minority Shareholder To Institute Derivative Action?
  2. What are the roles and duties of a Company Secretary in Malaysia?

1. Originating Summons No.: WA-24NCC-282-06/2021.

2. 2016.

3. Section 9(b), Companies Act 2016.

4. 1948 and 1967.

5. [2021] 4 MLJ 86.

6. By looking at the Australian case of South Norseman Gold Mines No Liability v MacDonald [1937] SASL 53.