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What is a Shareholder in the context of Malaysia?

Want to know more about what is a shareholder and rights as a shareholder. Use the following links to:

What is a Shareholder in Malaysia?

shareholder is a person or legal entity (including a private limited company) that legally owns one or more shares in a public or private company. Shareholders may also be referred to as members of a company. Simply put, the Shareholder is the owner of the company.

Important Notice: We always get asked by clients “what is a shareholder?“, “what is a director?” and “what is the difference?”

Although a director and shareholder may be the same person (or separate person) their function and role in a company legal framework is absolutely different. Basically, a shareholder is the owner and director manage the day to day operation.

Legally, the entry of the name of a person in the register of members as a shareholder is evidence that legal title to the shares is vested on the said person.

A nominee shareholder is a person who is named on the register of members as the owner while being in fact acting for the benefit and at the direction of the real owner. Usually, the nominee shareholder conduct and power is governed by a deed of trust or nominee agreement.

Under the law, Shareholders are legally separate from the company itself. They are generally not liable for the debts of the company and the shareholders’ liability for company debts are said to be limited to the unpaid share price, unless if a shareholder has offered guarantees.

Now that we have address the question of what is a shareholder? Let’s briefly discuss shareholder’s rights.

what is a shareholder, shareholder of company in malaysia

Rights as a Shareholder in Malaysia

Shareholders may be granted special privileges depending on a share class. The board of directors of a company generally manages a company for the benefit of shareholders.

Subject to the applicable laws and any shareholders agreement, shareholders may have the right, such as to:

  • sell or be restricted to sell their shares.
  • vote on the appointment directors.
  • nominate directors and propose shareholder resolutions.
  • receive dividends if they are declared.
  • access certain information pertaining to the affairs of the Company.
  • sue the company for violation of fiduciary duty.
  • purchase new shares issued by the company.
  • to what assets remain after a liquidation.

The following are other relevant articles which may help further:

1) 3 Types of Business Setup in Malaysia

2) How to Setup a Company in Malaysia (i.e. Sdn Bhd Company)?

3) What are the Annual Compliance Requirement of a Private Limited Company (Sdn Bhd)

4) How to Choose the Right Company Secretary for your Private Limited Company (Sdn Bhd)?

5) What are the Issues faced by foreigner to setup a Company in Malaysia?