Description
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Preparation of Resolution refers to the drafting and documentation of formal decisions made by a company’s board of directors or shareholders. These resolutions are required to authorize important business activities such as opening a bank account, appointing directors, changing company information, or approving financial statements. Properly prepared resolutions ensure the company remains compliant with the Companies Act 2016 and are often requested by banks, government agencies, and auditors.
GOV Department
- Suruhanjaya Syarikat Malaysia (SSM)
Details
- Resolutions can be classified as:
- Board Resolutions – Passed by the board of directors.
- Members’ Resolutions (Shareholder Resolutions) – Passed by company shareholders.
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Common types include:
- Appointment or resignation of directors
- Change of registered address or business nature
- Opening/closing of bank accounts
- Approval of financial statements
- Dividend declarations
- Typically prepared and recorded by a Company Secretary.
- May need to be submitted to SSM (e.g., for director changes) or provided to external parties.
Important Rules
- All resolutions must comply with the Companies Act 2016 and the company's Constitution (if any).
- Resolutions must be signed and dated properly.
- For some decisions, a simple majority is enough; others may require special resolution (75% approval).
- Resolutions should be filed with SSM within the stipulated timeframe (e.g., 14–30 days for certain updates).
Compound & Punishment
Failure to pass or file required resolutions can lead to:
- Fines up to RM50,000 under the Companies Act
- Invalid corporate actions (e.g., unauthorized director appointments)
- Compliance breaches which can impact audits, loans, and tenders
- Director liability for not fulfilling governance obligations
- SSM may impose compound fines for failure to file resolutions on time
Advisor
Jeffrey Eh Hao Yih , Director
Jeffrey has been providing expert guidance for businesses dealing with ongoing challenges. With his expertise, he aids clients in strategic business planning, streamlining operations, and enhancing productivity. Additionally, Jeffrey offers diverse business technology services to help digitize traditional businesses effectively.