Directors: Qualification/Disqualification, Appointment, Duties and Liabilities of Directors. Also, Explain ‘Independent Directors’ and Their Responsibilities.

2940 Words Mar 12th, 2013 12 Pages
Directors: Qualification/disqualification, appointment, duties and liabilities of directors. Also, explain ‘independent directors’ and their responsibilities.

Company law in Malaysia is governed by Companies Act 1965. This Act is modelled on English Companies Act 1948 and Australian Uniform Companies Act 1961. Therefore, references will be made to English and Australian cases for interpretation of the law on certain areas.

In every company there are directors to manage and direct the company. A company’s directors and officers are responsible for managing the company’s business and affairs. In small companies, particularly small family companies, some or all of the shareholders will typically be involved in the management of the
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Next, if he has been convicted of any offence in connection with the promotion, formation or management of a corporation. A director who has convicted of any offence involving fraud or dishonesty punishable on conviction with imprisonment for three months or more also can be disqualified or as on under Section 132 of Companies Act 1965 state that if the director failure to perform any of duties as a director. Section 303 of Companies Act 1965 also state that a disqualification of director is due to failure to keep proper accounts. Such person can be disqualified for up to five years as in Section 130(1) of Companies Act 1965.

In addition, under Section 130(A) of Companies Act 1965, a director disqualified due to involvement in two or more failed companies. The court may disqualify a person from managing a company if that person is or has been a director of a company which has at any time gone into liquidation (whether while he was a director or subsequently) and was insolvent at that time, and a director of such other company which has gone into liquidation within five years of the date on which the first-mentioned company went into liquidation. In determining whether the disqualification is justified, the court will look at the person’s conduct as director of any one of these companies to decide if he is unfit

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