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Resigning from Directorship of a Private Company: Company's Article & Company Act which one to Follow?

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asked on May 15, 2020 at 17:43
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edited on May 4, 2021 at 21:05
 
I am trying to resign from a private company (sdn bhd) from the director position, and so I delivered my resignation letter to the company registered address. According to the Company Act 2016, I should be automatically considered resigned from the position.

However, the Company Secretary emailed me saying that the resignation is not valid because the Company's Article says that minimum director is 2. If I resign, the company will have less than 2 directors which is contrary with the Article.

Company Act 2016 says minimum director for a private company is 1 and if the Company's Article is conflict with the Company Act, which one should prevail?

Background: Company Secretary said the choices I have is that the company has to appoint a replacement to take over my seat. OR the company can apply to abolish the company's Article and change it to single directorship. HOWEVER, the other director refuses to collaborate, he does not want to appoint a new director and he also refuse to abolish the Article.

If the Company Article prevails, is there any way I can leave the company? 

The other director is very aggressive and violent, I can no longer work with him. And the company's not complying to the Suruhanjaya Syarikat Malaysia (SSM)'s requirements, audited account has been delayed even before I joined the company. I have been trying to bring the company back to track, however without much cooperation. And I am not even getting any pays from the company.
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5 Answers

answered on May 15, 2020 at 20:56
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edited May 4, 2021 at 21:03
 
If the Company Article prevails, is there any way I can leave the company?
You can only leave if another director is appointed.

The other director is very aggressive and violent, I can no longer work with him.
Don't go to the office/workplace.  Nobody is forcing you to work there. You can work at other place while still being a director and shareholder.
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answered on May 15, 2020 at 20:58
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If the Company Article prevails, is there any way i can leave the company?

If you have a lot of money, you can appoint a lawyer to apply to the Court to wind up the company.
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answered on May 15, 2020 at 21:03
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edited May 4, 2021 at 21:04
 
This doesn't solve the issue because this guy is verbally violent. Impossible to avoid communication when working in the same company. Besides, directors should work closely to achieve the company's goals. If vision is not the same why force working together. Clearly this partner of mine does not get this as well.
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answered on May 15, 2020 at 22:17
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edited May 4, 2021 at 21:06
 
This doesn't solve the issue because this guy is verbally violent. Impossible to avoid communication when working in the same company.

Already told you not to work and and not to answer his calls.
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answered on May 15, 2020 at 23:05
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edited May 4, 2021 at 21:13
 
@Lee Li

if the company's Article is conflict with the Companies Act, which one should prevail?
There is no conflict. The Memorandum and Articles (M&A) of a Private Limited Company is the birth certificate of the company. Companies Act 2016 is an amendment/addition to Companies Act 1965. The existing M&A prevails unless changes have been made with the approval of Companies Commission Of Malaysia/Suruhanjaya Syarikat Malaysia (SSM).

The purpose of Companies Act 2016 is to attract overseas investors, same as most in ASEAN countries which have amended theirs.

The company you have joined is formed before 2016 and maybe formed from a dormant or shell company which have an existing M&A based on Companies Act 1965.

The Company Secretary has not info you of all other conditions to change the M&A.
Here maybe some of those conditions.
1. All Audited Accounts must be up to date.
2. All company taxes must be up to date duly paid.
3. All Directors and Shareholders must agree to it.
4. Other terms and conditions and operations of the company apply.

There is no sure fix for your type of case.
Make a report to Companies Commission Of Malaysia for any infringements conducted by the company. Most probably Companies Commission Of Malaysia will require you to get a court order to discharge your responsibility as a Director from the date of the Order for any fraudulent business conduct and/or infringements of Companies Act 1965. Your responsibility still exist until the dissolution, cessation, or voluntary winding up of the company.
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