When running a company in Malaysia, decisions cannot be made simply by verbal agreement or left undocumented. From appointing directors to issuing shares or even opening a corporate bank account, every significant action must be supported by proper documentation. This is where corporate resolutions in Malaysia play a vital role.
A corporate resolution is not just a piece of paper – it is a formal, legally binding decision passed by directors or shareholders that ensures a company’s governance remains transparent, compliant, and accountable. Under the Companies Act 2016, maintaining accurate corporate resolutions is a legal obligation, not a choice.
Failing to document these decisions properly can expose businesses to penalties, disputes, or even regulatory action from the Suruhanjaya Syarikat Malaysia (SSM) – the Companies Commission of Malaysia.
In this article, we will explore why corporate resolutions are essential, what they include, the types of resolutions recognised in Malaysia, and how businesses can ensure they remain compliant.
What are Corporate Resolutions in Malaysia?
A corporate resolution is a written record of decisions made by a company’s directors (board resolutions) or shareholders (shareholders’ resolutions). These resolutions formalise necessary actions and provide a legal record of decisions.
There are two main types of corporate resolutions in Malaysia:
| Type of Resolution | Who Passes It? | Purpose |
|---|---|---|
| Board Resolution | Board of Directors | For day-to-day decisions such as appointing officers, opening bank accounts |
| Shareholders’ Resolution | Shareholders at AGM or EGM | For significant actions such as amending the constitution or winding up a company |
What are the Common Types of Corporate Resolutions in Malaysia?
Corporate resolutions are required in many scenarios. Some of the most common include:
| Scenario | Resolution Type | Who Passes It | Notes |
|---|---|---|---|
| Appointment or resignation of directors | Board Resolution | Board of Directors | Usually recorded at board meetings and filed with SSM. |
| Appointment or resignation of company secretary | Board Resolution | Board of Directors | Required for statutory compliance. |
| Opening or closing corporate bank accounts | Board Resolution | Board of Directors | Banks typically request a certified copy. |
| Approving audited financial statements | Board Resolution (recommendation) + Ordinary Resolution (adoption) | Board recommends, shareholders adopt | Board reviews first, shareholders approve at AGM/EGM. |
| Issuing new shares | Ordinary Resolution (unless otherwise stated in the constitution) | Shareholders | Shareholder approval needed as it affects ownership. |
| Transferring shares | Board Resolution (approval of transfer) | Board of Directors | Board approves, subject to company constitution restrictions. |
| Declaring dividends | Board Resolution (interim dividends) / Ordinary Resolution (final dividends) | Board or Shareholders | Interim declared by the board; final declared by the shareholders. |
| Changing the company name | Special Resolution | Shareholders | Requires filing with SSM and 75% shareholder approval. |
| Changing the registered office address | Board Resolution | Board of Directors | Must notify SSM. |
| Amending company constitution | Special Resolution | Shareholders | Needs 75% approval and lodgement with SSM. |
| Entering into joint ventures or major loan agreements | Board Resolution | Board of Directors | Unless the company constitution requires shareholder approval. |
| Winding up the company voluntarily | Special Resolution | Shareholders | Requires at least 75% majority approval. |
What Details Should Be Included in a Corporate Resolution?
A corporate resolution is only effective if it is appropriately structured and contains the correct information. In Malaysia, a well-prepared resolution should be clear, specific, and leave no room for misinterpretation. The following details are generally required:
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Company name and registration number
This identifies the company that is passing the resolution.
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Type of resolution
Whether it is a board resolution made by directors or a shareholders’ resolution passed at a general meeting.
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Date and venue of the meeting
To provide context and show when and where the decision was made.
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The exact wording of the decision
The resolution must be written precisely to avoid ambiguity.
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Purpose of the resolution
A brief explanation of why the decision was made, for example, to approve a loan or appoint a new director.
Usually, the directors or shareholders are involved.
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Company stamp (if applicable)
While not always mandatory, many companies still affix their official stamp for added formality.
By including these elements, the resolution becomes a reliable record of the company’s decision-making and can stand up to scrutiny from regulators, banks, or auditors.
Why do Corporate Resolutions in Malaysia Matter for Compliance?
When running a company in Malaysia, compliance is not just about filing annual returns or keeping accounts up to date. The way decisions are recorded also plays a crucial role, and that is where corporate resolutions come in. They give legal weight to necessary actions and protect both the business and its stakeholders.
1. Legal Obligation under the Companies Act 2016
The Companies Act 2016 makes it clear that certain decisions cannot be effective without a proper resolution. For example, the appointment of a new director or the approval of audited accounts must be formally recorded. If a company skips this step, those decisions may not hold up legally, and penalties can follow. Having resolutions in place is therefore more than just good practice – it is a statutory requirement.
2. Regulatory and Third-Party Requirements
Beyond the law, many external parties also rely on corporate resolutions. Banks typically require a certified resolution before allowing a new signatory on an account or approving a business loan. Auditors may also request resolutions to verify that key financial decisions were authorised correctly. Without these documents, companies often find their applications delayed or even rejected.
3. Transparency and Risk Management
Resolutions serve another vital purpose—they bring clarity and accountability. By keeping a written record of who agreed to what, companies reduce the risk of internal disputes. If disagreements arise later, directors and shareholders can turn to the resolutions for proof of what was agreed. In the event of a legal dispute, well-documented resolutions can also protect the company’s leadership from accusations of misbehaviour.
Read more in our guide of corporate compliance requirement in malaysia.
What Role Does a Company Secretary Play in Corporate Resolutions?
In Malaysia, the role of a licensed company secretary is central to ensuring that corporate resolutions are properly prepared and legally valid. Their work goes far beyond simple administration—they act as the link between the company, its directors, shareholders, and the regulators.
A company secretary’s responsibilities typically include:
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Drafting Resolutions
Preparing both board and shareholder resolutions in precise, accurate terms.
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Advising on Compliance
Guiding directors on what the law requires under the Companies Act 2016 and ensuring decisions are made within the right framework.
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Maintaining Records
Keeping minutes of meetings, updating statutory registers, and safeguarding the company’s official records.
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Lodging Documents with SSM
Ensuring all necessary resolutions and related forms are filed on time with the Companies Commission of Malaysia (SSM).
Without the oversight of a qualified company secretary, businesses face real risks. Important deadlines might be overlooked, resolutions may be drafted incorrectly, and documents could be rejected by SSM. Over time, these lapses can lead to penalties or even disputes over the validity of company decisions
Here is our quick guide on how to appoint a company secretary in malaysia online.
What is the Difference Between Ordinary and Special Resolutions in Malaysia?
In Malaysia, resolutions are classified into two categories:
| Resolution Type | Approval Needed | Common Uses | Examples |
|---|---|---|---|
| Ordinary Resolution | Simple majority (over 50% of shareholders present and voting) | Routine decisions that do not fundamentally alter the company’s structure |
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| Special Resolution | At least 75% shareholder approval (by votes cast at meeting or by written resolution) | Major corporate changes that impact the company’s constitution or existence |
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Special resolutions must also be lodged with SSM within 14–30 days, depending on the type of action taken.
Conclusion
Corporate resolutions are more than paperwork — they form the foundation of corporate governance in Malaysia. From appointing directors to issuing shares or opening a bank account, resolutions ensure decisions are properly documented, authorised, and legally compliant.
Without them, companies risk penalties from the Companies Commission of Malaysia (SSM), delays with banks and auditors, and even shareholder disputes. For directors and shareholders, they provide a clear record of decisions; for regulators, they demonstrate transparency and accountability.
At 3E Accounting Malaysia, we simplify compliance. Our company secretarial team handles drafting, filing, and maintaining corporate resolutions, so you can concentrate on growing your business with confidence.
Simplify Corporate Resolutions in Malaysia
From ordinary to special resolutions, our team ensures your company remains compliant with Malaysia’s regulations every step of the way.
Frequently Asked Questions
In Malaysia, corporate resolutions can be passed by either the board of directors or shareholders, depending on the nature of the decision.
Yes, even private companies in Malaysia must pass corporate resolutions to record key decisions in compliance with SSM requirements.
Corporate resolutions in Malaysia should be passed whenever significant decisions are made, such as changes in directors, shareholding, or capital structure.
A single director may approve specific resolutions if authorised by the company constitution, but most require board or shareholder approval in Malaysia.
Yes, foreign-owned companies in Malaysia must comply with the same corporate resolution requirements as local companies.
Changes to a company’s constitution in Malaysia require a special resolution passed by at least 75% of shareholders.
Abigail Yu
Author
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
