Company Formation

Requirement for Being a Director for a Sdn. Bhd. Company

According to section 196 (1) of the Companies Act 2016 (CA 2016), every private company must have at least one director who shall be ordinarily resident in Malaysia by having a principal place of residence within Malaysia, whereas a public company is required to have a minimum of two directors.

Minimum requirements for being a director;

  • A natural person;
  • At least 18 years old (no maximum age);
  • Not unsound mind;
  • Not disqualified under the CA 2016.

The Companies Act 2016 does not require a director to have any specific academic or professional qualification. Nevertheless, section 213(2) provides that:

A director of a company shall exercise reasonable care, skill, and diligence with:

  1. The knowledge, skill, and experience which may reasonably be expected of a director having the same responsibilities; and
  2. Any additional knowledge, skill, and experience which the director has.

Therefore, in Malaysia, a director can no longer escape liability because he/she lacked the knowledge, skill, and experience. A director, whether he is an executive or a non-executive director is now deemed to have the knowledge, skill, and experience which may reasonably be expected of a director having the same responsibilities.