What Happens When Company Directors Refuse to Meet

If you are a shareholder in Malaysia, you might eventually find yourself needing to call an Extraordinary General Meeting (EGM) to address urgent corporate matters. Navigating the legal requirements under the Companies Act 2016 is essential to ensure your meeting is valid and your decisions are legally binding .

What is an EGM and when is it called?

An EGM is a shareholder meeting held outside the regular schedule of an Annual General Meeting (AGM) to tackle specific, time-sensitive issues . These can include major corporate actions, the removal of directors, or amendments to the company's constitution . Under the Companies Act 2016, an EGM can be convened by the board of directors or by shareholders who hold at least 10% of the company's issued share capital .

The importance of quorum

For any meeting to be valid, a quorum must be present at the time business begins . Under Section 328(2) of the Companies Act 2016, the default quorum for a members' meeting is two members personally present, unless the company's constitution specifies a higher number . If a company has only one sole shareholder, the quorum is simply that one member . Importantly, "personally present" includes those attending virtually in hybrid or electronic meetings .

What happens if a meeting cannot be held?

If a company becomes "stuck" because it cannot meet the quorum requirements, the law provides a pathway for relief. Under Section 314 of the Companies Act 2016, if it is deemed "impracticable" to call or conduct a meeting, a court may intervene . Courts have previously held that this applies in situations where members deliberately avoid meetings to create a deadlock . If the court orders a meeting, it may even direct that a single member be deemed to satisfy the quorum requirement .