Corporate and shareholder disputes
Naidu Chambers | Bangsar, Kuala Lumpur
Naidu Chambers, in Bangsar, Kuala Lumpur, acts for shareholders, directors, companies and business partners in disputes about how a company is run, who controls it, and what happens when a business relationship breaks down.
The firm acts in:
- Minority shareholder (oppression) petitions under section 346 of the Companies Act 2016
- Derivative actions brought on behalf of a company, under sections 347 and 348
- Disputes between directors, and claims for breach of directors' duties
- Joint venture and partnership disputes, deadlock and exit
- Disputes over share transfers, share valuation and shareholders agreements
- Statutory demands and winding-up petitions involving companies
- Disputes arising from share sales, acquisitions and joint venture agreements, including warranty and indemnity claims
Clients outside Kuala Lumpur
The firm's only office is in Bangsar, Kuala Lumpur. It acts for clients across the Klang Valley and in Seremban, Ipoh and Melaka. See Kuala Lumpur, Petaling Jaya and Shah Alam.
Contacting the firm
To make an enquiry, send a short note with your name, the other party or parties involved (so the firm can check for any conflict of interest), a brief description of what has happened, and any dates or deadlines you know of. Please do not send detailed confidential documents until the firm has confirmed it can act. Every enquiry receives a reply.
Send a confidential enquiry Call +60 3-2779 5017Frequently asked questions
What can a minority shareholder do if the majority is acting unfairly in Malaysia?
Under section 346 of the Companies Act 2016, a shareholder may apply to the High Court if the company's affairs are being conducted, or the directors' powers used, in a way that is oppressive to them, disregards their interests, or is unfairly discriminatory or prejudicial to them. If the court agrees, it can make a wide range of orders, including requiring the majority or the company to buy the shareholder's shares, regulating how the company is run, or in some cases winding the company up. Naidu Chambers in Bangsar, Kuala Lumpur acts in shareholder disputes in Peninsular Malaysia.
Can a shareholder sue a director on behalf of the company?
Yes, through a derivative action. Under sections 347 and 348 of the Companies Act 2016, a shareholder or director may, with the leave of the court, bring proceedings in the company's name, for example against a director who has breached their duties. The court considers whether the applicant is acting in good faith and whether the action appears to be in the company's best interests.
Can a director be personally liable in Malaysia?
Usually a company's debts belong to the company, not to its directors. However, directors can be personally liable in certain cases, including for breach of their duties under the Companies Act 2016 (such as the duty to act in good faith in the company's best interests and the duty of reasonable care), for fraudulent trading, under personal guarantees they have signed, and under some tax and statutory contribution laws.
What happens if a company does not pay a debt it owes me?
A creditor can sue for the debt. Where a company owes an undisputed debt above the minimum amount set under the Companies Act 2016, the creditor may serve a statutory demand on the company. If the company does not pay, or reach terms, within the time allowed by the Act, the creditor may present a winding-up petition to the High Court. A statutory demand should not be used where the debt is genuinely disputed.
Does a shareholders agreement override the company's constitution?
Not automatically. A shareholders agreement binds the shareholders who sign it as a contract, while the constitution binds the company and all its members. Where they conflict, the outcome depends on the wording of both documents and the facts, which is why the two should be drafted to match.
Can I be removed as a director?
Yes. Shareholders can generally remove a director by resolution, following the procedure in the Companies Act 2016 and the company's constitution, which includes giving proper notice and allowing the director to be heard. Removal may also lead to claims under a service contract or a shareholders agreement. A lawyer will confirm the procedure that applies to your company.