Business owners (Also see How to Rectify Common Accounting Errors that Owners Make) often neglect the role of the constitution in the company’s operation. In fact, the constitution acts as a vital element of the corporate governance of the company. Companies that adopt a constitution should review their constitution regularly and make sure that it shows the current goals, operations and activities of the company. Hence, in some cases, the company may need to make alterations and amendments to its constitution. If the business owners need help on this, they may contact a corporate secretarial firm Johor Bahru.
Companies that have a constitution (Also see Changing from Memorandum & Articles of Association (M&A) to Constitution) can alter or amend it by a special resolution, which means that they need to get at least 75% of the shareholder’s vote which shows that they agree with the amendment. The companies may do so unless the constitution of the company itself prohibits the company from altering or amending it. By the date the special resolution has passed, or on a later date that the shareholders have agreed in the resolution, the alteration or amendment should tie up the company and its members (Also see Register of Members for Companies in Malaysia: Requirements and Importance).
The company should inform the Registrar regarding the alteration or amendment it has made on the constitution, and submit a copy of its altered or amended constitution in 30 days from the date it has passed the special resolution. If the company or any officers fail to do so, they can be convicted a fine not exceeding RM10,000. If they continue committing the offence, after the conviction, they can be subjected to a fine of RM500 for each day the offence continues.
Also, the court can make alterations or amendments to the company constitution. As the court receives an application from a company’s director or one of its member (Also see The Register of Members), if it is satisfied that altering or amending the company’s constitution based on the procedures stated in the Companies Act 2016 is not practical, it can make an order for the alteration and amendment of the company constitution on the terms and conditions that it thinks is suitable.
The company should make sure that it has submitted an official copy of the order made as mentioned above as well as a copy of the altered or amended constitution to the Registrar for registration in 30 days from the date stated on the order. If the company or any officer fail to do so, they can be convicted a fine not exceeding RM10,000. If they continue committing the offence, after the conviction, they can be subjected to a fine of RM500 for each day the offence continues.