Jul 17, 2020
An ordinary resolution or a special resolution to be passed via Members’ Written Resolution will based on the number of shareholders or number of shareholdings held by each shareholder?
Section 293(1) of the Companies Act, 2016 (“CA 2016”) stated that in case of a company having share capital, on a vote on a written resolution, every member shall have one vote in respect of each share or stock held by him. Therefore, passing a resolution via Members’ Written Resolution will based on the number of shareholdings held by each shareholder but not the number of shareholders.
Based on the recently decided case on Fat Boys Records Sdn Bhd, namely Mohamed Zahid (the Plaintiff) and Wong (the Second Defendant), it shows that passing an ordinary resolution via Members’ Written Resolution which required passed by a simple majority of more than half of such members under Section 291(1) of the CA 2016 must be read as meaning more than half the number of shareholding of the members and not more than half the number of the shareholders pursuant to the Section 293(1) of the CA 2016.
In conclusion, an ordinary resolution or a special resolution to be passed by way of Members’ Written Resolution signed by shareholder(s) with a total more than 50% and 75% shareholdings respectively, will be considered as a passed resolution.