Jun 23, 2020
Do you know resignation as a director do not require Company’s approval?
Based on two recently decided cases, namely Wong Kok Meng v Preserver Bina Sdn Bhd [2019] 7 AMR 302 and Tan Kei Vin & 2 Ors v Feed Me Love Sdn Bhd & 2 Ors [2019] 7 AMR 623, it is interesting to know that the resignation of a director need not be approved nor consented by the Board of Directors.
Pursuant to Section 208(2) and (3) of CA 2016, a director may resign his office by giving a written notice and took effect immediately when delivered to the Company’s registered address. The Company’s approval or consent was not required. There is also no requirement that the notice of resignation must be served on the remaining directors, or that the resignation is being accepted by the Board of Directors.
The Company requires under the Section 58(1)(c) of the CA 2016 to notify the Registrar within 14 days after the director’s resignation.
We have to take note that pursuant to Section 209 of CA 2016, where a Company has only 1 director or the last remaining director, that director shall not resign office until that director has called a meeting of members to receive the notice of his/her resignation and to appoint one or more new directors.
In conclusion, there was no requirement of acknowledgement of receipt of such written notice. There is also no requirement that the notice of resignation is subject to being approved or consented by the Board of Directors.