NUR AFFIERA ALIA ASMA BINTI AHMAD SABRI

254317

ONLINE EXERCISE 2

QUESTION 1

Syarikat Atap Genting Sdn Bhd (SAGSB) carries on a business of supplying

construction materials. There are three directors namely; Pengiran Ali from Brunei,
Chong from Singapore and Husin from Malaysia. Pengiran Ali and Chong do not reside
in Malaysia. Both of them were appointed as director due to their skills, even though
they are still 17 and 20 years of age, respectively.
In one occasion, Hussin, entered into a contract on behalf of SAGSB supplying
construction materials to Nathan, a contractor. After the contract has been concluded,
it came to Nathan’s knowledge that Husin is an undischarged bankrupt and he would
like to terminate the said contract.
Identify and solve the arising problems with reference to the provisions of the
Companies Act 2016.

Issue:

Whether Pengiran Ali, Chong and Husin are qualified to be directors of the company?

Legal Provisions:

 Section 196(2) of the Companies Act 2016 that stated a director shall be a natural
person and at least 18 years age.
 Section 196(4) of the Companies Act 2016 that stated a director shall ordinarily
reside in Malaysia by having a principal place of residence in Malaysia.
 Section 198(1) of the Companies Act 2016 that stated a person shall not hold office as
a director of a company if he is undischarged bankrupt.

Application: Based on the situation above, Pengiran Ali, Chong and Husin are not qualified
to be directors of SAGSB Company as one person is a minor (Pengiran Ali), two persons do
not reside in Malaysia (Pangiran Ali and Chong) and there is a person (Husin) who is
undischarged bankrupt respectively. All of these situations are contrary to the above
provisions under Companies Act 2016.

Conclusion: In conclusion, Pengiran Ali, Chong and Husin are not qualified to be directors
according to the provisions under Companies Act 2016 and Nathan can terminate the contract
between SAGSB as all of the directors are not qualified to be a director of a company under
Companies Act 2016.
NUR AFFIERA ALIA ASMA BINTI AHMAD SABRI
254317

QUESTION 2

Discuss the qualification of a director in reference to the Companies Act 2016.

Qualification of a director can be referred to Section 196(1) of the Companies Act 2016 that
stated a private company is required to have a minimum of one director and in case of public
company, it shall have two directors. Besides that, Section 196(2) of the Companies Act
2016 can also be referred which states that a director must be a natural person and at least 18
years age which means the director must not a minor. For public company, there is no age
limit for directors. For instance, a director over 70 years of age is qualified to be a director
and no additional administrative procedure is required. Section 196(4) of the Companies Act
2016 also stated a director shall ordinarily reside in Malaysia by having a principal place of
residence in Malaysia. This means those who do not reside in Malaysia is not qualified to be
a director. Other than that, Section 198(1) of the Companies Act 2016 also stated a person
shall not hold office as a director of a company if he is undischarged bankrupt.