Responsibilities of Director

Director, of a SDN BHD or BHD, has many duties and responsibilities under the Companies Act 2016. He/She must be aware and comply accordingly


5/15/20241 min read

Directors hold a significant responsibility under the Companies Act 2016 ("the Act") Malaysia. Here's a breakdown of their key duties:

Fiduciary Duties:

  • Act in good faith and in the best interests of the company: This means prioritizing the company's well-being over personal gain.

  • Exercise reasonable care, skill and diligence: Directors are expected to act with the knowledge, skill, and care that a reasonable person in their position would exercise.

  • Avoid conflicts of interest: Directors must disclose any personal interests in company transactions and abstain from voting on matters where a conflict arises.

Duty to Promote the Company's Success:

  • Make informed business judgments: Directors should gather relevant information and consider potential risks before making decisions.

  • Declare dividends: Directors have the discretion to declare dividends, but they must consider the company's financial health and solvency.

Other Duties:

  • Maintain proper accounting records: The company must keep accurate financial records to demonstrate its financial position.

  • File statutory documents: Directors are responsible for filing annual returns and other documents with the Companies Commission of Malaysia (SSM) within the prescribed timeframes.


Additional Notes:

  • These are general duties, and specific situations might require additional considerations.

  • If a director breaches their duties, they may be held personally liable for any losses suffered by the company.

  • Penalty well stated in the Act for offences committed by the Director.