# Appointing and Resigning a Director of a Malaysian Company

> Consent to act under s.201, the s.196 minimum number of directors, the s.196(3) bar on resigning below that minimum, how a resignation takes effect under s.208, and the 14-day s.58 notification to SSM.

- Category: company-secretary
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/company-secretary/appoint-resign-director

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A director of a two-person Sdn Bhd falls out with his co-shareholder, signs a
resignation letter, hands it over and walks. Eighteen months later SSM's records
still show him as a director, a creditor names him in a demand, and he discovers
that his resignation was never lodged — and that on the facts, under s.196(3) of
the Companies Act 2016, it may never have taken effect at all.

Appointment and resignation look like the two simplest events in a company's life.
They are the two most commonly botched, because the Act attaches conditions at
both ends that a resignation letter cannot override.

## What must happen before someone can be appointed?

**Section 201 is a precondition, not a formality.** A person shall not be
appointed a director unless he has **consented in writing** to be a director
**and** made a declaration that he is not disqualified from being appointed or
holding office under the Act.

Two documents, or one document doing two jobs. A consent that says only "I agree
to act as director" is incomplete — the declaration of non-disqualification is a
separate statutory element, and s.198(1) sets out what the declarant is
declaring against.

The person must also satisfy s.196(2): a director shall be a **natural person**
who is **at least eighteen years of age**. A corporate director is not possible
under the Act.

## Who appoints, and by what instrument?

| Situation | Mechanism | Tenure |
| --- | --- | --- |
| Named in the incorporation application | Holds office from the date of incorporation — s.202(1) | Until he ceases to hold office under the Act |
| Subsequent director | **Ordinary resolution** of members — s.202(2) | Per the resolution and constitution |
| Additional director appointed by the Board | Subject to the constitution, the Board may appoint at any time — s.202(3) | Public company: until the next AGM. Private company: per the terms of appointment |
| Filling a casual vacancy | The Board may appoint at any time — s.208(4) | Public company: until the next AGM. Private company: per the terms of appointment |

Two points of detail. In a **public company**, s.203(1) prohibits a single
resolution appointing two or more directors unless the meeting first agrees,
without any vote against, that the motion may be so made; a resolution passed in
breach is void under s.203(2). And s.204 preserves the validity of a director's
acts notwithstanding any defect discovered after appointment or in his
qualification — which protects third parties, not the company's compliance
position.

## What is the minimum number of directors?

Section 196(1) sets the floor:

- **private company — one director**
- **public company — two directors**

Section 196(4) then qualifies which directors count toward that floor:

- **(a)** they **shall ordinarily reside in Malaysia by having a principal place
  of residence in Malaysia**; and
- **(b)** they **shall not include an alternate or substitute director**.

Read the residence limb carefully. The test is a principal place of residence in
Malaysia, not citizenship, not a work permit, and not physical presence for any
particular number of days. A foreign national who genuinely resides in Malaysia
can satisfy it; a Malaysian citizen whose principal residence is Singapore may
not.

The limb bites at appointment and it keeps biting. If the single resident director
of an Sdn Bhd relocates permanently overseas, the company no longer has a
qualifying director for the purposes of s.196(1), even though nobody resigned.

## How does a resignation actually work?

**Section 208(2)** — subject to s.196(3) and s.209, a director may resign his
office by **giving a written notice to the company at its registered office**.

**Section 208(3)** — the notice is **effective when it is delivered at the address
of the registered office**, or at a later date specified in the notice.

Three consequences follow. Delivery to the registered office is the operative act,
so a letter handed to a co-director at a coffee shop does not start the clock.
Acceptance by the board is **not** required — the Act contains no such condition,
and a board cannot refuse a resignation that satisfies s.208. And a director may
choose a future effective date by stating it in the notice, which is how an
orderly handover is normally documented.

Resignation is only one of the ways an office is vacated. Section 208(1) lists all
seven:

- **(a)** resignation in accordance with s.208(2);
- **(b)** retirement under the Act or the constitution without re-election;
- **(c)** removal in accordance with the Act or the constitution;
- **(d)** becoming disqualified under s.198 or s.199;
- **(e)** becoming of unsound mind, or a person whose person or estate is liable
  to be dealt with under the Mental Health Act 2001;
- **(f)** death;
- **(g)** otherwise vacating office in accordance with the constitution.

Note that (d), (e) and (f) operate automatically. No resolution vacates the
office; the event does. The company's obligation is to notify SSM within 14 days
of it having happened.

## The restriction that catches people: s.196(3)

This is the provision most commonly attributed to s.208 and it is not there.
Section 208(2) is expressly **subject to** it.

> **s.196(3)** — A director of a company shall not resign or vacate his office if
> by his resignation or vacation from office the number of directors of the
> company is reduced below the minimum number required under subsection (1), and
> any purported resignation or vacation of office in contravention of this section
> shall be **deemed to be ineffective unless a person is appointed in his place**.

Three things to take from it:

1. It covers **vacation as well as resignation**. A director who becomes
   disqualified, or whose office would otherwise be vacated under the
   constitution, is caught by the same words.
2. The consequence is not a penalty — it is that the resignation **does not
   happen**. The director remains a director, with every s.213 duty attached, and
   with continuing exposure for what the company does while he believes he has
   left.
3. The only cure the subsection offers is that **a person is appointed in his
   place**.

Read together with s.196(4), the effect is sharper than the bare numbers suggest.
The minimum must be made up of directors who ordinarily reside in Malaysia and are
not alternates. A board of three where two are non-resident cannot lose the
resident director by resignation.

## The sole or last remaining director: s.209

Section 209(1), itself subject to s.196(3), provides that where a company has only
one director or the last remaining director, **that director shall not resign
until he has called a meeting of members** to receive the notice of resignation
and to appoint one or more new directors. Section 209(2) applies the same rule
where the sole director is also the sole shareholder.

Where the sole director's office is vacated instead by **disqualification, mental
incapacity, death or under the constitution** — s.208(1)(d), (e), (f) or (g) — the
duty falls on the secretary. Section 209(3) requires the secretary, **as soon as
practicable**, to call a meeting of the next of kin, other personal
representatives, or of members as the case may be, for the purpose of appointing a
new director. Section 209(4) entitles the secretary to be indemnified by the
company for the reasonable costs and expenses of that meeting.

And there is an outer limit. Under **s.209(5)**, where the next of kin, personal
representatives or members fail to appoint a director **within six months of the
death of the last director**, the Registrar may direct the company to be struck
off.

Section 210(6) provides one further route: where a sole director who is also the
sole shareholder is unable to manage the company's affairs by reason of mental
incapacity, the committee appointed under the Mental Health Act 2001 to manage his
estate may appoint a person as director.

## What has to be filed, and when?

**Fourteen days, twice, for two different duties.**

Section 58(1)(c) requires the company to notify the Registrar **within fourteen
days** after a person ceases to be, or becomes, a director, giving the particulars
required in the s.57 register. For an appointment, s.58(3) requires the notice to
contain the s.57(1)(a) particulars **and to be accompanied by that person's
consent to act** — which is where the s.201 consent is actually consumed. Breach
carries a fine up to **RM50,000** plus **RM500 a day** under s.58(4).

Separately, s.57(4) requires the company to effect the change in its **own**
register within fourteen days. That register lives at the registered office and
carries its own penalty. Filing with SSM does not discharge it.

A new director also acquires his own personal duty immediately: under s.219(2)(a)
he has **fourteen days from the date he became a director** to notify the company
in writing of his interests in its shares and debentures.

## Common mistakes

**Citing s.208 for the minimum-number restriction.** It is s.196(3). Section
208(2) merely makes the resignation power subject to it. Guidance that cites
s.208 for the rule usually also misses that the restriction covers **vacation**,
not just resignation.

**Treating a resignation as needing board acceptance.** Section 208(3) makes it
effective on delivery to the registered office. There is no acceptance
requirement, and a board resolution "accepting" the resignation records the fact
rather than creating it.

**Delivering the notice anywhere but the registered office.** Section 208(2) and
(3) both name it specifically.

**Appointing without a written consent and declaration.** Section 201 makes the
consent and the declaration of non-disqualification preconditions, and s.58(3)(b)
requires the consent to be lodged with the appointment notice.

**Counting an alternate director toward the minimum.** Section 196(4)(b) excludes
alternates and substitutes expressly.

**Overlooking the residence requirement after appointment.** Section 196(4)(a) is
a continuing qualification of who counts toward the minimum, not a one-off check
at incorporation.

**Assuming the six-month strike-off risk applies to any vacancy.** Section 209(5)
is framed around the **death of the last director**. Other vacancy routes are
governed by the s.209(3) duty on the secretary to call a meeting as soon as
practicable, without a stated outer period.

## What's next

Where the departure is not voluntary, the mechanics change entirely and a written
resolution is prohibited — see
[removing a director](/en/company-secretary/remove-a-director).

For the filings triggered by the change, see
[register of directors](/en/company-secretary/register-of-directors) for the s.57
and s.58 split, and [statutory registers](/en/company-secretary/statutory-registers)
for the wider set. A newly appointed director should be briefed on
[directors' duties](/en/company-secretary/directors-duties) and given a
[s.219 shareholding notice](/en/company-secretary/director-shareholding-notification)
to complete within his first fourteen days.

## Sources

- Companies Act 2016 (Act 777), reprint as at 1 August 2022 — https://www.ssm.com.my/Pages/Legal_Framework/Document/Companies%20Act%202016_Akta%20777_BI%20(1.8.2022).pdf (SSM)
- Companies (Amendment) Act 2024 (Act A1701) — https://www.ssm.com.my/Pages/Legal_Framework/Document/A1701%20BI.pdf (SSM)
- FAQ Part E — Notification of Particulars and Change in Register of Directors, Manager and Secretaries — https://www.ssm.com.my/Pages/Legal_Framework/FAQS-ON-COMPANIES-ACT-2016-AND-TRANSITIONAL-ISSUES/part_e.pdf (SSM)

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