A substantial shareholder is anyone with an interest in 5% or more of a company's voting shares (section 136, Companies Act 2016). Such a person must notify the company in writing — within 3 days if the company is listed, or 5 days otherwise — and the company must record every notice in a dedicated register of substantial shareholders under section 144, kept at its registered office and open to inspection.
- The threshold is a 5% interest in voting shares, direct or indirect (section 136).
- The substantial shareholder must notify the company within 3 days (listed) or 5 days (other public company) of becoming one, changing their interest, or ceasing to be one (sections 137–139).
- The company keeps a separate register under section 144, at its registered office, open to members free and to others for up to RM10 per inspection (or such lesser sum as the company requires).
- This Subdivision applies to listed companies and to public companies generally — not to ordinary private companies (section 134).
- Failure to notify carries a fine of up to RM1 million, plus up to RM1,000 per day for a continuing offence (section 137).
Who this applies to: Company secretaries, directors and investors of Malaysian public and listed companies, and anyone approaching a 5% voting stake in one.
On this page
Cross 5% of a public company’s voting shares and you stop being an anonymous investor: the law now wants your name on a special register — and the clock starts ticking in days, not weeks.
Who is a “substantial shareholder”?
Under section 136 of the Companies Act 2016, a person has a substantial shareholding when they have an interest in one or more voting shares and that number is not less than five per cent of all the company’s voting shares. Where the share capital is split into classes, the same 5% test applies to a single class. A person who holds such a shareholding is a substantial shareholder in that company.
The test turns on interest, not just the name on the share certificate. A person can therefore be a substantial shareholder through shares registered in another name — which is why the notice has to spell out the registered holder and the circumstances of the interest (section 137).
What must a substantial shareholder do?
The obligation falls on the shareholder, not the company. Three events trigger a written notice to the company:
| Event | Section | Deadline (listed) | Deadline (other) |
|---|---|---|---|
| Becoming a substantial shareholder | 137 | 3 days | 5 days |
| A change in the interest held | 138 | 3 days | 5 days |
| Ceasing to be a substantial shareholder | 139 | 3 days | 5 days |
“Listed” means the company’s shares are quoted on a stock exchange; “other” covers unquoted public companies. The notice must give the shareholder’s name, nationality, address and full particulars of the shares (section 137). For a listed company, a copy must also be served on the Registrar (SSM) on the same day the notice is given (section 141). Missing any of these deadlines is an offence carrying a fine of up to RM1 million, plus up to RM1,000 for each day it continues after conviction (section 137).
What is the register, and how is it different from the register of members?
Section 144 requires the company to keep a register and forthwith enter the names — in alphabetical order — of everyone who sends a section 137 notice, together with the information in it, and to record any section 138 or 139 updates. It is kept at the registered office, open to members without charge and to any other person on payment of up to RM10 per inspection (the Act sets RM10 as a maximum, “or such lesser sum as the company requires”). The Registrar can require a copy of the register within 14 days.
Do not confuse it with the register of members. That register, under section 50, exists for every company — including private ones — and lists all members and their holdings. The register of substantial shareholders is narrower and different in purpose:
- It exists only for public and listed companies (section 134), not ordinary private companies.
- It captures interests of 5% and above, including indirect ones — not just registered ownership.
- It is populated by shareholder notices, not by the company’s own share transfers.
What happens if someone defaults?
Beyond the fine, section 145 lets the Court — on the Registrar’s application — freeze a defaulter’s shares: restraining their sale, suspending voting rights, deferring dividends, or even ordering the shares sold. The Court can excuse an honest inadvertence or mistake (except for orders restraining voting rights), but the powers are wide.
What’s next
Check whether your company falls within section 134 before setting up the register — most private companies do not need one. If it does, confirm your registered office holds a current section 144 register and that your inspection process is documented (free for members; up to RM10 for others). Investors nearing 5% should pre-draft the section 137 notice, because the 3-day listed-company window leaves little room. Always read the deadlines and figures above against the current text of the Companies Act 2016 on the SSM website, and seek professional advice for indirect-interest questions.
What percentage makes someone a substantial shareholder in Malaysia?
An interest in not less than 5% of the total voting shares in the company, or 5% of a class of voting shares where the capital is divided into classes (section 136, Companies Act 2016).
How long do you have to notify the company?
Within 3 days if the company's shares are quoted on a stock exchange, or within 5 days in any other case, after becoming a substantial shareholder, changing your interest, or ceasing to be one (sections 137, 138 and 139).
Do private companies keep a register of substantial shareholders?
No. The Subdivision applies to companies whose shares are quoted on a stock exchange, public companies whose shares are not quoted, and bodies the Minister declares (section 134). Ordinary private companies are outside it, though every company still keeps a register of members under section 50.
What is the penalty for not disclosing a substantial shareholding?
An offence punishable on conviction by a fine not exceeding RM1 million, and a further fine of up to RM1,000 for each day the offence continues after conviction (section 137, with parallel offences in sections 138 and 139).
The following are deliberately unstated or described only qualitatively until confirmed by a subject-matter expert:
- Confirm these figures against the current in-force text of the Companies Act 2016 at the date of use (check for any amendments after the 1.8.2022 reprint).
- The RM10 inspection fee under section 144(2) is a statutory maximum ('or such lesser sum as the company requires'); confirm the company's own fee, which may be lower.
- The notification penalty is attributed to 'sections 137–139' as shorthand; each of sections 137, 138 and 139 carries its own subsection (5) offence provision (fine only, no imprisonment). Confirm this phrasing is acceptable for the intended audience.
Sources
- Companies Act 2016 (Act 777), Subdivision 7 — Substantial Shareholdings (sections 134–145) — Companies Commission of Malaysia (SSM)
- Notice of Interest of Substantial Shareholder (prescribed form, sections 137, 138 & 141) — Companies Commission of Malaysia (SSM)
Change history
| Version | Date | Change | By |
|---|---|---|---|
| 01.00 | 7 Aug 2026 | Approved and published. | — |