Constitution of Company (Malaysia)
CONSTITUTION OF COMPANY
Companies Act 2016 (Act 777) | Section 35
[Company Name]
SSM Registration No.: [Registration Number]
Registered Office: [Registered Office]
This Constitution was adopted by special resolution of the members on [Adoption Date] pursuant to Section 35 of the Companies Act 2016 (Act 777).
PART 1 — NAME AND TYPE
1.1 The name of the Company is [Company Name] ("the Company").
1.2 The Company is a [Company Type] incorporated under the Companies Act 2016.
1.3 The registered office of the Company is situated at [Registered Office] or at such other place in Malaysia as the Board may determine from time to time, with prior notification to SSM.
PART 2 — PRIVATE COMPANY RESTRICTIONS
2.1 The Company is a private company and accordingly:
(a) the right to transfer shares is restricted as provided in Part 6 of this Constitution;
(b) the number of members of the Company shall not exceed [Max Members], not counting persons who are employees of the Company or who were formerly employees and members while they were employees; and
(c) the Company shall not invite the public to subscribe for any shares or debentures of the Company.
2.2 The restrictions in Clause 2.1 apply pursuant to Section 28 of the Companies Act 2016.
PART 3 — SHARES AND SHARE CAPITAL
3.1 The Company may issue shares of such classes and with such rights as the Board may determine, subject to the Companies Act 2016. The current classes of shares and the rights attaching to each class are as follows: [Share Classes].
3.2 The Board is authorised to allot and issue shares subject to the provisions of Sections 75 to 89 of the Companies Act 2016 and, where applicable, the prior approval of the members by ordinary resolution.
3.3 The rights attached to any class of shares may be varied in accordance with Section 89 of the Companies Act 2016 by special resolution of the holders of that class.
3.4 The Board may pay dividends on shares only if the Company satisfies the solvency test under Section 131 of the Companies Act 2016 at the time of the proposed distribution.
PART 4 — TRANSFER OF SHARES
4.1 A member wishing to transfer any shares (the "Transferor") shall first give written notice to the Company (the "Transfer Notice"), specifying the number of shares to be transferred and the proposed price.
4.2 Pre-emption: [Pre-emption Rights]. Upon receipt of a Transfer Notice, the Company Secretary shall notify all other members of the number of shares available for purchase. Each member shall have 21 days to elect to purchase a pro-rata portion of the offered shares at the stated price.
4.3 If the existing members do not take up all the offered shares within the offer period, the Transferor may transfer the unsold shares to any person approved by the Board, at a price not less than the stated price, within 90 days of the expiry of the offer period.
4.4 The Board may, in its absolute discretion and without assigning reasons, decline to register any transfer of shares. Any refusal must be communicated to the transferee within 30 days of the application for registration.
PART 5 — DIRECTORS
5.1 The minimum number of directors shall be [Min Directors] and the maximum shall be [Max Directors]. At least one director shall at all times be ordinarily resident in Malaysia, as required by Section 196(1) of the Companies Act 2016.
5.2 Director appointment: [Director Appointment Procedure].
5.3 A director may be removed from office by ordinary resolution of the members under Section 206(2) of the Companies Act 2016, provided that special notice of at least 28 days has been given to the Company of the intention to propose such resolution.
5.4 The Board shall manage the business and affairs of the Company pursuant to Section 211 of the Companies Act 2016. Directors shall exercise their powers in good faith in the best interests of the Company and in accordance with their duties under Sections 213 to 219 of the Companies Act 2016.
5.5 Board meetings shall be duly constituted when a quorum of [Board Quorum] directors is present. Resolutions may also be passed by circular resolution signed by all directors entitled to vote, under Section 287 of the Companies Act 2016.
PART 6 — GENERAL MEETINGS
6.1 The Company shall hold an Annual General Meeting within 6 months after the end of each financial year under Section 340(2) of the Companies Act 2016, unless the Company is exempt from the AGM requirement under Section 340(6).
6.2 Notice of a general meeting shall be given to all members, directors, and auditors at least [AGM Notice Period] days before the meeting, in accordance with Section 316(2) of the Companies Act 2016.
6.3 The quorum for a general meeting shall be [Member Quorum] members present in person or by proxy. If a quorum is not present within 30 minutes of the scheduled time, the meeting shall be adjourned for 7 days (or to such date as the chairperson determines), at which adjourned meeting the members present shall constitute a quorum.
6.4 Ordinary resolutions require a simple majority of votes cast. Special resolutions require at least 75% of votes cast under Section 292(1) of the Companies Act 2016. Each member shall have one vote per ordinary share held, on a poll.
6.5 Members may appoint a proxy to attend and vote in their place under Section 334 of the Companies Act 2016. A proxy need not be a member of the Company.
PART 7 — COMPANY SECRETARY AND ACCOUNTS
7.1 The Company shall at all times have a company secretary who is a qualified person under Section 235 of the Companies Act 2016, licensed by SSM.
7.2 The Board shall cause proper accounting records to be kept under Section 245 of the Companies Act 2016 and shall prepare audited financial statements for each financial year in accordance with the applicable financial reporting standards — MPERS for private entities or MFRS for public companies.
7.3 The Company's financial year shall end on 31 December of each year, or such other date as the Board may determine with notification to the Inland Revenue Board of Malaysia (LHDN) and SSM.
PART 8 — INDEMNITY AND WINDING UP
8.1 Subject to Section 289 of the Companies Act 2016, every director, officer, and company secretary of the Company shall be indemnified out of the assets of the Company against any liability incurred in the execution of their duties, except in respect of fraud, negligence, breach of duty, or breach of trust as determined by a court of competent jurisdiction in Malaysia.
8.2 The Company may purchase and maintain directors' and officers' (D&O) liability insurance as authorised by Section 289(2) of the Companies Act 2016.
8.3 A resolution for voluntary winding-up of the Company shall be a special resolution under Section 439 of the Companies Act 2016, requiring not less than 75% of votes cast by members entitled to vote.
Director / Authorised Signatory
________________
Signature
Company Secretary
________________
Signature
What Is a Constitution of Company (Malaysia)?
A Constitution of Company in Malaysia records the governing rules and procedures that bind the body and its members.
The Companies Commission of Malaysia (SSM), operating under the Ministry of Domestic Trade and Cost of Living, administers the lodgement and maintenance of company constitutions under Sections 35 to 40 of the Companies Act 2016. A Constitution, once adopted by special resolution and lodged with SSM, binds the company and all its members as if it were a contract signed by each member under Section 33 of the Act.
Adopting a Constitution is optional for companies incorporated after 31 January 2017. Under Section 31 of the Companies Act 2016, a company that does not adopt a Constitution is governed by the statutory replaceable rules in Schedule 1 to the Act. The replaceable rules cover the core governance matters, but companies with specific shareholder arrangements — including venture capital investors, joint venture partners, or family business governance structures — routinely adopt a tailored Constitution to override or supplement the defaults.
For companies incorporated under the repealed Companies Act 1965, the existing Memorandum and Articles of Association continued to apply as a Constitution by virtue of the transitional provisions in Section 619 of the Companies Act 2016. Such companies can adopt a new Constitution at any time by special resolution and lodging it with SSM within 30 days under Section 36.
The stamp duty treatment of a Constitution is governed by the Stamp Act 1949 (Act 378). The Constitution itself does not attract stamp duty on lodgement with SSM. However, any instrument of transfer of shares that gives effect to the Constitution's share transfer provisions attracts ad valorem stamp duty at RM3 per RM1,000 of consideration under Item 32(b) of the First Schedule to the Stamp Act 1949, payable to the Inland Revenue Board of Malaysia (Lembaga Hasil Dalam Negeri, LHDN).
The legal framework governing the Constitution of Company (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Constitution of Company (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2016 (Act 777) sets the foundational requirements.
When Do You Need a Constitution of Company (Malaysia)?
A Constitution of Company is needed in Malaysia when a company's internal governance requires customisation beyond the default replaceable rules in Schedule 1 to the Companies Act 2016.
A Constitution is needed when a company incorporates with multiple classes of shares — ordinary shares, preference shares, or redeemable preference shares — and needs to specify the rights, voting entitlements, and dividend priorities for each class that differ from the statutory defaults under Section 85 of the Companies Act 2016.
A Constitution is required when a joint venture company is established between two or more parties (Malaysian and foreign) and the parties need to enshrine reserved matters, veto rights, anti-dilution protections, and exit mechanisms in the constitutional document that binds all current and future shareholders under Section 33(1) of the Act.
A Constitution is needed when a company seeks external financing from a licensed bank or financial institution under Bank Negara Malaysia's regulatory framework, as lenders typically require sight of the Constitution to verify borrowing powers, the authority to grant security, and compliance with any restrictions on creating charges.
A Constitution is required when a company needs to introduce drag-along rights, tag-along rights, or right of first refusal on share transfers that are more detailed than the default pre-emption provisions in Schedule 1, particularly for Sdn. Bhd. companies with private equity or angel investors.
A Constitution amendment is required when a company converts from a private company (Sdn. Bhd.) to a public company (Bhd.) under Sections 42 to 44 of the Companies Act 2016, removing the mandatory private company restrictions and updating the governance provisions to meet the listing requirements of Bursa Malaysia Securities Berhad.
Parties in Malaysia should prepare a Constitution of Company (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Constitution of Company (Malaysia)
A Constitution of Company for a Malaysia Sdn. Bhd. must contain the following essential elements under the Companies Act 2016.
Company Name and Type: The Constitution must state the company's full registered name (including 'Sdn. Bhd.' suffix) as approved by SSM under Section 26 of the Companies Act 2016. The company type — private company limited by shares, limited by guarantee, or unlimited company — must be clearly stated.
Private Company Restrictions: Under Section 28 of the Companies Act 2016, the Constitution must contain the three mandatory private company restrictions: (a) restriction on the right to transfer shares; (b) limitation on membership to not more than 50 persons (excluding current and former employees); and (c) prohibition on inviting the public to subscribe for shares or debentures.
Share Capital and Classes: The Constitution should specify the classes of shares, the rights attaching to each class (voting rights, dividend entitlements, capital distribution rights), and the procedure for issuing new shares and varying class rights under Sections 85 to 89 of the Companies Act 2016.
Directors' Appointment and Powers: The minimum and maximum number of directors, eligibility criteria (including the requirement for at least one director ordinarily resident in Malaysia under Section 196), procedures for appointment, removal under Section 206, and the scope of the board's authority to manage the company's business.
General Meetings: Procedures for calling and conducting Annual General Meetings under Section 340 and Extraordinary General Meetings under Section 311, minimum notice periods (14 days under Section 316), quorum requirements, voting by show of hands and poll, and proxy appointment rules under Section 334 of the Companies Act 2016.
Share Transfer Restrictions and Pre-emption: Detailed pre-emption rights requiring a member wishing to transfer shares to first offer them to existing members at a price determined by the board or independent auditors, director discretion to refuse registration of a transfer, and permitted transfers to associates or related parties.
Dividends and Distributions: The board's power to declare dividends subject to the solvency test under Section 131 of the Companies Act 2016, the procedure for interim and final dividends, and any priority rights of preference shareholders.
Indemnity and Insurance: A provision indemnifying directors, officers, and the company secretary against liabilities incurred in the exercise of their duties, subject to the limitations in Section 289 of the Companies Act 2016, and authorising the company to take out directors' and officers' (D&O) liability insurance.
Additional compliance elements for a Constitution of Company (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Constitution of Company (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/business/corporate/constitution-of-company-malaysia
"Constitution of Company (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/business/corporate/constitution-of-company-malaysia.
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title = {Constitution of Company (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/business/corporate/constitution-of-company-malaysia}},
note = {Free legal document template. Based on Companies Act 2016 (Act 777)}
}Frequently Asked Questions
A Constitution is not mandatory for companies incorporated after 31 January 2017 under Section 31 of the Companies Act 2016. A company may choose to operate without a Constitution, in which case it is governed entirely by the replaceable rules in Schedule 1 to the Act. However, for companies with more than one shareholder, specific shareholder arrangements, or external financing requirements, adopting a tailored Constitution is strongly advisable. Companies that do not adopt a Constitution lose the ability to customise governance rules, cannot create class rights or weighted voting, and are subject to the default pre-emption rules in Schedule 1 which may not reflect the parties' commercial intentions. Most Malaysian lawyers advise incorporating with a Constitution for any company with two or more shareholders or any company that anticipates external investment.
A Malaysia company adopts a new Constitution by passing a special resolution under Section 36(1) of the Companies Act 2016, requiring approval by at least 75% of the votes cast by members entitled to vote. The special resolution may be passed at a general meeting or by written resolution if the Constitution or the Act permits. After the special resolution is passed, the company must lodge a copy of the Constitution and the special resolution with SSM via the MyCoID online portal within 30 days, under Section 36(2), together with the prescribed lodgement fee of RM20. SSM will enter the Constitution in the register and make it available for public inspection. For a company converting from its old M&A under the Companies Act 1965 to a new Constitution under the Companies Act 2016, the same special resolution and lodgement procedure applies.
Yes, shareholders of a Malaysia company may enter into a separate shareholders' agreement that operates alongside the Constitution. A shareholders' agreement is a private contract between the shareholders and is not lodged with SSM, providing greater confidentiality than the Constitution (which is a public document). However, there is an important hierarchy: the Constitution, once lodged with SSM, binds the company and all members under Section 33(1) of the Companies Act 2016. If the shareholders' agreement contains provisions inconsistent with the Constitution, the Constitution prevails in relation to the company's internal governance, but the inconsistent shareholders' agreement terms may still be enforceable as personal obligations between the contracting shareholders. To avoid conflict, shareholders commonly ensure that the Constitution and the shareholders' agreement are consistent, or that the shareholders' agreement expressly acknowledges the Constitution's primacy.
For companies incorporated under the Companies Act 1965 before 31 January 2017, the existing Memorandum and Articles of Association (M&A) continues to apply as a Constitution by virtue of Section 619 of the Companies Act 2016 transitional provisions. The old M&A is treated as if it were a Constitution adopted under the 2016 Act, with any provisions in the M&A that are inconsistent with the non-modifiable provisions of the Companies Act 2016 being of no effect. Companies were given the option to adopt a new Constitution at any time by special resolution. There was no statutory deadline for adopting a new Constitution, so many pre-2017 companies continue to operate under their old M&A. However, provisions in the old M&A that relied on the objects clause or that referred to provisions of the Companies Act 1965 that have been repealed may need to be updated in a new Constitution to avoid ambiguity.
A Constitution of Company in Malaysia does not require notarisation or witnessing in the conventional sense. Under Section 35 of the Companies Act 2016, the Constitution is adopted by special resolution of the members and lodged with SSM — no independent witnessing or notarisation is required for the Constitution itself to be effective. However, when the Constitution is used in connection with share transfer instruments, those transfer instruments must be executed as proper legal instruments and the stamp duty paid to LHDN under Item 32 of the First Schedule to the Stamp Act 1949 before the transfer is registered by the company. For companies with foreign shareholders, the Constitution may need to be apostilled or legalised if it is to be used as evidence in a foreign jurisdiction, under the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Hague Convention 1961), to which Malaysia acceded in 2023.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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