PART 2 (v) - NEW COMPANIES ACT

PART 2 (v)

What else can member of a company do to make sure that director is doing a good job for the member?.

Another new provision is the “Rights to inspect director’s service contract.”

• Members of public company may inspect director’s service contract (5% of members in holding paid up shares OR 10% in cases involving Company Limited by Guarantee)

This law or policy will ensure transparency and accountability of director.

The next new provision is related to “Contract with sole member/director”.

In part 2(i), new law relating to company having single member and director was  introduced.

• When a single member/director company enter into a contract with that director and the contract is not in the ordinary business of the company.
  
  

• If the contract is not in writing, the contract must be recorded in the minutes of the board meeting following the making of the contract.

The above proposal are made to ensure that transaction between a single member/director company are properly recorded and that the director remains accountable for the company.

That’s the end, before we go to the next amendment on topic related to Dividend.

To be continued to Part2 (vi)

Mohdar ismail
Company Secretarial Practitioner