Most Malaysian-based companies have shareholder agreements. Shareholder agreements define the main details of how the company`s shareholders are related to the management and operation of the company; So they are really of the utmost importance. Paid-up capital is the amount of funds or capital that shareholders have injected into the company for shares allocated to shareholders and issued to shareholders. It is possible, however, to argue that shareholder agreements are related to the business of the company. For example, a shareholder pact can spell out a company`s business and the composition of its directors. The Singapore Court of Appeal in Ho Yew Kong/Sakae Holdings Ltd  SGCA 33 emphasized this conundrum and explained it as follows: In order to ensure that the terms of the shareholders` pact bind shareholders in accordance with the 1965 Companies Act, it would be necessary to include them in the company`s bylaws. To answer the question above, one would have to estimate what a shareholders` pact is; and what repressive acts are within a company. Before 2013, the courts were reluctant to consider a breach of a shareholder pact to be depressing. However, the courts have not ruled out the existence of such a violation. While a director and a shareholder may be the same person (or a separate person), their function and role in a corporate regulatory framework are totally different. In principle, a shareholder is the owner and manager who manages the day-to-day operations.
But what happens when a shareholder violates a shareholder pact? Will it be depressing for other shareholders? Shareholder agreements are often used as protection for shareholder protection, as they can act as a buffer for shareholders in times of misfortune. They allow losses caused by certain events to have a reduced effect. These events may include changes in the company`s financing, the management of the company, the company`s dividend policy, procedures for stock transfers and the valuation of shares by the company. Shareholder agreements are contracts that govern the relationship between the company`s shareholders. Shareholder agreements define the rights and obligations of each shareholder of the company with respect to the operation of the company, as well as the terms of transfer of the company`s shares. However, shareholder agreements do not change the role of shareholders in a company, unless otherwise stated. A shareholder is a natural or legal person (including a limited company) that legally owns one or more shares in a public or private company. Shareholders may also be designated as members of a company.
Simply put, the shareholder is the owner of the business. A shareholder or partner owns a company by holding its shares. It is a director who runs the company. A director is not obligated to be a shareholder and a shareholder does not have the right to be a director. Can the management (directors) of a majority or majority company, for any reason, liquidate the shares of a small shareholder? Given the above and the fact that a shareholders` pact is a relationship between shareholders, companies in Malaysia that do not have them, both shareholders and the company pose potential difficulties in the future, particularly in the case of limited companies that are small or medium-sized enterprises (SMEs).