Business partners rarely plan to fall out. Most start with shared enthusiasm, a handshake and a rough idea of who will do what. Trouble tends to arrive later, when the company needs fresh funding, one shareholder wants to leave, or two directors disagree about strategy. Toh Liew and Gentry advises companies and their shareholders in Kuala Lumpur and Petaling Jaya on shareholders’ agreements and corporate governance, helping owners put clear rules in place before pressure tests the relationship.
Building Agreements That Hold Up Under Pressure
A shareholders’ agreement is a private contract between the shareholders, and sometimes the company, that sits alongside the company’s constitution and the Companies Act 2016. The Act provides the baseline, but it cannot answer questions specific to a particular business. Toh Liew and Gentry works with owners to tailor the agreement to how the company is really run, covering board composition, reserved matters that need shareholder approval, dividend policy, funding obligations, and what happens if a shareholder wants to sell or can no longer participate.
Several provisions repay careful drafting. Pre-emption and transfer restrictions stop shares from ending up with an unwelcome third party, and they should be consistent with section 85 of the Companies Act 2016 on issue of new shares. Tag-along and drag-along rights protect minority holders and allow a clean sale of the whole company. Deadlock clauses set out a path when two equal shareholders cannot agree, whether through mediation, a cooling-off period or a buy-sell mechanism. Good governance documents also limit disputes over authority, so that directors know which decisions they may take alone and which need approval.
Where disagreements do harden, the law provides remedies. Section 346 of the Companies Act 2016 allows a shareholder to seek relief where the company’s affairs are conducted in a way that is oppressive or unfairly prejudicial, and the court may also consider winding up on just and equitable grounds. These are serious steps and are costly. Toh Liew and Gentry aims to reduce the chance they are needed, but the firm also handles civil and commercial litigation when a dispute cannot be resolved by negotiation. Whether a remedy is available depends on the facts and on what the parties have already agreed in writing.
Governance is not only about disputes. A board that meets regularly, minutes its decisions and follows the company’s constitution is far better placed to satisfy lenders, investors and auditors. Directors owe their duties to the company, so a shareholders’ agreement should not be drafted in a way that asks directors to disregard those duties, and the firm reviews wording with that in mind. Related party transactions, director loans and remuneration also deserve clear rules, since disclosure of interest is required under the Companies Act 2016 and unclear practices tend to be the origin of later complaints. Toh Liew and Gentry helps companies put sensible approval thresholds in place so that day to day operations are not slowed down while important decisions still receive proper scrutiny.
Key areas where governance guidance makes a real difference include:
- Shareholders’ agreements – recording rights, duties, funding and exit terms among owners
- Board and reserved matters – clarifying which decisions need board or shareholder approval
- Transfer and exit provisions – setting valuation methods, pre-emption, tag-along and drag-along rights
- Deadlock resolution – agreeing in advance how equal shareholders will break an impasse
- Governance housekeeping – keeping minutes, registers and resolutions in order
Why Local Expertise Matters
Owners looking for a kl law firm to handle shareholder matters often want an adviser who knows the local business community as well as the statute book. Toh Liew and Gentry is based in Mont Kiara and works with clients from Kuala Lumpur and Petaling Jaya, which makes it easier to meet all shareholders together, walk through a draft line by line and agree changes in one sitting.
Those searching for a lawyer near me or a lawyer office near me for a governance review often value being able to call in with the company’s registers and constitution in hand. Local familiarity with Companies Commission of Malaysia filing practice is helpful too, since the paperwork must be consistent with the agreement.
It also helps to have a lawyer who can look at the company’s history. Many shareholders come to the firm after years of informal arrangements, such as verbal promises of equity or shares held on trust for a relative. Toh Liew and Gentry can review what has actually been recorded, identify gaps between the registers and the commercial understanding, and propose a clean way to regularise the position. Doing this before a sale, a fundraising or a family change is far cheaper than repairing it afterwards.
The firm also helps shareholders who simply want to understand where they stand. A minority shareholder may want to know what information rights they have, how to inspect the company’s registers, or what to do when dividends are never declared. A majority shareholder may want to know how far they can go in changing the board without triggering a complaint. Toh Liew and Gentry answers these questions candidly, so that each shareholder can decide whether to negotiate, restructure or, as a last resort, pursue a formal remedy.
A Firm Rooted in the Community
Toh Liew and Gentry operates from Solaris Mont Kiara, with easy access from across Kuala Lumpur and Petaling Jaya and parking that spares clients the trouble of a downtown building. In addition to corporate and commercial advisory work, the firm also handles new company and start-up matters, debt recovery, and property and real estate transactions, so a company can rely on one team as its needs change.
Businesses come back because they appreciate advice that is practical, plainly written and ready when it is needed. This article is general information and not legal advice, and any agreement should be tailored to the shareholders’ own circumstances.
Local Citation
Business Name: Toh Liew & Gentry – Solaris Mont Kiara
Address: L-3A-09, No. 2, Jalan Solaris, Solaris Mont Kiara, 50480 Kuala Lumpur, Federal Territory of Kuala Lumpur
Phone: 03-6211 7117
Hours: Monday – Friday, 9:00 AM – 6:00 PM
Website: https://tlglegal.com.my/
Email: general@tlglegal.com.my