X and Y were the only two directors in B Sdn Bhd. X was also employed as a paid staff of B Sdn Bhd. However, unhappy with working with Y, X submitted his resignation letter to resign from \u201call current holding position\u201d.<\/p>\n
3 years later, X complained that he was wrongfully removed as director of B Sdn Bhd and was replaced with a 3rd<\/sup> party.<\/p>\n Q. Can X say that he only resigned as staff but not director?<\/strong><\/p>\n A. No<\/strong>. Because the wording \u201call current holding position\u201d in his resignation letter includes directorship and the position as staff. X has to make it clear in his letter of resignation that he is resigning as staff and not director of B Sdn Bhd.<\/p>\n Q. Can X complain that he was wrongfully removed as director after 3 years?<\/strong><\/p>\n A. No. <\/strong>Since there was a lapse of 3 years, it was deemed unreasonable. Generally, a reasonable person who was wrongfully removed as a director of a company would write to the company promptly to enquire about the reason of him being removed from his position. To lodge a complaint 3 years later appears to be unreasonable. As such, the court will likely presume X\u2019s resignation was voluntary.<\/p>\n Q. Can Y appoint another director to fill the vacancy as a result of X\u2019s resignation?<\/strong><\/p>\n A.<\/strong> It depends on the Article of Association (\u201cAOA<\/strong>\u201d) of the Company (if the company is set up before 31 January 2017). By default, the Fourth Schedule of the old Companies Act of 1965 (“CA 1965<\/strong>“) provides that the remaining director can appoint any person to be director to fill a casual vacancy when a director resigns (Article 68). If the AOA of B Sdn Bhd is based on the Fourth Schedule, then Y (who is the only remaining director) can appoint another director to fill the vacancy from X\u2019s resignation.<\/p>\n For company that establishes after Companies Act 2016 (\u201cCA 2016<\/strong>\u201d) came into force, Section 208(4) of the CA 2016 also allows the Board to appoint a new director.<\/p>\n Q. Can X insist that his consent is required to appoint new director?<\/strong><\/p>\n A. <\/strong>No. Because X has tendered his resignation. This is notwithstanding there is a minimum of 2 directors requirement under the old CA 1965.<\/p>","protected":false},"excerpt":{"rendered":" If there are two directors in a company and one of them resign, can the sole director appoint a new director? <\/p>","protected":false},"author":9,"featured_media":3565,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1570],"tags":[3274,3275],"class_list":["post-3539","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-law","tag-directors","tag-resignation"],"yoast_head":"\n