Can You Ask the Court to Order Meeting When You Have Less Than 10%?

by Nicholas Navaron Chula ~ 19 November 2020

Can You Ask the Court to Order Meeting When You Have Less Than 10%?

Contributed by

Nicholas Navaron (Associate)

Tel: 603-6201 5678 / Fax: 603-6203 5678



There seems to be a (mis)presumption that you need 10% of the shares of the company in question to call for a meeting. This is understandable given that Subsection 310(b) of the Companies Act 2016, amongst others, expressly allows shareholders holding at least 10% of the issued share capital of the company to requisition an extraordinary general meeting. 

Subsection 310(b) of the Companies Act 2016 reads:-

“310. A meeting of members may be convened by – 
(b) any member holding at least ten per centum of the issued share capital of a company or a lower percentage as specified in the constitution or if the company has no share capital, by at least five per centum in the number of the members.”

Section 314 of the Companies Act 2016, which is the statutory provision enabling shareholders to ask the Court to order a meeting, however, does not expressly prescribe a requirement that only a shareholder holding at least 10% of the shares can make such application to the Court.

In this regard, Section 314 of the Companies Act 2016 reads:-

“(1) This section applies if for any reason it is impracticable –

(a) to call for a meeting of members of a company in any manner in which meetings of that company may be called; or 

(b) to conduct the meeting in the manner prescribed by the constitution or this Act. 

(2) The Court may, either of its own motion or on the application –

(a) of a director of the company; 

(b) of a member of the company who would be entitled to vote at the meeting; or 

(c) of the personal representative of any such member, 

order a meeting to be called, held and conducted in any manner the Court thinks fit.”

Indeed, although in relation to, inter alia, the interpretation of the Land Acquisition Act 1960, the decision of Ramly Ali FCJ in Tunku Yaacob Holdings Sdn Bhd v Pentadbir Tanah Kedah & Ors [2016] 1 MLJ 200 [FC] may be referred to. In this regard, Ramly Ali FCJ held:-

“[32]  Where the language of a legislation is clear and explicit, the court must give effect to it, whatever may be the consequence, for in that case, the words of the legislation speak of the intention of the Legislature. If the precise words used are plain and unambiguous, the court is bound to construe them in their ordinary sense, and not to limit those plain words by other considerations (see Ex-parte Guan Teik Sdn Bhd (substituting Lim Oo Guan, deceased) [2010] 1 MLJ 1 (FC).

[33]  In the above case (Ex-parte Guan Teik), Augustine Paul FCJ expressed his view that where the words used are ambiguous, the meaning to be preferred must be one which is more in accord with justice and convenience but in general the words used read in their context must prevail. His Lordship cited a passage from Bindra’s Interpretation of Statutes (7th Ed) at p 554 to affirm that ‘it may therefore, be well settled that when, a statute is susceptible of two or more interpretations, normally that interpretation should be accepted as reflecting the will of the Legislature which is presumed to operate most equitably, justly and reasonably as judged by the ordinary and normal conceptions of what is right and what is wrong and of what is just and what is unjust’.”

The significance of Section 314 of the Companies Act 2016

It is important to adopt a restricted reading of Section 314 of the Companies Act 2016, in order to avoid situations where shareholders (minority or otherwise) are left without any recourse for redress. Aside from enabling shareholders holding less than 10% in shares to apply to the Court to order a meeting, such situations include:-

  • situations where the shareholding of the companies are sporadic into various multiple parties and the whereabouts of the shareholders are not known; and
  • situations where the public companies (under the instructions of certain directors and/or shareholders (wrongful or otherwise)) refuse to provide the record of depositors pursuant to Section 34(5) of the Securities Industry (Central Depositories) Act 1991. 

The ingredients for an application under Section 314 of the Companies Act 2016

An application under Section 314 of the Companies Act 2016 appears to only require the Court to determine:-

  • whether it is not practicable to call a meeting; and
  • whether it is not practicable to conduct a meeting.

In this regard, Abdul Malik Ishak J (as his Lordship then was) in Low Son Siang @ Loo Soon Siong v. Lee Kim Yong [1999] 1 CLJ 529, held: 

“When confronted with an application made pursuant to s. 150 of the Act, the first and foremost question for the court to pose is whether the desired EGM could be conducted. The onus would then be on the plaintiff to show that it was impracticable to call for such a meeting of the company in any manner whatsoever or to conduct such a meeting in accordance with the company’s articles of association.”

In addition to the above, the case of Chong Yen Li v. Tan Fee Ling & 2 Ors [2017] 1 LNS 2225 seems to suggest that a party applying under Section 150 of the Companies Act 1965 (the predecessor to Section 314 of the Companies Act 2016) must exhaust all avenues before making such application. This is in consonance with the main question to be determined by the court when confronted with this application, i.e., whether the meeting can be called or convened.

After all, if there are other avenues to call and conduct the meeting (or address the issue which the meeting is sought to address), it could not be said to be “impracticable” to call and conduct the same.


Section 314 of the Companies Act 2016 appears to be a catch-all provision in relation to an application for a meeting to be convened.

A literal interpretation of the said provision may be able to guarantee that minority shareholders (particularly those with less than 10% of the shares) have a voice in the company.