Does a Malaysian Sdn Bhd Need a Constitution (2026)? Sections 31–37 of the Companies Act 2016: Adopting or Amending by Special Resolution, the 30-Day SSM Lodgement, Old M&A and the Clauses Foreign Shareholders Need

Almost every foreign shareholder setting up a Malaysian Sdn. Bhd. asks the same question at some point: do we need a constitution, and if we already have one, how do we change it? Since the Companies Act 2016 (Act 777) came into force on 31 January 2017, the old memorandum and articles of association are gone and the constitution is optional for a company limited by shares. That freedom is useful, but it also means many companies run on the Act's default rules without knowing what those defaults are, and many older companies still carry 1965-era articles that no longer fit the law. This guide explains what the constitution does, when it is worth adopting one, how to adopt or amend it by special resolution, the 30-day lodgement with SSM, and the clauses that matter most to foreign investors.

Quick answer (as at October 2026): A Malaysian private company limited by shares does not have to have a constitution (section 31(1) of the Companies Act 2016). If it has none, the Act's default rules apply to the company, its directors and its members (s.31(3)). A company may adopt a constitution by special resolution (at least 75% of votes cast) and must lodge it with SSM within 30 days (s.32(4)); failure is an offence with a fine of up to RM50,000. An existing constitution can be altered by special resolution unless it prohibits alteration (s.36(1)), with the amended version lodged within 30 days (s.36(3), fine up to RM10,000). A company limited by guarantee must have one (s.38).

What a constitution is under the Companies Act 2016

The constitution is the company's internal rulebook. It sets out how shares may be issued and transferred, how directors are appointed and removed, how meetings are run, and any limits the owners want to place on the company. Under section 33, once adopted it binds the company and every member "as if" each member had signed it and promised to observe it, and money a member owes under the constitution is a debt due to the company.

Before 2017, every company had a memorandum of association (name, objects, authorised capital) and articles of association (internal rules), usually based on Table A of the Companies Act 1965. The 2016 Act merged these into a single, optional document. Section 34 defines the constitution as:

• for a company limited by shares incorporated under the 2016 Act, the document it adopts under section 32;
• for a company limited by guarantee, the document lodged at incorporation under section 38; and
• for a company registered under the old law, its memorandum and articles as originally registered or altered.

That last point surprises many owners. A company incorporated in, say, 2012 did not lose its articles in 2017. Those articles are still its constitution today, and they still bind the company until they are amended or replaced.

Section 32(2) adds an important safety valve: a constitution has no effect to the extent that it contravenes or is inconsistent with the Act. Section 31(2) says the same from the other side. Members and directors have the rights and duties in the Act, except where the Act permits them to be modified and the constitution actually modifies them. A constitution can change the defaults the Act allows you to change. It cannot switch off mandatory rules such as directors' duties under section 213 or the solvency test for dividends.

Do you need one? Operating with and without a constitution

Many small owner-managed companies run perfectly well without a constitution. The Act contains a complete set of default rules, and the phrase "subject to the constitution" appears throughout it to mark the places where a constitution can change those rules. If you have no constitution, the default simply applies.

Here are the defaults that matter most in practice, and what a constitution can do with them:

As a rule of thumb, a single-owner company with one or two directors rarely gains much from a constitution. The case for adopting one gets strong when:

• There is more than one shareholder group, for example a Chinese parent with a Malaysian partner, and the minority wants protection that survives a change of shareholders.
• An investor is coming in and needs pre-emption switched off for the new issue, or special rights attached to a class of shares.
• A bank, licensing authority or counterparty asks for one. Some regulators and banks ask for a copy of the constitution when you apply. A company without one should be ready to explain that it relies on the Act.
• The company was incorporated before 2017 and its articles still talk about authorised capital and par value, which section 74 abolished. Clauses like these are out of step with the current Act and confuse banks and buyers during due diligence.

If you are still at the incorporation stage, it is usually simpler to decide this before the company is registered. Our step-by-step guide to incorporating a Sdn Bhd covers where the constitution fits in the incorporation sequence.

How to adopt a constitution: the special resolution and the 30-day clock

Section 32 is short and strict. The steps we follow when we adopt or amend a company constitution in Malaysia for clients are:

1. Agree the draft. Start from the company's real governance needs, not a template. Check every clause against the Act; anything inconsistent will have no effect anyway (s.32(2)).
2. Board resolution to propose it. The directors resolve to put the constitution to the members and approve the notice or written resolution.
3. Members pass a special resolution. Under section 292, a special resolution needs at least 75% of the votes of members who are entitled to vote and do vote. At a meeting, at least 21 days' notice is required and the notice must set out the text and state that it is proposed as a special resolution. A private company may instead pass it as a written resolution (s.290(1)), but section 292(2) says it is only a special resolution if it says so and is passed as one.
4. Lodge with SSM within 30 days of the resolution (s.32(4)). The company secretary lodges the notice with the adopted constitution attached and a declaration. Since 14 July 2026 company lodgements go through SSM's Corporate Registry System (CRS), and the usual SSM lodgement fee applies.
5. Update the statutory records. File the signed resolution in the minute book and keep the adopted constitution at the registered office with the other statutory records.

The penalty for missing the 30-day deadline is heavier than most owners expect: under section 32(5), the company and every officer in default commit an offence, with a fine of up to RM50,000 and up to RM500 a day for a continuing offence. The resolution itself is valid from the day it is passed, but the filing is still due.

How to amend an existing constitution

Section 36 governs amendments. A company with a constitution may alter or amend it by special resolution, unless the constitution itself prohibits the alteration (s.36(1)). The amendment binds the company and members from the date the resolution is passed or from a later date stated in it (s.36(2)). The company must notify SSM and lodge a copy of the constitution as amended within 30 days (s.36(3)). The fine for missing this is up to RM10,000, plus up to RM500 a day (s.36(4)).

Three practical points:

• Lodge the full amended document, not just the changed clause. Section 36(3) asks for "a copy of the constitution as altered or amended". A consolidated version also saves everyone, including your own bank, from piecing together a document from several resolutions.
• Entrenched clauses. If a constitution says a clause cannot be changed, or can only be changed with unanimous consent, the general 75% rule does not override that. Read the amendment clause first.
• When the normal route is impossible, for example because a deceased member's shares are in limbo or the constitution's own procedure cannot work, a director or member may apply to the High Court under section 37. The court order and the amended constitution must then be lodged with SSM within 30 days.

Amendments often come with other changes: a share transfer that brings in a new partner, a new class of preference shares, or a name change. Each of these has its own SSM notice and deadline, so plan the sequence before the shareholders sign anything.

Replacing old memorandum and articles (pre-2017 companies)

For a company incorporated under the Companies Act 1965, the memorandum and articles remain its constitution under section 34(c). They are not void. But they were written for a law that no longer exists, and several features are now out of date:

• Authorised capital and par value. Section 74 says all shares have no par value. Clauses that set an authorised capital "divided into shares of RM1 each" no longer describe how the company's shares work, and amounts in the share premium account became part of share capital under section 618(2).
• Objects clause. Many old memoranda list dozens of objects. Under section 35(2), if the constitution states objects, the company is restricted to them. A company that has moved into a new line of business may be acting outside its own objects.
• References to repealed sections of the 1965 Act and to procedures, such as an annual general meeting for every company, that private companies no longer need.

There are two routes. You can amend the old articles clause by clause, or you can adopt a completely new constitution by special resolution that replaces the memorandum and articles in full. For anything beyond a minor fix, a full replacement is usually cleaner. It is lodged within 30 days in the same way.

Constitution vs shareholders' agreement: what goes where

Foreign investors often ask whether they need both. In most joint ventures the answer is yes, because the two documents do different jobs:

• The constitution is public, binds the company and every present and future member automatically (s.33), and can only be changed by special resolution. It is the right place for share transfer restrictions, pre-emption, quorum and the rights attached to share classes.
• A shareholders' agreement is a private contract. It binds only the people who sign it, and it can contain commercial terms such as funding commitments, exclusivity, non-compete undertakings, deadlock procedures and exit valuation formulas.

The two documents must not contradict each other. If the shareholders' agreement promises the minority a veto over new share issues but the constitution is silent and section 85 allows the board to issue shares to existing members pro rata, the company itself is not bound by the private promise. We cover the drafting side in our guide to joint venture shareholders' agreements and constitutions.

Costs, timelines and documents

Once the constitution is on SSM's file, banks and foreign regulators usually want a certified copy. SSM's certified copy is a separate request; see our certified true copy of constitution service.

Common mistakes we see

• Downloading a template that conflicts with the Act. Clauses copied from another country's model articles, or from 1965 Table A, may have no effect under section 32(2), and the owners only find out when they try to rely on them.
• Treating the shareholders' agreement as if it changes the company's rules. It binds the signatories, not the company's future shareholders.
• Adding an objects clause "to look professional". Under section 35(2) it restricts what the company can do. Most private companies are better off without one unless a regulator requires it.
• Missing the 30-day SSM lodgement, which exposes every officer in default to a fine of up to RM50,000 for an adoption or RM10,000 for an amendment.
• Passing a written resolution that does not say "special resolution". Under section 292(2) it is then only an ordinary resolution, and the adoption is open to challenge. Our guide to board resolutions and members' written resolutions in Malaysia walks through circulation, the 28-day lapse and how majorities are counted.
• Forgetting the old M&A. A pre-2017 company that "never had a constitution" usually does have one: its memorandum and articles.

Our recommendation

If you are a single foreign shareholder with your own directors, start without a constitution and rely on the Act. Adopt one when a second shareholder group, an investor or a regulator gives you a reason. If your company was incorporated before 2017, check whether its articles still talk about authorised capital, par value or a long objects list. If they do, replacing them with a modern constitution is a small project that prevents larger problems during financing, due diligence or a sale.

Whatever you decide, the procedure is the same: draft against the Act, pass a properly worded special resolution, and lodge with SSM within 30 days. ONEKEY BIZ's company secretaries can review your current document, draft the resolution and lodge it for you through our company constitution service. If you are also paying dividends or bringing in a new investor, read our guide on how to declare a dividend in a Sdn Bhd, because the constitution may require shareholders to approve final dividends. Contact us with your company number and current constitution and we will tell you what needs to change.

This article is general information only, not legal, tax or immigration advice. Policies, thresholds and official fees are set by the relevant Malaysian authorities and may change. Talk to our consultants about your specific situation.