Sec. 267: Appointment of Auditors (private company)

Below is the wording and meaning of Section 267(3) and Section 267(4) of the Companies Act 2016 (Malaysia), specifically for appointment of auditors in a private company. (Register Company)

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Section 267(3) – Appointment by the Board of Directors

Under subsection (3), the Board of Directors is responsible to appoint the auditor in these situations:

1. For a newly incorporated private company

   • The board must appoint the first auditor no later than 30 days before the end of the period allowed to submit the company’s first set of financial statements to the Registrar (SSM).

   • In simple words: when the company is new, the directors must choose the first auditor early, before the first financial statements are due to be lodged. (Register Company)

2. To fill a casual vacancy

   • If the auditor resigns, dies, is removed, or otherwise leaves office before the end of term, the board must appoint someone to fill that vacancy. (Register Company)

So: for the first audit AND for any unexpected vacancy, the board (not the shareholders) makes the appointment.

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Section 267(4) – Appointment by the Members (Shareholders)

Under subsection (4), the members (shareholders) appoint the auditor by ordinary resolution in these situations:

1. For all subsequent financial years after the first year

   • After the first financial statements have already been submitted, the auditor for the next years is appointed by the shareholders (the members), not the board.

   • This must be done within the “period for appointing auditor,” which is basically the 30-day window before the deadline to lodge the previous year’s financial statements, or (if already lodged early) the 30 days before the actual lodgement date. (Register Company)

2. If the board fails to appoint an auditor under subsection (3)

   • If the directors do not do their job (for example, they don’t appoint the first auditor or don’t fill a vacancy), then the shareholders step in and appoint the auditor by ordinary resolution. (Register Company)

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In exam style 

• s.267(3): Board’s duty

  • First auditor of a new company → board appoints.
  • Casual vacancy → board appoints. (Register Company)

• s.267(4): Members’ (shareholders’) duty/right

  • Auditor for later years → members appoint by ordinary resolution, within the required 30-day appointment window.
  • If the board fails to appoint when required → members appoint. (Register Company)

That’s the split of power: directors handle the first/urgent appointments, but ongoing yearly appointment is controlled by the shareholders.