In Malaysia, the process of setting up a business entity is regulated under the Companies Act 2016. And all matters related to this, is governed by the registrar of business in Malaysia called the Suruhanjaya Syarikat Malaysia (SSM) or Companies Commission of Malaysia.
The few incorporation options to choose from include:
- Sendirian Berhad (SDN BHD) also known as Private Limited Company, or Berhad (BHD) also known as Public Limited Company: These are company limited by shares, which requires a minimum of one shareholder (Section 14 of the Companies Act 2016), at least one company director (Section 122 of the Companies Act 2016), and a company secretary. The documents to be lodged with SSM include a company constitution, Form 48A (statuary declaration by the company director(s) of not being either bankrupt or convicted of any offence), Form 6 (declaration of compliance signed by the company secretary), original copy of Form 13A, approval from SSM on the company’s name, and identity cards of all the director(s) and the company secretary.
A main difference between SDN BHD and BHD is that the former can’t have more than 50 shareholders and its shares are not open to public, unlike the later.
Do note that in Malaysia, there is also the option of incorporating a company unlimited, whose incorporation procedure and documents required are the same as a company limited by shares. The only difference being, the constitution of an unlimited company must state that the liability of its members as unlimited.
- Sole Proprietorship or Partnership: These can include any form of trade, commerce, profession or activity done for profit, excluding those specified in the Schedule of the Registration of Businesses Act 1956 (ROBA 1956) and ROBA Rules 1957. If the business is entirely owned by an individual under his or her personal name, it is a called Sole-proprietorship. If the business is owned by two or more persons but not exceeding 20 persons, it is called a Partnership.
Do note that the registration (for one to five years) can either be done at SSM counter or online through the Ezbiz portal ezbiz.ssm.com.my, and must be done within 30 days of the starting of the business.
- Limited Liability Partnership (LLP): This is an alternative business vehicle – formed by professionals such as Lawyers, Chartered Accountants and Company Secretaries – regulated under the Limited Liability Partnerships Act 2012. It’s salient features include flexibility in terms of formation, maintenance and termination; protection of limited liability to its partners (meaning any debts are borne by the assets of the LLP and not that of its partners); and a legal status of a body corporate capable of suing and being sued.
Over the last few years, SSM has made substantial efforts to transform and streamline Malaysian business registration processes to online and much simpler ones, depending upon which of the above types you choose from. Though the first step invariably would be to decide on a name and place it under reservation via the SSM’s Malaysia Corporate Identity (“MyCoID”) portal.
Incorporation of Company in Malaysia under the Companies Act 2016 (for SDN BHD and BHD)
In general, there are three types of companies that can be incorporated in Malaysia – limited by shares (fee is RM1,000), limited by guarantee (fee is RM3,000), and company unlimited. All these have few common features including a name, as well as one or more members and company directors.
But the most common type is a company limited by shares. If such a limited company has at least one director who has a principal place of residence in Malaysia and one promoter, it is a private company. (or locally known as SDN BHD)
While it is a public company (or locally known as BHD), if it has at least two directors who have a principal place of residence in Malaysia and minimum one promoter.
In terms of requirements, the following information is needed to incorporate any of these companies in Malaysia:
- proposed company name
- either a private or public company
- proposed business type
- registered office address
- business address
- paid-up capital (minimum of RM1)
- details of directors(s) and promoter(s)
- declaration from directors(s) and promoter(s)
- declaration of compliance from individuals responsible for incorporation
- additional Documents (if any)
When all steps are completed, SSM issues a certificate of registration.
Do note that all companies in Malaysia must appoint a company secretary (who ordinarily has a principal place of residence in Malaysia ) within 30 days of incorporation. He or she must either be licensed by SSM, or a member of a professional organisation prescribed by the Ministry of Domestic Trade and Consumer Affairs.
Overall, company secretaries in Malaysia are tasked with ensuring that your company complies with all the regulatory requirements including taxation, keeping proper accounts and bookkeeping, passing directors’ and members’ resolutions in a timely manner, as well as setting the financial year end.
Moreover, for companies limited by shares, having a company constitution is non-mandatory.
How Can We Help
Although no matter, what type of business entity you choose to incorporate in Malaysia, be mindful of the distinctive regulatory and legal requirements – both pre- and post- incorporation, that the country imposes. This is where we can help, as InCorp Global is undoubtedly the leading corporate services provider in Singapore and South-east Asia, with over two decades of domain expertise of providing such services as a group.
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All Foreigners can now register a company in Malaysia with 100% equity depended on nature of the business. Get started with your company registration in Malaysia today.