Establishing a company is an important step towards business development. Knowing the legal requirements to set up a private limited company or Sdn Bhd in advance will save business owners a lot of trouble when filling out the company registration form and allow them to focus their energy on making important decisions for the company.
The following are the top five things that business owners need to figure out before submitting the company registration form to help them successfully register an Sdn Bhd in Malaysia.
1. Company Business and Details
A. Proposed Company Names
According to SSM or Companies Commission of Malaysia, business owners need to propose a company name that meets the following criteria:
Total clarity is vital in naming the company. If the proposed company name contains words other than Malay and English, it is necessary to explain the meaning of these words when completing the company registration form.
B. Business Nature and Description
Business owners need to understand the type of business their company will be involved in. All Malaysian companies use MSIC codes for classification. Business owners who are not sure which category their business belongs to should consult with professional company incorporation agencies.
C. Business Address and Registered Address
Registered address and business address do not need to be similar. A business address is where the company conducts its operation, while the registered address is typically the office of the company secretary where notices and communications are handled and should be open to the public during business hours. Companies without a physical store or office do not require a business address.
2. Eligibility of Directors and Shareholders
Both Malaysians and foreigners can register as the sole director and shareholder of an Sdn Bhd as long as they are 18 years old and above, live in Malaysia and are not disqualified under Companies Act 2016’s Section 198.
Nevertheless, foreigners who do not live in Malaysia need a minimum of one resident director to register an Sdn Bhd. It is recommended to have a business partner based in the country.
An Sdn Bhd can have a maximum of fifty shareholders. During the company establishment, every shareholder will announce how many shares they have. After the company is registered and a corporate bank account is opened, every shareholder must transfer the necessary amount to the account based on the number of shares they own.
3. Documents Required
For identity verification, MyKad or passport needs to be presented as the required documentation to register an Sdn Bhd. Business owners intending to register their business through the MyCoID platform must show their MyKad or passport at the SSM counter when they first made an account on the platform.
In some cases, where the suggested company name contains controlled terms or trademarks, an authorisation letter from the appropriate agency or owner is required.
4. Paid-up Capital
The minimum paid-up capital to register an Sdn Bhd in Malaysia is RM 1. Business owners can change the paid-in capital divulged during company incorporation later on. Therefore, it is recommended to limit the capital to RM 10,000 and increase it as the company has more funds after its establishment. Declaring paid-up capital that the company does not have is illegal.
5. Necessary Payment
The SSM charges a company registration fee of RM 1,010 (including tax). Business owners that opt for a company secretary to register and establish an Sdn Bhd need to pay a service fee to complete the application form. These fees may differ based on the pricing structure of the secretarial agencies.
Getting Help From A Professional Company Incorporation Firm in Malaysia
The process of incorporation of a company in Malaysia can be complicated and taxing. A professional company incorporation services streamline the process and ensure the company stays compliant with every regulatory requirement.