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One of Malaysia’s most common business structures is a limited liability company or company limited by shares. Malaysia’s limited liability company may take two primary forms: the public limited company or Berhad and the private limited company or Sendirian Berhad.

Generally, a public limited company is selected to incorporate larger business operations, whereas medium-sized companies typically choose to register a private limited company. This article guides you through what you need to know about incorporating a private limited company in Malaysia.

Legal Requirements for Setting Up a Company Limited by Shares in Malaysia

The process of private limited company registration in Malaysia is done following the Companies Act’s regulations. Below are the basic requirements for incorporating a private limited company in the country:

  • The company’s trading name should include the terms Sendirian Berhad.
  • The company must have at least two shareholders (Section 14, Companies Act).
  • The company needs to appoint at least two directors (Section 122, Companies Act).
  • The company must appoint a corporate secretary who can be represented by a person that the Companies Commission of Malaysia certified. The company secretary may also be represented by a member of a professional organisation that the Minister of Domestic Trade Cooperative and Consumerism prescribed.

    While Malaysia permits foreigners to become a shareholder, the director and corporate secretary must have a primary residence in the country, as per Section 196 of the Companies Act. The company’s director and shareholder can be the same individual, must be at least eighteen years old and not disqualified under the Companies Act 2016’s Section 298.

    When incorporating a private limited company, the business owners should prepare details on the following:

  • The company’ proposed name
  • The company’s types of business activities
  • The company’s registered office address
  • Declarations signed by the directors
    Moreover, business owners need to prepare three kinds of payments for their company incorporation, including paid-up capital, registration fee and company secretarial fee. Fortunately, the minimum paid-up capital for incorporating a private limited company is only RM 1, and the SSM only charges RM 1010 for the registration fee. The corporate secretarial fee differs from one corporate secretarial agency to another.

    Main Benefits of Setting Up a Private Company Limited by Shares

    One key advantage of establishing a private limited company is the liability protection for the shareholders; shareholders will not be completely liable for the company’s debts. Moreover, this business structure employs an easy procedure for the transfer of shares.

    The company’s statutory documents should stipulate that the maximum numbers of members are fifty. Also, the bylaws should comprise limitations about the public’s participation in the company’s share.

    Post-Registration Requirements for a Company Limited by Shares

    After completing the registration, business owners need to purchase their Certificate of Incorporation and appoint a corporate secretary within thirty days from the date of incorporation.

    The company will also need to set up a corporate bank account for the Goods and Services Tax number registration. The following are other critical matters a private limited company needs to do after registration:

  • Register for social security at SOCSO or the Social Security Organisation.
  • Register for EPF or Employees Provident Fund within seven days of hiring the first staff.
  • Set up an Annual General Meeting or AGM. A private limited company can choose to either hold or not hold an AGM. Those that choose no to hold an AGM must circulate their financial reports and statements to their members within six months from their fiscal year-end before lodgement to the Registrar.
  • Lodgement of the annual return. As per Section 68 and Section 576 of the Companies Act 2016, the company needs to submit an annual return within thirty days from the anniversary of its incorporation date. The fee for lodging an annual return in SSM for a private company is RM 150. The Registrar may strike the company off of the registrar if it fails to lodge the annual return for three or more consecutive years.
  • Filing of tax returns. A private limited company must register with the LHDN or Inland Revenue Board of Malaysia once it commenced its operations. It has to register its income tax number and PAYE or pay-as-you-earn number through the board.
  • Getting Help from a Professional Company Registration Malaysia Services

    The process of company formation in Malaysia can be complicated and daunting, particularly for start-ups. A professional company registration Malaysia services can help streamline the incorporation process and ensure the new company adheres to relevant regulatory requirement.