Different Business Entities in Malaysia
There are different business entities to choose from in Malaysia: sole proprietorship, limited liability partnership, private limited company and public limited company.
Sole proprietorship is put up by one individual owner or a sole entrepreneur. A sole proprietor incurs unlimited liability, which means that debts are personally chargeable against the owner.
Limited liability partnership (LLP) is a hybrid between a private limited company and a sole proprietorship. Partners possess a separate and distinct personality from the partnership and as a rule, will not be liable for obligations incurred by the partnership unless they commit a tortious act.
Private limited company, also known as Sendirian Berhad (Sdn Bhd) is the most common corporate entity in Malaysia.
The Companies Act vests a company with a juridical personality that is separate and distinct from its directors and shareholders. If a company fails to meet its liabilities, the latter cannot be charged against the owners/shareholders’ personal assets. As a rule, personal assets cannot be made to answer for corporate debts.
As a legal person, a company can also exercise numerous powers. It can enter into contracts, sue other persons and be sued and acquire, own, hold and dispose properties.
Transferability of shares is another unique feature of a company. A shareholder may sell his shares to any person without restriction. Share transfers, however, must be divulged to the directors, including details on company name, transferor’s name, transferee’s name, number of shares and their corresponding value.
A private limited company also permits 100% foreign ownership. The government encourages full foreign equity among corporate entities in industries such as education, oil and gas, agriculture, banking and finance and tourism.
Requirements of Company Registration in Malaysia
We can prepare everything you need for a smooth, hassle-free company registration. Our company registration specialists work with clients before, during, and after the set-up of their company.
- In preparation for your business registration, the following requirements must be complied with:
- Minimum of one shareholder
- Minimum paid up capital of at least RM1
- Appointment of a qualified secretary
A corporate secretary must be a resident of Malaysia who is a duly licensed professional with membership under a professional body prescribed by the Ministry of Domestic Trade, Cooperative and Consumerism. A licensed secretary, chartered accountant, chartered secretary or lawyer is eligible to perform the duties of a corporate secretary.
- Nomination of at least two company promoters who are residents of Malaysia
- Completion of the Incorporation form, including preparation of Form 13A (Request for Availability of Name) and its submission to the Companies Commission
The following registration information must be submitted to the Companies Commission:
- Proposed company names
- Nature of business
- Description of business activities
- Registered business address
- Personal information of directors and promoters, including their NRIC/passport
- Source of funding
- Paid up capital
- Additional Documents required
- Company name reservation
Each name application requires a fee of RM30. Under the Companies Act, the Minister of Domestic Trade and Consumer Affairs or the Registrar of Companies must first approve the application of company name prior to registration. Any undesirable name or name that is misleading, offensive or identical to an existing company name, for instance, will not be approved. The process usually takes 24 hours.
- Submission of registration documents with the Companies Commission
- Constitution, also known as the Memorandum and Articles of Association
- Statutory Declaration by a Director or Promoter Before Appointment (Form 48A)
- Declaration of Compliance (Form 6)
Within three (3) months from the approval of company name, registration documents must be prepared and submitted to the Companies Commission:
The Constitution outlines the internal rules governing the relationship between the company and its shareholders and directors, with specific provisions on responsibilities, powers, duties, allotment and transfer of shares, dividends payment, removal, election, removal of appointment of directors, quorum and conduct of meetings.
The promoter or director declares on oath that he/she is not a bankrupt and she has not been convicted or imprisoned for prescribed offences.
This declaration, signed by the corporate secretary who handled the registration, contains a statement that all requirements of the Companies Act have been complied with.
- Payment of Registration Fees
Under the new Companies Act, a registration fee of RM1,000 is payable to SSM for each application for company registration in Malaysia.
- Issuance of Certificate of Incorporation
If the application is complete and registration fees have been settled, the Companies Commission will issue a Certificate of incorporation
Register your Company in Malaysia with Bestar Consulting
We simplifies the intricate company registration procedures into a simple, hassle-free process. Our team of highly qualified company formation specialists take care of every detail of company registration, while helping you staying compliant with statutory requirements and regulations.
Our company registration package includes the following:
- Approval letter for utilizing company name
- Name reservation with the Companies Commission
- Registration fee amounting to RM1,000 payable to the Companies Commission
- Free certificate of incorporation
- Free name tag
- Free OCBC bank account opening in Malaysia
- Free advisory services
- Free incorporation consulting
- No lock & No exit periods
- Preparation of your First Board of Director’s meeting
Attractive Company Registration Package
Our cost-effective company registration packages have transparent pricing structures, so you know exactly what services you’re paying for. We primarily offer two different packages for local and foreign clientele.
Local Entrepreneur Package
- Package: RM2,000 (subjected to 6% service tax)
- Tax planning, GST advice, scanning letter services, and Monitoring of files: Free of charge.
- Name search: You can have unlimited options for name search before you apply for reservation. Make sure your preferred name is relevant to your company or business.
- Name reservation: It costs RM50 per name and is available only 2 times after the registration.
- Directors, Shareholders, & Beneficial Owners fees: Free of charge for the first 3. If there are more than 3, it costs RM100 each.
- Paid-up Capital: The paid-up capital should be a minimum of RM1 – RM1,000.
- Bank account opening: It is free up to 2 accounts opening. In excess of the first two accounts, you will be charged RM150 per additional bank account.
- Certified copies of incorporation documents: Two sets will be provided to you, free of charge. Each additional set costs RM30.
- Annual company secretarial package: Included at first, later, you have to pay RM1,000 per year to continue the services.
- Domain name registration of company website: Free of charge
Foreign Entrepreneur Package
- Includes everything in Local Entrepreneur Package
- Package: RM7,000 (subjected to 6% service tax)
- Nominee director services: For foreign entrepreneurs, it is necessary to appoint a nominee director to meet the requirement under the Companies Act that you must have at least one resident director in Malaysia
- Refundable security deposit: A refundable security deposit of RM5,000 applies.
Why set up a company in Malaysia?
Over the years, Malaysia has emerged as an ideal business hub in Asia. Its fast-growing economy and business-friendly climate has spurred entrepreneurial activity among domestic and foreign enterprises. Malaysia has improved its ease of doing business score, with its pro-business policies, favorable tax schemes, and straightforward statutory frameworks.
Bestar Consulting provides expert advice and assistance throughout the company formation process, so you can rest at ease about endless paperwork, bureaucratic red-tape, and long waiting times.
FAQs for “Company Registration”
The first step to registering a company in Malaysia is to decide on a business structure. Common types of company in Malaysia include sole proprietorship, partnership, private limited company and limited liability partnership.
Applicants need to brainstorm for a unique company name. If they use their name as per MYKAD or MYPR as their business name, they need to complete Form A and pay a registration fee of RM 30. The business information fee is RM10. However, they can only register for a sole proprietorship.
If the applicants use a trade name as their company name, they need to submit Form PNA.42 along with a complete Form A. The registration fee will be RM 60, whereas the business info fee will be RM 10. The applicants can register at any Companies Commission of Malaysia or SSM counter or online through the ezBiz online platform.
Applicants must prepare the registration documents and submit them to SSM within one month of getting their proposed company name approved. Upon successful submission, applicants will receive a certificate of registration issued by the SSM.
It is mandatory to register your company with the SSM. Conducting unregistered business without a valid Business Registration Certificate is considered an offence punishable by fine or imprisonment. Therefore, no matter how small a business is, it is advisable to register it with the SSM before commencing its operations.
At least one shareholder, a director and a qualified company secretary must register a private limited company in Malaysia. Both the director and corporate secretary must ordinarily reside and have a principal residence place in the country. A natural person can serve as both the director and shareholder, whereas a corporate legal entity can only become a shareholder.
To register a private limited company, applicants need to complete the following process:
- Filing of name search application to the SSM.
- Filing of incorporation documents with the approved proposed company name with the SSM within thirty days from the name search application’s lodgment date.
The SSM will issue a Certificate of Incorporation to the successful applicants upon compliance with the incorporation process and submission of the duly completed incorporation documentation.
Under the new Companies Act 2016, every application for company incorporation or company registration online in Malaysia requires a flat registration fee of RM 1,000 paid to SSM.
A company registration number is a set of numbers utilised to identify a company. Business owners can obtain a company registration number by registering their company with the SSM. This number will be unique to the company it is registered to and will be printed on the certification of incorporation of the company.
Foreigners can set up a business in Malaysia either by incorporating a local company or register a company with the SSM. Registration documents they need to lodge with the SSM include:
- The certificate of incorporation’s certified copy
- The foreign company’s registration’s certified copy
- The foreign company’s charter’s certified copy
- The foreign company’s Memorandum and Articles Association’s certified copy, along with other documents specifying its constitution
- Form 79 and Form 80
- Form 13A’s original copy
- A copy of the company name approval issued by SSM
- Power of attorney or memorandum of appointment
- A certified translated copy of any documents written in a non-Malay language
Registering a business with the SSM generally takes about twenty-four hours. The documents’ preparation and registration take around two to three business days, while the documents signing by all directors and shareholders take about one business day. Documents submission to the SSM and waiting for the approval usually takes around three to five business days.