Private Limited Company (Sdn. Bhd.)

1) What is company?

Company is a business vehicle regulated under the Companies Act 2016. There are three types of companies:

  • A company limited by shares
  • A company limited by guarantee
  • An unlimited company

2) What are the requirements to form a private limited company (Sdn. Bhd.) in Malaysia?

The company needs to have at least one (1) persons as the company director and fulfill the condition as below:

  • Ordinarily reside in Malaysia by having a principal place of residence in Malaysia.
  • Above 18 years of age.
  • Not an undischarged bankrupt.
  • Has not been convicted of a serious offence within the past 5 years.

3) What are the information needed to register a private limited company (Sdn. Bhd.) in Malaysia?

The information needed to register a private limited company (Sdn. Bhd.) are:

  • Copy of director identity card (I/C) or passport (for foreign director)
  • Name of the proposed company
  • Nature of business of the proposed company
  • Proposed address of the registered office (place to keep statutory documents)
  • Ordinary place of residence of every shareholder and director
  • Details of class and number of shares to be taken by every shareholder

4) How long will it take to incorporate a private limited company (Sdn. Bhd.) in Malaysia?

The company can normally be set up within three (3) to ten (10) working days.

5) What are the procedures to incorporate a private limited company (Sdn. Bhd.) in Malaysia?

There are basically three (3) stages to incorporate a private limited company (Sdn. Bhd.) in Malaysia: 1st stage, Obtain proposed name approval from Companies Commission of Malaysia (SSM). Normally SSM will take few hours to two (2) working days to reply on the request. There will be three kinds of result:

  • Copy of director identity card (I/C) or passport (for foreign director)
  • Name of the proposed company
  • Nature of business of the proposed company
  • Proposed address of the registered office (place to keep statutory documents)
  • Ordinary place of residence of every shareholder and director
  • Details of class and number of shares to be taken by every shareholder

2nd stage, as the name search approval is obtained, we will prepare the documents to be signed by the shareholders and directors in Johor, Malaysia. This process can be done within few hours to few working days and depends on the actual appointment timing between the company secretary, shareholders and directors. The full payment for incorporation is required to be fully settled before proceeds to next stage.

3rd stage, as all the documents are signed, we will submit to the relevant government agencies (e.g. Companies Commission of Malaysia) to proceed stamping and submission. Normally SSM will take one (1) to five (5) working days to issue the incorporation certificate (Section 17). The company has successfully incorporated once the certificate was issued by SSM.

6) Can foreigner incorporate a private limited company (Sdn. Bhd.) in Malaysia without Malaysian involvement? Can they hold 100% shares in that private limited company Sdn. Bhd.)?

Yes. Foreigners can set up a 100% foreign holding company in Malaysia without Malaysian involved. However please take note that according to Companies Act 2016 Section 196, every company shall have at least one (1) director (He can be Malaysian or foreigner), who shall ordinarily reside in Malaysia by having a principal place of residence in Malaysia.

7) How much is the yearly maintenance fee of a private limited company (Sdn. Bhd.)?

The maintenance fees of a dormant private limited company should be at the range of RM2,000.00 to RM3,000.00 (Include audit fee and secretary fee). If the company is active during the year, the compliance cost that the company need to pay to maintain the legal status inclusive of:

  • Audit Fees
  • Tax Agent Fees
  • Company Secretary Fees

8) What is the major different between sole proprietor / partnership and private limited company (Sdn. Bhd.)

The major different is the liability to creditors. The liability of the shareholders of the private limited company (Sdn. Bhd.) to creditors is limited to capital originally invested while sole proprietorship/partnership have unlimited liability to their creditors. Private limited company (Sdn. Bhd.) is a legal entity, it will not be terminated in the case of changes in shareholders or directors.

9) Can I determine the date of incorporation for a private limited company (Sdn. Bhd.)?

Some business owners may request their private limited company to be registered at certain date due to personal favor, fengshui, or private reason. However, due to the various type of unforeseen factors from Companies Commission of Malaysia (SSM) such as staff absenteeism, online system corruption and etc, we are not able to determine the date of incorporation of the new private limited company.

10) Can a private limited company (Sdn. Bhd.) shares hold by another company (e.g. holding company)?

Yes, but please take note that the holding company must pass a directors’ resolution to confirm their purchases on the subsidiary shares.

11) When shall a private limited company (Sdn. Bhd.) submit its annual return?

A private limited company shall lodge with Companies Commission of Malaysia (SSM) an annual return for each calendar year not later than thirty days from the anniversary of its incorporation date.

12) When shall a private limited company (Sdn. Bhd.) prepared its audited report?

A private limited company (Sdn. Bhd.) shall prepare audited report within eighteen months from the date of its incorporation; and subsequently, within six months from its financial year end.

13) What is the minimum share (paid up capital) of private limited company (Sdn. Bhd.)?

There is no minimum paid in capital requirement upon incorporation of a company under the Companies Act 2016.

14) How can I terminate a private limited company (Sdn. Bhd.)?

A private limited company (Sdn. Bhd.) can be terminated by the following methods:

  • Voluntary winding up
  • Strike off under Section 549 of Companies Act 2016
  • Winding up by court order

15) Can I set up / incorporate private limited company (Sdn. Bhd.) myself?

Under Section 235 of Companies Act 2016, every company shall have one or more secretaries. Therefore, we suggest you engage our services directly, this will save your time and effort.

16) Who shall set up a private limited company (Sdn. Bhd.)?

  • Business with high risk
  • Business involved many investors
  • Foreigners
  • Long-lasting business