What are the requirements to form Sdn. Bhd. Company in Malaysia?

22 Feb 2023

In Malaysia, the requirements to form a company depend on the type of company you wish to establish. Generally, there are two types of companies in Malaysia: a Private Limited Company (Sdn. Bhd.) and a Public Limited Company (Berhad).

Here are the general requirements for setup a Private Limited Company (Sdn. Bhd.) in Malaysia:

1. Paid-up Capital

  • a minimum paid-up capital of RM1 only

2. Shareholders

  • a minimum of one (1) shareholder is required, and there is no limit to the maximum number of shareholders.

3. Directors

  • a minimum of one (1) director who is at least 18 years of age and are residing in Malaysia. He/she is not a bankrupt and has not been convicted and imprisoned for a period of the past 5 years.

4. Company Secretary

  • appoint a Company Secretary (the Company Secretary must be a member of any one of the prescribed professional bodies or licensed by the SSM).

5.  Registered Office

  • must have a registered office in Malaysia to which all communications and notices may be addressed. It is normal practice in Malaysia to have the secretarial office as the registered office.
 

What are the information required to register a Private Limited Company ( Sdn. Bhd.) in Malaysia?

These are the information required to register a private limited company (Sdn Bhd):

1. Copy of the Director’s passport or IC (Identification Card) or
Shareholder passport or IC (Identification Card)

2. Director/Shareholder’s residential address

3. Director/Shareholder’s race

4. Director/Shareholder’s email

5.  Business address (if applicable)

6. Paid-up capital

7. Share percentage breakdown of Shareholders (if there is more than 1 shareholder)

8. Business nature of the proposed company

9. Proposed Company name

What are the advantages of Private Limited Company ( Sdn. Bhd.) ?

In Malaysia, a private limited company is the main type of business entity due to its separate legal identity, which distinguishes it from a sole proprietorship.

Separate Legal Entity

  • The financial responsibility of the owners is restricted to the amount of their personal investment in the company.
  • Company’s assets are separate from the owner’s personal assets.
  • If the private limited company fails to meet its liabilities, creditors will not be allowed to pursue the owners’ personal assets.

Company can own a property

  • Sdn Bhd company can purchase assets such as buildings, land, vehicles, and more under its name.

Easy Transferability

  • It is simple to purchase or sell, transfer existing shares or issue additional shares to new investors.

Perpetual Succession

  • It will only cease to exist once it is legally dissolved.
  • The withdrawal of any shareholders will not affect the existence of the company.

Borrowing Capacity

  • Can open a bank account and select a loan package that the banker has to offer in its own name.

Lower Income Tax Rate

  • Taxed at low corporate tax rates.
  • Tax incentives such as inventor status, investment tax allowance, SME Digitalisation Grant Schemes, and Automation grants are normally offered to private limited companies (Sdn. Bhd.).
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