Note: This guide provides an overview of the main points in simplified form, with some details omitted. For practical application, a more in-depth understanding of the law is required. Please consult us separately for further advice.
What is a Company?
A company is a business entity with legal personality registered under the Companies Act 2016 of Malaysia.
Typically, company names end with “Sdn. Bhd.” (Private Limited Company) or “Berhad” (Bhd.) (Public Limited Company).
Types of Companies
1. Private Company (Sendirian Berhad, Sdn. Bhd.)
- Maximum of 50 shareholders.
- Transfer of shares is restricted.
- Public fundraising is not permitted.
- The vast majority of companies incorporated in Malaysia are Sdn. Bhd.
2. Public Company (Berhad, Bhd.)
- No limit on the number of shareholders.
- May issue shares and debentures through the stock exchange.
- If raising funds via public offering, a prospectus must be submitted to and approved by the Securities Commission (SC).
Incorporation Procedures
To operate a business in Malaysia, a company must first be registered with the Companies Commission of Malaysia (SSM: Suruhanjaya Syarikat Malaysia).
1. Company Name Reservation
- Apply via SSM’s MyCoID system and obtain approval.
- Names that are inappropriate, against public policy, or similar to existing companies are not permitted.
2. Constitution
- Submission is optional.
- If the company does not adopt its own Constitution, the provisions of the Companies Act automatically apply.
3. Registration Application
- Submit details of directors and shareholders, and pay registration fees.
- Registration is usually completed within 1–3 business days if documents are in order.
Directors
- A minimum of one director is required.
- Directors must be at least 18 years old, and individuals who are bankrupt or convicted of fraud are disqualified.
- At least one director must be a resident in Malaysia (ordinarily residing).
Company Secretary
- Must be appointed within 30 days of incorporation.
- Must be a licensed individual registered with SSM and a resident in Malaysia.
- In companies with only one director, the director cannot also act as the company secretary.
Registered Office
- A company must maintain a registered office in Malaysia where documents are accessible during normal business hours.
- Any change of address must be notified to SSM within 14 days.
Auditor
- An auditor must be appointed within 30 days of incorporation.
- However, an exemption applies to Small Companies, defined as meeting at least two of the following criteria:
- Annual revenue of RM500,000 or less
- Total assets of RM500,000 or less
- No more than 20 employees
Annual Filings and Compliance
- Listed companies have additional reporting obligations to the stock exchange and Securities Commission.
- All companies must file an Annual Return with SSM within 30 days of the anniversary of incorporation.
- Financial Statements must be presented to shareholders within 7 months of the financial year-end and submitted to SSM when required.