Company Incorporation

Incorporation of Private Limited Company

The most common company structure in Malaysia is a private company incorporated as a company limited by shares (identified through the words "Sendirian Berhad" or "Sdn. Bhd." as part of the company's name).

A company limited by shares is a company formed on the principle that the members' liability is limited to the amount, if any, unpaid on the shares taken up by them.

To set up a company in Malaysia, the following conditions must be met:

1. Company shall have name;

2. One or more shares;

3. Provide a minimum paid-up capital of RM1;

4. At least one subscriber to the company shares; and

5. At least one director (aged 18, living in Malaysia).

The limits of the number of members of a private company is 50.

A company remains as a private company if it:

1. Restricts the right to transfer its shares

2. Limits the number of its members to 50, excluding employees in the employment of the company or its subsidiary and some former employees of the company or its subsidiary

3. Prohibits any invitation to the public to subscribe for its shares and debentures

4. Prohibits any invitation to the public to deposit money with the company for fixed periods of payable at call, whether interest-bearing or interest-free.

A private company can be converted into a public company.

Incorporation Information Needed

Information required to incorporate a company is as follows:

• The proposed name of the company

The name of the company shall appear in legible Romanized letters, together with the company number, on its seal, official documents, publications and website, if any.

• The nature of business of the proposed company

• The proposed address of registered office

A company must maintain a registered office in Malaysia where all books and documents required under the provisions of the Act are kept.

• The business address

• The name, identification, nationality and ordinary place of residence of the member of the company

• The details of class and number of shares to be taken by a member

• The name, identification, nationality and ordinary place of residence of every person who is to be the director and promoter

The basic requirements to incorporate a private company (Sdn. Bhd.) are at least one (1) director who ordinarily resides in Malaysia by having a principal place of residence in Malaysia and minimum of one (1) promoter.

In addition, a private company is required to have at least one director. Each of the minimum director(s) must have his principal or only place of residence within Malaysia. The minimum age of a director is 18 years and there is no specified maximum age. A director of the company need not necessarily be a shareholder of the company.

• Declaration from the director(s) or promoter(s) that he/she:

➢ is not an undischarged bankrupt either in or outside Malaysia; and

➢ has not been convicted of any offence whether in or outside Malaysia

Additional Document(s)

(i) a copy of consent letter from the corporate body named as the member of the company.

(ii) a copy of certificate of director’s qualification, if required.

(iii) a consent letter from relevant agency, if any.

Declaration of Compliance from Individuals Responsible for Incorporation

This declaration states that the applicant has complied with all requirements of the Companies Act 2016. The declaration should be made by the individual who is responsible for the incorporation.

Verification of Incorporation

Once the Registrar is satisfied that all information provided is complete and complied with the required procedures—

1. a notice of approval and registration will be emailed to the applicant; and

2. a certificate of incorporation will only be issued by SSM upon request together with the prescribed fee.

The notice serves as conclusive evidence that the requirements in respect of registration and matters precedent and incidental to the registration have been complied with.

Incorporation of a company may be approved within 1 day.

Incorporation Fee

(i) Direct incorporation (application for the name and incorporation of a company) RM1,000;

or

(ii) Separate name reservation and incorporation of company RM1,050.

The approved name is reserved for 30 days or any longer date as allowed by the Registrar (maximum 180 days) from the date of approval.

Requirements of a Company

A company secretary must be appointed within 30 days after the incorporation of the company. The secretary shall be licensed by the Registrar of Companies and possess a valid practising certificate issued by SSM. The secretary of a company must be a natural person of full age who has his principal or only place of residence in Malaysia.

The company must also appoint an approved company auditor to be the company auditor in Malaysia.

Company's constitution is a non-mandatory option for company limited by share. If required by the company, it may file the constitution of the company after the incorporation of the company.

A company cannot deal with its own shares or hold shares in its holding company. A holder of a share has the right to vote on a show of hands on any resolution of a company at a general meeting. In a case of a poll, each equity share of a company carries the right to one vote.

Once incorporated, the company is advised to obtain the necessary license / permit / approval from the relevant authorities before commencing business.

Bestar processes and registers a complete application in a speedy and efficient manner within days. If you would like to know more, please contact Bestar.

Company Incorporation | Bestar