Private limited company in Malaysia - Registering an Sdn Bhd

Malaysia is a prime spot among Southeast Asian nation that promotes fabulous business opportunities for natives as well as international investors. Every year thousands of investors gather in this country to make corporate fortunes. When considering setting up a company, an investor has multiple choices before them.

Malaysia allows various company options, but among them sole proprietorship, partnership and the finally private limited company also known as LLC or in Malay term SDN BHD are popular.

Here in this article, we will learn about Private limited company in Malaysia, how one can register this type of company and the main advantages of establishing a SDN BHD in this country. So with no more delay let’s dive into it.

What is a Private Limited company or SDN BHD in Malaysia?

Private Limited company also refer as Limited liability Company (LLC) or in Malay Sendirian Berhad (Sdn Bhd) is the most popular type of company formation in Malaysia. This type of company has its separate entity beside its owners. This mean the company itself acts like an individual person that has the legal right to purchase or sell belongings, sue other companies or individual and even can be sued for any liabilities and debts.

Such a business entity is well secured in case of loss or liability period. Owner’s assets and finance is well separated from that of company asset.

Furthermore, it is the most reliable and stable business formation in Malaysia. Almost half of the total corporate individuals choose to invest in a private limited company in Malaysia. This is because the company structure and facilities are much more favorable for entrepreneurs.

Advantages of setting up a Private Limited company in Malaysia

There are several advantages that make a private limited company or LLC in Malaysia so popular among Malaysian investors. Below are some of the main advantages highlighted for your convenience:

  • Company owners are partially liable for any company debts. This debt doesn’t surpass business capital, that is, the debt doesn’t fall on owner’s personal asset.
  • Share capital can be increased without any bindings or restrictions.
  • The share can be transferred easily
  • If a shareholder dies or quit the managing board, that doesn’t costs affect on the business continuity.
  • A LLC or Private Limited company is a separate legal entity.
  • When setting up a SDN BHD, issuing for bank loan is much easier
  • Such company setup has various income tax plans that can save extra money in business.

Private limited company registration process in Malaysia

As mentioned earlier, private limited company or SDN BHD is one of the most popular company structures. This formation however follows several governmental steps before an individual can own a LLC. There are several registration procedures an owner must carry out to validate and run a private limited company in Malaysia. Below we will see the registration steps for incorporating a Private Limited company in Malaysia:

Trade name registration

Once an entrepreneur has determined to set a LLC company in Malaysia, the very first task he/she must carry out is setting a company name. A trade name is mandatory and must be fixed and approved when registering a business. During the relevant procedure, the owner needs to propose more than one name. The SSM will check and verify the name availability. In this case SSM may also suggest trade names for the convenience. This SSM will also accept company registration form submission. The company name approval might take 1 to 2 working days and a fee of RM 60.

Recruiting a company secretary

Next task is to hire a company secretary. It is compulsory to recruit a company secretary as soon as you proceed for the registration submission and this recruitment has to be done within 30 days of registration commencement. The recruited secretary will be responsible to draft of MoA, AoA, and all required registration forms. This staff is also responsible for statutory and company resolution meetings. Last but the least, along with other responsibilities, he/she will also carry out the annual return submission process to CCM and also work on company shares and documents management.

Submit the paid up capital

Once the trade name is proposed and company secretary is recruited, the next procedure should be setting up the company paid up capitals. This should be RM 5000 in minimum. You can later on increase this amount according to your company needs and expansions. The company secretary along with the board of directors can set meetings regarding fixing the paid up capital amount for the new company.

Super form draft and submission

This is the process you should carry out along with the company naming process. The company registration form need to be collected, filled up as recommended or instructed and finally has to be submitted to the nearest SSM counter. If all documents are up to the mark, you should get your incorporation certificate within 2 working days of form submission.

Company secretary can also buy the super form from mydata SSM and carry out the same registration process as a representative of the company owners. During this time the secretary will also be responsible for arranging board resolution meeting and will also keep an eye on the company status through ESD and take necessary actions if needed.

Pay the government fees

Once registration form is submitted to the SSM counter along with other necessary documents, it will be also mandatory for the submitter to pay government fees, which is RM 1010 to the designated counter in SSM. This is the government fees for registering a private limited company in Malaysia.

Open bank account

During the whole company registration process, the owner must open a business account in a bank in Malaysia. This should be a corporate bank account and must be in company’s name.  To open a business bank account it is advisable to choose an international bank like HSBC, UOB, OCBC, Standard Chartered bank etc for fast services.

Arrange business premises

This is an important step in company registration process. The government of Malaysia and corporate law here make sure that a Private limited company owner ensures proper business premises for work and production. For this, the owner needs to make a tenancy agreement during commercial premises allotment. The agreement should be valid for at least 12 months after signup.

Arrange all necessary business licenses

Once company registration certificate is in hand, the way to setup the company in Malaysia is almost clear. However, it is necessary to collect few licenses to carry out business under legal terms and condition of a particular area an entrepreneur set the business in. The need of the license varies according to the type of private limited company. Few businesses may ask for medical license, some requires license for legal sell and purchases and so on. In general Premises license, Halal license and signboard license are mandatory to run general businesses.

Get your passport and visa validated for work

The final step of LLC registration process is to apply for employment passport. Well, this is necessary for any other company setup process available here. You must have to have a work permit in this country to set a private limited company in Malaysia. This is also necessary as permission from embassy will make you eligible to hire foreign staffs for your company. Once the work approval is achieved, the LLC Company is finally ready to run the commercial activities in Malaysia with all the legal and governmental compliances at its favor.

FAQ on private limited company

What are the steps of setting up a private limited company in Sri Lanka?

The steps are:

  • Collect required form for trade name proposal and company registration from SSM
  • Hire company secretary
  • Fill up form according to the instructions
  • Submit paid up capital
  • submit forms to the SSM and pay the government fees along with all recommended documents
  • Open business bank account
  • Get tenancy agreement certificate for ensuring business premises
  • Get necessary licenses recommended for your company

What are some renowned examples of Private limited company in Malaysia?

Among many, these are some world renowned private limited company running their business in Malaysia:

  • Facebook
  • IKEA
  • Royal bank Canada
  • Brookfield Asset Management.
  • Mars
  • Bank of Montreal  
  • TD bank and many more.

What are the popular business types other than Private limited company in Malaysia?

Other popular business entities in Malaysia are:

  • Sole proprietorship
  • Partnership Company
  • Public limited company or Berhad
  • Limited Liability Partnership

What is the government charge to set up a company in Malaysia?

To register a private limited company or LLC in Malaysia you need to draft and submit the registration form to the SSM under the companies ACT 2016. The government charges RM 1010 for this verification and approval services. This must be paid whether an applicant register the form through the SSM counter or via online means.

Related Articles:

Limited Liability Partnership in Malaysia – LLP Company

Public limited company in Malaysia – Berhad (BHD)

Sole Proprietorship Malaysia – Comparing with SDN BHD

Sdn Bhd Vs Enterprise meaning and difference


Company Registration Expert Since 2012