If you are interested to know how to register a (LLC in Malaysia) Limited Liability Company in Malaysia , you will be glad to know that in terms of ease of doing business, Malaysia ranks fourth in Asia according to the World Bank Group’s most recent ‘Doing Business’ report. Malaysia’s economy has thrived in recent years and the country is bench marked by business pundits for its first-rate infrastructure, efficient banking system and financial services sector, proficient and multi-lingual work force, while the compliance and reporting standards are extremely helpful for setting up a business in this country.
The one-stop solution for you when you want to register a business in Malaysia is conveniently provided by the Companies Commission of Malaysia (SSM). Not only is the Commission the sole authority to incorporate companies and control businesses, it offers the general public all information regarding companies and businesses in Malaysia.
In case you have already made up your mind, you should be aware of the fact that the most common types of business that you can register in Malaysia are the Sole Proprietorship, Partnership and Sendirian Berhad or Private Limited Liability Company in Malaysia.
By definition, if your business is totally owned by a single person who uses his or her personal name according to his or her identity card or trade name, it will be classified as a sole proprietorship business. In the case of partnership, the business can be owned by two or more individuals but cannot exceed twenty persons. Furthermore, in a partnership you cannot use the identity card name as a business name.
Sendirian Berhad or Private Limited Liability Company (LLC in Malaysia) limited by shares. Therefore, the nominal value of the shares a person holds will define his or her personal liability in such a company. It must have a minimum of two subscribers to the shares of the company and a minimum of two directors by law. The provisions of the Companies Act 1965 deal exclusively with the prerequisites for registering a company limited by shares in Malaysia. A private limited liability company in Malaysia, is the general public is not permitted to own the shares of the company.
You can register your sole proprietorship or partnership business using personal name or a trade name. If the business name is your personal name as mentioned in the identity card, then you do not need to apply for a business name. The trade name will be the name of the proposed business and you must attain prior approval from the Registrar of Business. Next you have to complete the business registration form and provide the basic information as required.
Remember, each and every business owner and partners must sign the completed form. Additionally, the owner or all partners must be present at the counter for registration. You will need to attach supplementary documents like a permit, license or supporting letter for the type of business as well as the approval or supporting letter from the appropriate agency if needed by the Registrar of Business.
According to Malaysia’s business law, owner or partners must be a Malaysian citizen or permanent resident of the country. Proprietor or partners must be aged 18 years and above. Application can only be submitted by the owner or partners of the business.
The registration fee for a sole proprietorship using a personal name as mentioned in the identity card is RM 30. For a sole proprietorship or partnership that uses a trade name, the registration fee is RM 60. For registration of branches, you will need to pay RM 5 for each branch. And for business information, the fee is stipulated at RM 10 only.
The general guideline states that you have to register the business not later than thirty (30) days from the date of opening of business. A new business registration will be valid for a period of one (1) year and cannot go beyond five (5) years on each registration. As a note of caution, the nature of your registered business should not breach any laws or likely to be used for illegal means or any purpose detrimental to or incompatible with the security of the Federation, ethics or public order.
You can obtain the business registration certificate within one (1) hour after the payment transaction is completed as set up LLC in Malaysia (Limited Liability Company in Malaysia). If you are found running a business with no registration, you will be charged under the ROBA 1956. In case you are proved guilty, you will be fined not more than RM 50,000 or face imprisonment for a term not exceeding two (2) years or both. Even if the business has been registered with SSM, it is the responsibility of the business owners to attain the necessary licenses, permits or approval letters from the relevant authorities to run the business in Malaysia.
When you have to update any particular amendment to your business, you have to notify the Registrar within thirty (30) days from the date of changes by completing the prescribed form. In case you have to change your business address, business type, details of branches or information of owner or partner, you will need to submit the completed form according to the types of changes. For this matter do refer to the guidelines for changes in Business Particulars. The owner or one of the partners can notify the Registrar of any change in business address, business type and details of branches while all the partners need to notify the changes of information of owner or partners of the business.
For any business update fee, you will need to pay RM 20 and RM 5 per year for each branch. The fee for changes in business information is RM 10. You can attain the business registration certificate within one (1) hour after the payment is completed.
When you intend to register a company limited by shares in Malaysia, you must bear in mind that the business form must be up to the standards spelled out in the Companies Act 1965. Your company’s trading name must have the words “Sendirian Berhad” SDN BHD Malaysia Company since you are applying for a private limited liability company in Malaysia.
The prerequisites of registering a company limited by shares state that: your company is obliged to have a minimum of two shareholders as specified in the Section 14 of the Companies Act. As per Section 122 of the Companies Act, you must appoint a minimum of two directors for your company. It is mandatory on your part to employ a company secretary and that person must be approved by the Companies Commission of Malaysia or SSM. A member of a professional body can also be your company secretary if only the body is approved by the Minister of Domestic Trade Cooperative and Consumerism.
The fundamental requirement for incorporating a private Limited Liability Company in Malaysia under the Companies Act 2016 states that at least a single director and a promoter’s main place of residence must be in Malaysia and should generally live in the country.
In order to take the incorporation process ahead, you will need your company’s name approved from SSM. You can use the direct incorporation or name reservation method for this purpose.
LLC in Malaysia
The incorporation information (LLC in Malaysia) you are required to submit to the SSM must contain the points outlined below:
- i) The proposed company name
ii) The status of a private company
iii) The proposed type of business
iv) The address of registered office
v) The business address
vi) Complete details of directors(s) and promoter(s)
vii) Declaration from directors(s) and promoter(s)
viii) Declaration of compliance from individuals responsible for incorporation
ix) Additional Documents (if any)
Lastly, you have to pay the registration fee of RM 1,000 to the SSM to complete the incorporation process of your private limited liability company.
Upon the completion of the incorporation process, it is essential for you to open a business bank account and register with the appropriate authorities in Malaysia. It is obligatory for you to file for registration of your employee’s retirement fund, human resource developing and training as well as social security. You will need to set up your company’s Annual General Meeting (AGM) according to the type of company you have incorporated with the SSM. The annual return must be submitted not later than 30 days from the anniversary of the registration date of your company. For the purpose of filing tax returns, you will need to register your company with the Inland Revenue Board when your business is up and running.
In case you have to update your company’s information like a change of address or shares, you will need to follow the procedure stipulated by the SSM. For this purpose, you will be greatly aided by the range of services provided by MyCoID 2016. The updating of information can be carried out at the SSM headquarters in Kuala Lumpur, its state or branch offices around the country.
The main reason why private limited liability company in Malaysia (LLC in Malaysia) is that the shareholders are protected from the liabilities and are not completely accountable for the debts accrued by the companies. Secondly, the transfer of shares is a relatively simple process in Malaysia when such companies seek to bring in new shareholders. The ownership of the business can be transferred to your spouse or can be sold to a third party if needed.
Before you start your own business in Malaysia, it would be highly prudent on your part to spend some time getting to know the country and its people. The sooner you can make contacts and friends, talk to locals and foreigners, you will realize the available options that are suited for you, given the skills, products and services you can offer. The more you know about Malaysia, you will not only be able to make better choices but also avoid the difficulties of doing business in this vibrant country.