Company Registration in Malaysia

Updated on Wednesday 25th October 2017

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If you have decided that you want to make an investment and register a company in Malaysia, you will first need to learn some basics about the country’s business structures. There are three main types of business entities available in Malaysia: sole proprietorship, partnership and limited company (Snd Bhd or Bhd).
 

Sole Proprietorship


The sole proprietorship (or sole trader) in Malaysia is, like in many other countries, a business entity that is only owned by one individual. The owner has unlimited liability which means that, if the business fails or is declared bankrupt, creditors can sue the business owner for all of the debts owed. Personal income, assets and employment income are all liable.

Registering a sole proprietorship in Malaysia has many advantages:
  • The price of company formation is very low and auditing of the Malaysian government is not required;
  • The registration process is fast, easy and it doesn’t need much paperwork or additional formalities;
  • It doesn’t require the disclosure of financial statements to the public;
  • It is easy to convert into a limited company (Snd Bhd or Bhd). 

Our lawyers in Malaysia can offer you more information regarding the necessary documents for registering a sole proprietorship.

The company registration requirements in Malaysia are also detailed in the following video:

 

Partnership in Malaysia


The partnership is a business structure that is owned by two or more persons. The Companies Commission of Malaysia states that the partnership is required to comprise at least two and a maximum of twenty members. Partnerships have many advantages and few-to-none disadvantages.

Advantages
  • They are simple and inexpensive to set up;
  • They need minimal reporting requirements;
  • They provide for shared management responsibilities;
  • They are relatively easy to dissolve;
  • A partner’s share of the business’s tax losses may be offset against other personal income;
  • Combined skills, experience and knowledge can provide a better product/service;
  • The partners are not employees. Superannuation contributions and workers’ compensation insurance are not payable from partners’ profits.
Disadvantages
  • They have a potential for disputes over sharing, business direction and administrative control;
  • They have joint and several liabilities of partners. Each partner is fully responsible for debts and liabilities incurred by other partners;
  • Changes of ownership can be difficult and they generally require establishing a new partnership.
Our attorneys in Malaysia can guide you through the process of registering a partnership.
 

Limited company (Sendirian Berhad or Berhad) in Malaysia


Sendirian Berhad (Sdn Bhd) is a private limited company that constrains invitations for the public to subscribe to any of its shares, deposit money with the company for investment or subscription. Private limited companies have a minimum of two and a maximum of fifty members.

Berhad (Bhd) is a public limited company that can offer its shares and any other forms of subscription to the public for fixed periods of time. It has a minimum amount of two shareholders and an unlimited maximum amount of shareholders.

Our Malaysian lawyers can guide you through the whole process of setting up a limited company and provide a list of necessary documents.

If you need more details about company registration in Malaysia, please contact our law office in Malaysia.

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