Malaysia has the most common type of business entity, the Private Limited Company or Sendirian Berhad. You may have thought about registering a SDN Bhd. If you have been considering starting a business.
There are six things that you need to consider when it comes to SDN Bhd registration in Malaysia:
Table of Contents
Company Names
When deciding on the name of a company, business owners should pay attention to the rules and regulations. Suhanjaya Syarikat Malaysia (SSM) has established the following company naming criteria:
- In addition, it should not be offensive, misleading, or blasphemous.
- Neither the Royal families nor the government authorities should be associated with the site.
- The company nature should not be misunderstood.
- There should not be any resemblances to other registered companies.
- Any government-controlled activity, such as insurance, should not be mentioned unless it has been approved by the relevant authority.
Every company’s name plays a significant role in its success, and it is therefore imperative that you carefully choose a name that will be appropriate for your business. Your incorporation form should contain all relevant information.
The Nature of the Business
Based on the Malaysia Standard Industrial Classification (MSIC) codes, companies are classified according to their type of business. SSM requires that the company’s registration mentions the type of business nature it will employ, as well as the appropriate MSIC code.
You have the option of selecting from hundreds of MSIC codes, so it is highly recommended that you consult and engage a licensed and qualified secretary of your company to handle the process on your behalf.
Business Address
A business address, if any, must be disclosed when registering a Sdn Bhd in Malaysia. Business addresses are generally addresses where business activities are conducted. In any case, the company can update SSM at a later date if your business address is not yet available.
Shareholders and Directors of the Company
Several factors affect the success of a Sdn Bhd company in Malaysia, including its directors and shareholders. As a Malaysian company registrant, you should check whether any director or shareholder meets the law’s eligibility requirements. A Malaysian company director must meet the following qualifications:
- Sdn Bhd companies in Malaysia can be managed by Malaysians and foreigners equally.
- At least 18 years of age is required for directors of the company.
- There should be a Malaysian resident on the Board of Directors.
- According to Section 198 of the Companies Act 2016, the candidate should not be disqualified.
It is mandatory for foreigners who do not live in Malaysia to appoint at least one Malaysian resident as a director of their Sdn Bhd company. The Malaysian Sdn Bhd company, on the other hand, has a maximum of 50 shareholders. Each shareholder declares the number of shares they own when registering their company. In similar fashion, the value of every share is calculated based on the total capital of the business.
After the company has been registered in Malaysia as Sdn Bhd, the shareholders will transfer their shareholdings into the business bank account.
Paid-up Capital
Sdn Bhd companies in Malaysia require a minimum paid-up capital of RM1 before they can be registered. During company registration, the paid-up capital must be declared.
The declaration of paid-up capital that the company does not possess at the time of registration is illegal.
Company Secretary
Company Secretaries must be engaged by all companies within 30 days of incorporation in accordance with the Companies Act 2016 . Choosing a Company Secretary (and therefore your Secretariat team) is very important, as they will be assisting you in mitigating risks of corporate noncompliance.
As an officer of the company, the company secretary is responsible for ensuring compliance with company law, maintaining certain statutory registers, and filing the necessary documents with the Registrar of Companies, such as annual reports, financial statements, and certain forms regarding share capital changes.
Additionally, most companies work with Company Secretaries to incorporate their Sdn Bhd since they make the process of incorporating a company more expedient.