In Malaysia, the most common type of limited companies is those limited by shares. These companies are incorporated and governed by the Companies Act, 1965. Companies limited by shares will carry “Sdn Bhd”, “Sendirian Berhad” behind their names according to Section 22(4) of the Act.

The meaning of private limited companies is that the liabilities of its members are limited to the amount of shares they hold in the company. For example, if Mr. Tan’s shares in an Sdn Bhd amounted to RM10, 000.00, and he has fully paid for the shares, in general, he has no further liability with regards to the Sdn Bhd concerned.

A private limited company can only be incorporated if its memorandum and articles:-

  • Restricts the right to transfer its shares subject to the approval of its directors;
  • Limits the numbers of its members to not more than 50 (requires a minimum of 2 natural persons, but allow another company to wholly own 100% of its issued shares).
  • Prohibit any invitation to the public to subscribe for any shares or debentures of the company;
  • Prohibits any invitation to the public to deposit money with the company for fixed periods or payable at call, with or without interest.

Key Features of Malaysian Private Companies

Malaysia  PLC

Corporate Details

Share Capital

  • Permitted Currencies

Ringgit Malaysia (MYR)

  • Minimum issued capital

One (1)

  • Authorized capital

N/A

  • Par / Nominal value

N/A

Directors

  • Minimum

One (1) individual

  • Minimum age

Eighteen (18)

  • Local directors requirements

Minimum one (1) director who shall ordinarily reside in Malaysia by having a principal place of residence in Malaysia

  • Location of meeting

Anywhere

  • Minimum numbers of meeting

Per Constitution (if any)

Shareholders

  • Minimum

One (1)

  • Bearer shares

No

  • Local shareholders requirements

No

  • Location of meeting

Anywhere

  • Minimum numbers of meeting

None

Company Secretary

  • Minimum

One (1)

  • Requirements

A natural person, citizen or permanent resident of Malaysia, who shall ordinarily reside in Malaysia by having a principal place of residence in Malaysia and member of an approved body or licensed by the Companies Commission of Malaysia

Registered Office

  • Requirements

Within Malaysia

Accounts

  • Records

At the registered office or such other place as the directors think fit

  • Preparation of accounts

Yes

  • Audit requirements and filing

The Registrar shall have power to exempt any private company from this requirement based on conditions set by the Registrar

  • Publicly accessible records

No

Taxation

  • Corporate Tax Rate
 

Company with paid-up capital not more than RM2.5m:

Chargeable Income

YA 2016

The first RM500,000

19%

In excess of RM500,000

24%

Company with paid-up capital above RM2.5m at the beginning of the basis period

24%

Non-resident company / branch

24%

  • Goods and Services Tax (GST)

Standard rate of 6%. Businesses making taxable supplies where the annual sales turnover exceeds MYR 500,000 must register for GST.

  • Local or qualified

No

Annual Requirements

  • Annual Return

Each calendar year not later than thirty (30) days from the anniversary of its incorporation date

  • Financial statements and reports

Financial statements and reports are to be circulated to members of the Company within six (6) months of its financial year end. A copy of the financial statements and reports shall be lodged with the Registrar within thirty (30) days from the circulation to its members.

  • Annual Tax Return

Under the self-assessment system, submission should be made within seven (7) months from the end of the accounting period of the company which constitutes the basis period for the year of assessment.

General

  • Legal System

Common Law

  • Corporate Redomiciliation

No

  • Double Taxation Treaty Access

Yes

 Malaysian Private Limited Company  Distinctive Benefits

  1. The most obvious advantage is the liability “protection” to its shareholders, limited their exposures to the amount of share capital that they subscribed for. Any amount of debts beyond their shareholdings, they are not liable but provided there is no fraud or other malpractice.
  2. Another advantage is the simplicity to transfer existing shares or issue additional shares to new investors. Existing member can transfer his shareholding, wholly or partially, through selling of his shares (subject to directors’ approval, which is). Unlike sole proprietors or partnerships, there is no need to wind up the company in the event of death of its shareholders or directors.

The Valsen Advantage

  1. Speedy, Efficient and consistent Services.
  2. Relentless effort to obtain bank accounts.
  3. Expert advice on structuring options.
  4. Dedicated ongoing compliance support.