Starting a company is exciting, and the paperwork is easier than most first-time founders expect. In Malaysia, a Sdn Bhd (Sendirian Berhad, a private limited company) is set up through an online application to the Companies Commission of Malaysia or Suruhanjaya Syarikat Malaysia (SSM), under the Companies Act 2016.
This guide explains what you need before you apply, what happens during incorporation, and what the law expects of you straight afterwards.
The quick answer: To incorporate a Sdn Bhd in Malaysia, you need a company name approved by SSM, at least one director who ordinarily lives in Malaysia, at least one shareholder, and a registered address in Malaysia. The application goes to SSM through its online system, and you must appoint a company secretary within 30 days of incorporation.
1. What is a Sdn Bhd, and is it the right structure?
A Sdn Bhd is a private company limited by shares, which means the company has legal personality separate from its members. The owners (shareholders) are liable only for the amount, if any, unpaid on their shares.
A Sdn Bhd does bring ongoing duties. Each year the company lodges an annual return with SSM, and its directors prepare financial statements that the company lodges with the Registrar. Weigh those against the protection before you decide.
2. What are the requirements to incorporate a Sdn Bhd in Malaysia?
The basics of an application are a company name, at least one director, at least one shareholder and a registered address in Malaysia.
Company name
A name search must be made to confirm the proposed name is available. Names that contain words from languages other than Malay or English must come with the meaning of those words. Names that use words the Minister has directed the Registrar not to accept, such as "Bank" or "Insurance", are not accepted, though an applicant with justification may appeal to the Minister, and controlled words need a letter of consent from the agency that controls the word. Read SSM's guidelines on company names before you propose a name.
Directors
A private company needs at least one director, and at least one director must ordinarily live in Malaysia, meaning a principal place of residence in Malaysia, as set out in the SSM guidelines for incorporating a local company. A director must be a natural person (a real individual, not a company) aged at least 18. Each director consents in writing and declares that they are not disqualified from holding office as a director under the Act.
Shareholders
A company has one or more members, the Act's term for shareholders, so at least one shareholder is required. A member can be an individual or a company. If a company is the shareholder, the application gives its corporate name, place of incorporation, registration number and registered office.
Shares
For a company limited by shares, the application states the class and number of shares each member will take.
Registered address
The company must at all times have a registered office in Malaysia, to which all communications and notices may be addressed. It must be open and accessible to the public during ordinary business hours.
Information and documents you will need
Gather these before you apply:
- For every director and shareholder: name, identification, nationality and place of residence.
- A statement from each promoter or director confirming consent to act and that they are not disqualified under the Act.
- For a corporate shareholder: its corporate name, place of incorporation, registration number and registered office.
- A letter of consent from the agency that controls the word, if the proposed name uses a controlled word.
3. How does the incorporation process work?
You apply for incorporation to the Registrar under section 14 of the Companies Act 2016, and SSM describes the application as made online. The main stages are below.
- Check the name. A confirmation of availability from the Registrar is needed. A reserved name is held for 30 days, which the Registrar can extend.
- Prepare the details and declarations. The application gives the name, status (private or public), nature of business, registered office, and the details of the directors and members, with the statements listed above.
- Submit the application to SSM. A director or shareholder registered as a system user, or a company secretary, can submit the application online.
- Receive the notice of registration. Once SSM is satisfied the requirements are met, it issues a notice of registration, and the company exists from the date of incorporation stated in it. The Certificate of Incorporation is issued on request.
- Appoint a company secretary. The first company secretary must be appointed within 30 days from the date of incorporation. You can also name the secretary in the application.
4. What happens after the company is incorporated?
Incorporation is the start of your compliance duties, not the end. A company must have at least one company secretary, who must be a natural person aged 18 or above and a citizen or permanent resident of Malaysia, and who is a member of a prescribed body or licensed by SSM. The secretary must cause the register of members to be properly kept and maintained.
Once incorporated, SSM advises the company to obtain any necessary licence, permit or approval from the relevant authorities before it starts business.
Plan for the company secretary early. A good company secretarial arrangement from the first month keeps the company's records in order, so nothing is missed in the first year.
Frequently asked questions
What is a Sdn Bhd company?
A Sdn Bhd, short for Sendirian Berhad, is a private limited company in Malaysia. It has legal personality separate from its members, whose liability is limited to the amount, if any, unpaid on their shares.
How many directors and shareholders do I need to incorporate a Sdn Bhd?
You need at least one director and at least one shareholder. At least one director must ordinarily live in Malaysia.
Can a foreigner incorporate a company in Malaysia?
The Act's rule for directors is about residence: at least one director must ordinarily live in Malaysia. Some businesses also need a licence, permit or approval from the relevant authority before they start.
Do I need a company secretary to incorporate a Sdn Bhd?
You can name a secretary in the application, but the first secretary must be appointed within 30 days from the date of incorporation. A company secretary can also act as the applicant on the incorporation, so the company secretary who assists you can advise you on, and help you prepare, all the paperwork the Act requires for incorporation.
Set your company up properly from day one
Choosing the right structure and getting the paperwork right at the start saves corrections later. As your appointed company secretary, we also keep your statutory records current once the company exists. Engage Centry for company incorporation and get your company's compliance in order from the first day.
