What is a Private Limited Company (Sdn. Bhd.)?
In Malaysia, a Private Limited Company is known as a Sendirian Berhad (Sdn. Bhd.), a common business entity suitable for entrepreneurs and investors due to its limited liability structure.
Role of the Companies Commission of Malaysia (CCM)
The Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia – SSM) oversees company registration and corporate compliance. It regulates business operations and enforces the Companies Act 2016 (CA2016) to ensure a stable corporate environment.
Requirements for Incorporation
A private limited company must meet the following requirements:
- At least one shareholder (subscriber to shares).
- At least one director (who must be a resident in Malaysia).
- A company secretary (must be a Malaysian resident and either a licensed professional or a member of a prescribed professional body).
Steps to Incorporate a Private Limited Company
Step 1: Name Search & Reservation
Before incorporation, a name search must be conducted via CCM’s MyCoID online system. The chosen name must be unique and comply with naming guidelines. Once approved, the name is reserved for 30 days and can be extended for up to 180 days (subject to renewal).
Step 2: Submission of Incorporation Documents
Once the name is approved, incorporation must be submitted within 30 days. If this period lapses, a fresh name application or extension is required.
Required Documents:
- Declaration by Director/Promoter (Section 201 CA2016) – confirming they are not bankrupt and have no criminal convictions.
- Company Constitution (Optional) – if adopted, it must be stamped by the Inland Revenue Board with a fee of RM200.
- Appointment of Company Secretary – the first company secretary must be appointed within one month of incorporation.
Step 3: Notice of Registration
Upon successful registration, CCM will issue a Notice of Registration (Section 15). A Certificate of Incorporation can also be requested.
Step 4: Obtain Necessary Licenses & Permits
Certain businesses require additional approvals, such as business premises licenses or industry-specific permits. It is advisable to confirm regulatory requirements before commencing operations.
Maintaining a Private Limited Company in Malaysia under the CA2016
Once incorporated, a company must fulfill ongoing compliance requirements:
- Annual Return Filing – lodged with CCM within 30 days of the company’s incorporation anniversary.
- Audited Financial Statements (AFS) –
- First AFS must be prepared within 18 months of incorporation.
- Subsequent AFS must be circulated to shareholders, auditors, and debenture holders within 6 months of the financial year-end.
- AFS must be lodged with CCM within 30 days of circulation.
- Updating Statutory Records – Any changes in directors, shareholders, registered office, or share capital must be notified to CCM within the prescribed timeframe.
- Accounting & Record-Keeping – Companies must maintain accurate financial records to reflect a true and fair financial position.
Exempt Private Companies
A private company with fewer than 20 members (none of whom are corporations) can qualify as an Exempt Private Company, allowing it to submit a solvency declaration instead of audited financial statements.
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