Setting Up a Company Limited by Guarantee (CLBG) in Malaysia

Setting Up a Company Limited by Guarantee (CLBG) in Malaysia

A company limited by guarantee (CLBG) is a public company incorporated with the principal liability of its members limited by the constitution to such amount as the members undertake to contribute to the assets of the company if the company is wound up.

CLBGs are typically established for non-profit purposes and must align with objectives such as:

    1. providing recreation or amusement;
    2. promoting commerce and industry, art, science, religion, charity, pension or superannuation schemes; or
    3. promoting any other objects useful for the community or country, such as environment, health, education, research, social; or sports.

Role of the Companies Commission of Malaysia (CCM)

The Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia – SSM) regulates and oversees the incorporation and compliance of CLBGs. It ensures that such companies operate within the provisions of the Companies Act 2016 (CA2016) and relevant regulations.

Steps to Incorporate a CLBG

Step 1: Name Search & Reservation

A name search must be conducted through CCM’s MyCoID online system to ensure the availability of the proposed company name. Once approved, the name is reserved for 30 days from the date of approval.

Additional Requirements:

    • Explanation of any abbreviations or non-English terms in the company name.
    • Statement of the nature of the business and objectives.
    • Details of the promoters/trustees, including NRIC/Passport information.

Step 2: Requirements for Promoters & Directors

A promoter or director of a CLBG must meet the fit and proper criteria set by CCM. This includes:

    • Relevant experience, qualifications, and competency.
    • Good reputation, character, and integrity.
    • Security clearance from the Royal Malaysian Police or other agencies if required.

The Registrar may approve a person as a director of a CLBG if he is satisfied that the person is fit and proper and competent to perform the duties of a director under the CA 2016,

Step 3: Submission of Incorporation Documents

The incorporation documents must be submitted to CCM within 30 days from the name approval date.

Required documents include:

    • Draft Constitution (following CCM’s sample template).
    • Declaration by Director or Promoter confirming eligibility.
    • Letter of Consent to act as a director or promoter.
    • Complete Biodata of Trustees.
    • Statutory Declaration confirming an initial contribution or donation of RM1 million.

Step 4: Issuance of Certificate of Incorporation

Upon successful submission and approval, CCM issues the Certificate of Incorporation, officially recognising the CLBG as a registered entity.

License to Omit “Berhad” or “Bhd”

A CLBG may apply for ministerial approval to omit “Berhad” or “Bhd” from its name, provided it has an initial fund of RM1 million to support operations. This ensures:

    • Financial sustainability for at least two years.
    • Protection against premature winding-up.
    • Cash contributions pledged by donors must be received within six months of incorporation.

Failure to meet this requirement means the company must retain “Berhad” or “Bhd” in its name.

Ongoing Compliance & Maintenance of a CLBG

To remain in good standing, a CLBG must:

    • Annual General Meeting (AGM) – Must be held within six months after the financial year-end and not later than 18 months from the date of incorporation.
    • Annual Return Filing – Lodged with CCM within 30 days of the company’s incorporation anniversary.
    • Audited Financial Statements (AFS) –
    • The first AFS must be prepared within 18 months of incorporation; and subsequent AFS within six months of its financial year-end.
    • AFS must be sent to every member and laid before an AGM (shall be at least 21 days before the date if its AGM)
    • AFS must be lodged with CCM within 30 days of AGM.
    • Notify CCM of any statutory changes, such as:
    • Appointment or resignation of directors
    • Changes to the Constitution
    • Public fundraising initiatives
    • Purchase or disposal of property
    • Approval of directors’ fees and allowances
    • Accounting & Record-Keeping – CLBG must maintain accurate financial records to reflect a true and fair financial position (Section 245 CA2016).

All major operational changes such as appointment of new directors, change to the Constitution, purchase and disposal of property, having a public donation drive and fixing of fees and allowances for directors, require CCM’s prior approval.

Get Started

We can assist with the incorporation of your CLBG, ensuring full compliance with legal and regulatory requirements.

Contact us today for a free preliminary name search and expert guidance on setting up your CLBG efficiently.


EUROGAIN SECTA SDN. BHD.

22-1&2, Jalan 1/64, Off Jalan Kolam Air/Jalan Sultan Azlan Shah,
51200 Kuala Lumpur, Malaysia.

Tel: +603  4045 1080 (General Line)
Fax: +603 4045 1050
Mobile: +6 016 – 2069 480

Contact Persons:
Mr. Dennis De Witt |dennisdewitt@eurogain.com.my
Ms. Salamiah Senusi |amy.senusi@eurogain.com.my
Ms. Jeen Wong | jeen@eurogain.com.my

Add a Comment

Your email address will not be published. Required fields are marked *