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5 Things to Figure Out Before Registering a Sdn Bhd Company in Malaysia

If you are thinking about starting a business in Malaysia, it’s a good idea to first get familiar with the Malaysian company registration process to ensure you are choosing the right type of company for your business. Generally, a Sendirian Berhad (Sdn Bhd) is the most common type of business entity in Malaysia. It is a legal business entity in which the liability is limited by shares. A Sdn Bhd company is essentially incorporated as a private company with the words Sdn Bhd written with the company’s name.

In this post, we are pleased to present to you the top five things that you should figure out before registering a Sdn Bhd company in Malaysia.

1. Company Names

It is important for you to follow the rules and regulations while deciding the proposed company names. Companies Commission of Malaysia suggests the following guidelines for choosing a suitable company name:

  • It should not be misleading, offensive, or blasphemous.
  • The company name should not represent any association with the Royal families or government authorities.
  • The name should not misrepresent the nature of the business.
  • It should not resemble another registered company.
  • A company name should not mention government-controlled activities like insurance unless proper approval has been obtained from the relevant authority.

The name of any business plays a critical role in its success, so it is very important that you spend a considerable amount of time to carefully choose a suitable name for your company. All of the relevant details have to be explained in the incorporation form.

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2. Nature of the Business

Different types of businesses are classified under the MSIC code in Malaysia. During the company registration in Malaysia, it is important that you mention the type of business you will be running using the Sdn Bhd company you wish to register.

If you are unsure about the nature of the business your company belongs to in the registration process, you should consider consulting the company secretary or hiring accounting services in Malaysia that have years of experience in company registration.

3. Business Address

When you are registering a Sdn Bhd company in Malaysia, you need a business address and registered address. Both of these addresses do not have to be the same. Generally, a business address is a location where the business activities are taking place.

On the other hand, a registered address is typically the office of the company secretary where communication related to the company is handled.

4. Company Directors and Shareholders

Directors and shareholders play important roles in a Sdn Bhd company in Malaysia. When registering a company in Malaysia, you should make sure the potential shareholders and directors are meeting the eligibility criteria set by the law.

The eligibility criteria for being a company director in Malaysia are:

  • Both Malaysians and foreigners can become the sole director of a Sdn Bhd company in Malaysia.
  • The age of the company director must be at least 18 years.
  • Director should be residing in Malaysia.
  • The candidate should not be disqualified as per section 198 of the Companies Act 2016.

If you are a foreigner who does not live in Malaysia, then it is necessary for you to hire at least one resident director for your Sdn Bhd company.

On the other hand, a Sdn Bhd company in Malaysia can have up to 50 shareholders. The shares held by each shareholder are declared during the company registration process.

Similarly, the value of each share is evaluated on the basis of the total capital of the business. Once the company has fully registered as Sdn Bhd in Malaysia, the shareholders will transfer the amount into the business bank account according to the number of shares they have in the company.

5. Paid-up Capital

If you want to register a Sdn Bhd company in Malaysia, you must have at least RM1 as paid-up capital. It is important to declare the paid-up capital in company registration. If you are relying on professional accounting services in Malaysia, you will be getting reliable and precise calculations to make sure the entire process is a success.

Remember that it is entirely illegal to declare an amount of paid-up capital that you might not have at the time of company registration.

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In a Nutshell

These are some of the most important factors that you should consider while registering a Sdn Bhd company in Malaysia. The Companies Act 2016 gives extensive details about the dos and don’ts of company registration.

If you choose to rely on professional services provided by accounting firms in Malaysia, the entire registration process will become easy and efficient.

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