Requirements for Forming a Sendirian Berhad (Sdn Bhd) Company

Forming a Sendirian Berhad (Sdn Bhd) company in Malaysia is a popular option for entrepreneurs and businesses due to its flexibility and limited liability features. If you're considering this structure for your business, it's essential to understand the specific requirements and processes involved.

In this guest post, we will explore the key aspects of registering a Sendirian Berhad company in Malaysia, including its unique features, necessary documents, and eligibility criteria.

What is a Sendirian Berhad (Sdn Bhd) Company?

A Sendirian Berhad (Sdn Bhd) company, commonly referred to as a private limited company, is a type of business entity in Malaysia where the liability of shareholders is limited to their shares. This structure is preferred by businesses because it separates personal and corporate assets, offering protection in case of financial difficulties. Additionally, an Sdn Bhd company can operate independently of its owners, allowing for perpetual succession unless dissolved.

Basic Requirements to Form an Sdn Bhd Company

The following are the key requirements to register a company in Malaysia:

Company Name: The proposed name of the company must be unique and comply with the guidelines set by the Companies Commission of Malaysia (SSM). It should not be similar to existing companies or contain restricted words without authorization.
Directors: At least one director is required to form an Sdn Bhd. The director must:
- Be a natural person (not a corporation)
- Be at least 18 years old
- Reside in Malaysia
- Not be disqualified under the Companies Act 2016, which means they cannot be bankrupt or have been convicted of an offence.
Shareholders: An Sdn Bhd requires at least one shareholder who can also be the director. Shareholders can be individuals or corporations. However, the number of shareholders is capped at 50, distinguishing an Sdn Bhd from a public company.
Paid-up Capital: The minimum paid-up capital required is RM1. However, companies are encouraged to set a higher amount depending on the scale and nature of their business.
Registered Office: The company must have a registered office address in Malaysia. This address is where all official correspondence from regulatory bodies will be sent.
Company Secretary: Within 30 days of incorporation, the company must appoint a qualified company secretary who is licensed by the SSM or a member of a professional body such as the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). The company secretary is responsible for ensuring the company complies with statutory requirements, including annual returns and tax filings.

Steps to Register an Sdn Bhd Company

Once you have met the above requirements, the registration process is relatively straightforward. Below is a step-by-step guide to incorporating an Sdn Bhd:

Register an Account with MyCoID: Start by creating an account on the MyCoID online portal, which is the official platform for business registrations in Malaysia.
Company Name Search: Conduct a name search through the MyCoID portal to ensure your proposed company name is available. You will need to submit up to three name options in case your first choice is unavailable.
Submit the Incorporation Form (Super Form): Complete the Super Form, which includes details about the company’s name, business activities, and particulars of directors and shareholders. This form is also where you provide the registered business address and business code for the type of operations your company will engage in.
Pay Registration Fee: Once the form is submitted, you must pay a registration fee of RM1,000 to finalize the incorporation process.
Obtain the Notice of Registration: Upon successful registration, a Notice of Registration will be issued, confirming the incorporation of your Sdn Bhd company. You may also request a company certificate from SSM for a fee.

Eligibility Criteria for a Director and Shareholder

Age Requirement: Directors and shareholders must be at least 18 years old.
Residency: At least one director must be a Malaysian resident.
Non-Bankruptcy: Directors cannot be declared bankrupt or convicted of offenses within the past five years.
Shareholding Limit: The company can have a maximum of 50 shareholders.

How Long Does the Process Take?

The entire registration process for an Sdn Bhd typically takes between one and two weeks. Here is an estimated timeline for each step:

Account registration and name search: 1 working day
Preparation of documents: 2-3 working days
Signing of documents by directors and shareholders: 1 working day
Submission of documents to SSM: 3-5 working days
Issuance of the Notice of Registration: 1 working day

Post-Incorporation Compliance

Once your company is successfully registered, certain post-incorporation tasks must be completed, including:

Appointment of Company Secretary: You have 30 days to appoint a qualified company secretary.
Annual Returns: Sdn Bhd companies must submit annual returns to SSM, outlining financial statements and other key data.
Taxation: Ensure compliance with Malaysia's tax regulations by registering for the Goods and Services Tax (GST) if applicable, and maintaining accurate financial records for corporate tax filings.

Conclusion

Forming an Sdn Bhd company in Malaysia or setting up A branch office In Malaysia is a manageable process as long as you meet the requirements and follow the correct procedures. By ensuring that your company is in compliance with the necessary legal requirements, you can lay a strong foundation for your business to grow and thrive in Malaysia’s dynamic market.