Setting Up Private Limited Company (Sdn. Bhd.)
FAQs
1) What is a Private Limited Company (Sdn. Bhd.)?
- A Sdn. Bhd. is a private company limited by shares where its shareholders’ liability is limited to the amount of shares held.
- It is a separate legal entity with full capacity to undertake business activities and transactions including to sue or be sued and manage properties.
2) Who can incorporate a Private Limited Company (Sdn. Bhd.)?
- To incorporate a Sdn. Bhd., one must be at least 18 years old, reside in Malaysia, and is not disqualified under Section 198 of the Companies Act 2016.
- Section 198 described that, a person shall not hold office as a Director of a Company or whether directly or indirectly be concerned with or takes part in the management of the Company , if the person
- is an undischarged bankrupt,
- has been convicted of an offence relating to the promotion, formation or management of corporation
- has been convicted of an offence involving bribery, fraud or dishonesty
- has been convicted of an offence under Section 213, 217, 218, 228 and 539 of Companies Act, 2016 or,
- has been disqualified by the court under Section 199 of Companies Act, 2016
3) How many Directors are needed to form a Sdn. Bhd.?
At least 1 director with Malaysia residency status is needed to incorporate a Sdn. Bhd.
4) Can I incorporate a Sdn. Bhd. without having a Director residing in Malaysia?
According to the Companies Act 2016, there must be at least 1 director who ordinarily resides in Malaysia in order to register a Sdn. Bhd.
5) Can a Corporation be a shareholder in Sdn. Bhd.?
Yes, a corporation can be shareholder in Sdn. Bhd.
6) How much is the minimum paid up capital to form a Sdn. Bhd.?
During the initial stage of formation, the capital range may between RM1.00 up to RM10,000.00.
7) Can Company Increase the Capital after Incorporated?
Yes, the Company may do so provided bank account has successfully been opened. This is due to bank statement is required to be shown as a proof fund injected to the Company’s bank account.
8) Must the Company appoints Company Secretary?
According to Section 236 of the Companies Act 2016, all Sdn. Bhd. must appoint a company secretary within 30 days from the date of incorporation.
9) What are the roles and duties of the Company Secretary in Company?
Besides assisting with company registration, a company secretary is also responsible for:
a) Ensure the information of the Company, director(s) and shareholder(s) are kept up-to-date.
b) Provide the registered office of the Company.
c) Advise the Company on compliance to various laws and regulations such as the Malaysian Companies Act 2016.
d) Handle striking off or winding up of the company.
e) Provide Certified True Copy (CTC) documents for opening bank account, grant application, etc.
(f) Keep meeting minutes and written resolutions of board meetings.
10) What is a Registered Office?
Registered office is the address where all company documents, registers as ordered by the Companies Act 2016 need to be kept at. The registered office must located in Malaysia and is open and accessible to the public during ordinary business hours. By practice, Companies Secretary address is usually the registered office of the Company.
11) Is the Registered Address the same as Company Business Address?
A Company’s registered address is usually where the Company Secretary’s office is located at, which shall be open and accessible to the public during ordinary business hours. This is where all Company documents, as ordered by the Companies Act 2016, shall be kept at.
Meanwhile, business address is refer to the place where Company undertakes business activities.
12) Can the Business Address be the address for Registered Office?
Yes, possible. However, it is not advisable as to ensure that the registers which are required to be maintain under Companies Act 2016 is up to date.
13) I own an Enterprise, Partnership. Can any one of them be converted into Private Limited Company (Sdn. Bhd.)
Switching the type of business structure is not possible as they are different entity. Nevertheless, one can incorporate a new Sdn. Bhd. and run the business as a new company before termination the existing Enterprise or Partnership
14) I own an existing Sdn. Bhd. or Limited Liability Partnership. Can I register a new Sdn. Bhd. using the same Company Name?
A new Sdn. Bhd. shall not use the same name as any existing business entity even if they are owned by the same person. Any Company name that may create confusion with another Company’s that exists in the system is prohibited.
15) Can I close down my existing Sdn. Bhd. and register a new Sdn. Bhd. with the same name?
Yes, you can. However, there is a holding period of 2 years before the existing Sdn. Bhd. name can be re-used by a new entity again.
16) Must Company adopts a Constitution?
A Company, may or may not have a constitution. Without its own constitution, the Company, Directors and Members shall have the rights, powers, duties, and obligations as set out in the Companies Act 2016.
Based on the Companies Act 2016, a Company shall not be formed for any unlawful purpose. Hence, if a Company has adopted its own constitution, object clauses are now less significant and may or may not be specified in the constitution.