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Incorporation FAQ in Malaysia

INCORPORATION PROCEDURES

A private limited company is the most popular business entity in Malaysia. It has a separate legal status from that of its shareholders. Directors have limited liability for the debts and losses of the company. It usually has the words “Sdn Bhd” as part of its name.

incorporation faq

For more information, please refer to Sole Proprietor vs LLP vs General Partnership vs Company. Or, you can email any queries you have to us at info@3ecpa.com.my and we will promptly reply within 24 hours.

  1. Complete the Online Incorporation Form / Email us the information required [proposed company names, principal business activities of the new company setup, photocopy of all directors & shareholders I/C or passport, latest residential addresses of all directors with proof of address such as utilities (if different from IC), Paid-up capital information (min RM2 or max RM2,500), percentage of shareholding of each shareholders] to us at info@3ecpa.com.my.
  2. We will check the availability of the company name and get back to you within 24 hours.
  3. Once the information is received and the name is confirmed, we will email you our quotation for payment. Upon receipt of payment, the company name will be reserved at your request.
  4. Once name approved by SSM , we will prepare full set of registration documents.
  5. Signing of documents at 3E Accounting office by all directors & shareholders.
  6. Once the signing of documents is done, we will proceed to incorporate the company with Companies Commission of Malaysia (SSM).
  7. Stamping of M&A by LHDN and Submission to SSM.
  8. Issuance of Digital Incorporation Certificate by SSM.
  9. Submission of First form (Form 24, 44 & 49).
  10. Once the Malaysia company setup, we will email you all the completed documents (i.e. Memorandum & Articles of Association, business profile and various other documents).

The requirements to form a private limited company (identified through the words ‘Sendirian Berhad’ or ‘Sdn. Bhd.’ appearing together with the company’s name) are:

  1. A minimum of two subscribers to the shares of the company (Section 14 CA);
  2. A minimum of two resident directors (Section 122); and
  3. A company secretary who can be either :
  • An individual who is a member of a professional body prescribes by the Minister  of Domestic Trade Cooperative and Consumerism; or
  • An individual licensed by the Companies Commission of Malaysia (SSM)

To incorporate a company, the following information must be submitted to us at info@3ecpa.com.my. Alternatively, you can complete the Online Incorporation Form and send to us.

  • Proposed company names
  • Principal business activities of the new company setup
  • Photocopy of all directors’ & shareholders’ I/C or Passport
  • Latest residential addresses of all directors with proof of address such as utilities (if different from IC)
  • Paid-up capital information (min RM2 or max RM2,500)
  • Percentage of shareholding of each shareholders.

In fulfilling with the “Know Your Client” requirement under Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA), we would require the presence of all directors/shareholders at 3E’s office to sign the incorporation documents. Besides the AMLATFA requirement, physical presence is required as 3E Accounting is acting as witness to the signatures in the Memorandum and Articles of Association (MA) and also declaration form which required attestation by commissioner for oaths.

3E Accounting will not be able to act as witness to the signatures on the Memorandum and Articles of Association (MA) and for the declaration form (Form 48A).

Shareholders/Directors need to have another person to act as witness and attest the declaration form with commissioner for oaths at his own state (personally visit the commissioner for oaths office for attestation). Thereafter courier back all original signed copies of incorporation documents to 3E for incorporation submission.

Based on 3E Accounting’s past experiences dealing with SSM, the entire incorporation process will take 5-10 working days from the date that directors & shareholders sign the incorporation documents at 3E Accounting office.

Having said that, please note that the incorporation timeline is very dependent on the accuracy and completeness of information and documents and also subject to the availability & stability of SSM’s MyCoID online system.

After your Malaysia company has been setup, you can start your business activities immediately. However, you may need to do some or all of the following if applicable to you:

  • Open bank
  • If your business requires one or more licenses, you may need to obtain the relevant licenses first before you can commence your business
  • Register for Goods & Services Tax (GST) if necessary. The registration of GST is not mandatory unless your annual turnover exceeds RM500,000. We can help you register for GST, if you so
  • If you intend to hire local employees (Malaysia citizens and/or permanent residents) you will need to open an account with the Employment Provident Fund (EPF) A percentage of the local employees’ salaries will be contributed to the EPF Board on a monthly basis as part of their retirement fund. For more details, please visit EPF web portal. We can help you register your company EPF account and manage your staff payroll, if required.
  • You will need to decide on your company’s fiscal year end, which can be any date within 18 months from the date of incorporation of your You will need to keep track of your income and expenses (bookkeeping) according to Malaysia accounting standards. Depending upon the volume of transactions, we can provide bookkeeping services either on a weekly, monthly, quarterly or yearly accounting basis.

Please Corporate Compliance Requirements for further details.

3E’s INCORPORATION SERVICES

3E Accounting could help you to register your new company in Malaysia at only RM1,100 (W/GST RM1,166) ONLY. The Best & Fastest Company Incorporation Services in Kuala Lumpur, Selangor and Malaysia with promise no hidden costs and tricky add-ons. You are required to take up our Secretarial Services Package to enjoy above promotional price. Please see below for more details!

The Standard Malaysia Incorporation services package includes the following:-

  • Unlimited name search for availability of proposed names for register company in Malaysia
  • Name reservation with register SSM for 2 times
  • Approval Letter To Use Name
  • Authorised Capital of RM400,000
  • Issued & Paid up capital – RM2 to RM1,000
  • Registration fee of RM1,000 payable to SSM for registration of authorised capital amounting to RM400,000
  • Prepare and Stamping of Standard Memorandum & Articles of Association (M&A)
  • Stamp duty of RM200 for stamping M&A
  • Submission of Form 49, Form 44 & Form 24 to SSM after registration
  • Prepare resolutions for First Board of Directors’ Meeting
  • Prepare resolution to open the company’s bank account (Free up to 2 accounts)
  • Prepare 2 sets of certified true copies of incorporation documents (including E-copies of incorporation certificate, M&A, Form 49, Form 44 & Form 24)
  • Free printing & stationery, traveling expenses, telephone and other out-of-pocket expenses
  • Free incorporation consulting & advisory services
  • Free tax planning and GST advice by our Tax Director from Big Four
  • Free 3 months dedicated call forwarding services by Hoiio (Activation upon request) [worth RM72]
  • Free 1 unit of self-inking rubber stamp (worth RM50 (W/GST RM53))
  • Free 1 unit of common seal (worth RM100 (W/GST RM106))
  • Free 1 year “.com” Domain Name Registration.
  • For Malaysia company setup with directors and shareholders more than 2 person or entity, extra charge of RM100 (W/GST $106) per person or entity is applied.
  • No lock in period and no exit fees for Malaysia Company Setup

Our Secretarial Services Package fee is RM1,000 (W/GST RM1,060) per year and includes the following:-

  • Acting as named Corporate secretary by our qualified professional staff (Malaysian)
  • Safekeep company common seal
  • Maintaining the Minutes and Register Books
  • Advice on secretarial/statutory/compliance/accounting/tax/GST matters
  • Monitoring and ensuring compliance with relevant legal requirements, particularly under the Companies Act and Income Tax Act. Regular compliance alert via email and call.
  • Provision of registered office address includes:
    • Statement of letter is available upon request
    • Free Incoming General Fax Services (Local outgoing fax-RM1 for each page, Overseas outgoing fax-RM2 for each page)
    • Free Scanning letter services upon request
    • Free daily letter/parcel notifications via email
    • Self-collection of mail and parcels between Monday – Friday: (9am to 6pm) (no handling fee)
    • Receipt of normal mails, air mails, parcels (below 3 kg) or registered mails *
    • Mail forwarding / Courier arrangement to a local / overseas address on daily / weekly / monthly basis is available (Service fee of RM 1 is applied for each forwarding)

There will be different requirements for authorised & paid-up capital for different licensing or application employment Further details, please refer Company’s Paid Up Capital Requirements For Employment of Expatriate.

* Approval must be obtained for any bulky items / parcels (especially it is more than 3 kg) sent to the registered office address. Daily handling fee and storage fee is applied.

At 3E, we don’t believe in a one-size-fits-all package for our clients. Call us at +603 26037328 or email to us at info@3ecpa.com.my to discuss more on how we can help you.

3E Accounting’s service fee schedule is completely transparent – there are absolutely no hidden fees. No service organization is worth your trust if it hits you with undisclosed fees. Please refer to the quotation for standard incorporation services for further details.

3E’s incorporation fees are the lowest within the high-quality segment of the industry. Our standard incorporation packages are all-in-one for the company setting up with minimum requirements. There is no further charges for commissioner of oaths for statutory declaration Form 48A, minutes of first board of directors meeting, resolution to bank account opening (maximum 2 accounts), reimbursement charges such as printing & stationery, traveling expenses to ssm, telephone, fax & courier charges on registration and etc.

Incorporation are done vide the SSM’s online MyCOID system and it required the incorporation fees (Each Name Search – RM30; Registration fee of RM1,000 for registration of authorised capital amounting to RM400,000; Stamp duty of RM200 for stamping M&A ) are paid beforehand.

This means 3E need to make payment to SSM before we start works and therefore the terms for services is payment upon confirmation of engagement.

3E’s incorporation fees are the lowest within the high-quality segment of the industry. Our standard incorporation packages are all-in-one for the company setting up with minimum requirements. 3E Accounting’s service fee schedule is completely transparent – there are absolutely no hidden fees/additional charges.

You may aware that majority of the incorporation fees are payable to SSM (Each Name Search – RM30; Registration fee of RM1,000 for registration of authorised capital amounting to RM400,000; Stamp duty of RM200 for stamping M&A ) and margin to 3E is very minimal. We are able to achieve significant cost efficiencies by leveraging our investment in information technology and we have passed these savings on to our clients.

In view of the above, it is almost impossible for 3E to give any further discount but our team is committed to provide you with quality, timely service that always exceeds your expectations.

Section 139 of the Companies Act requires every company shall have one or more secretaries each of whom shall be a natural person of full age who has his principal or only place of residence in Malaysia. In addition, the first secretary of a company shall be named in the memorandum or articles of the company.

This mean you are required to appoint 3E as your Company’s first secretary in order for us to assist you in the incorporation of your proposed Company. Therefore, we request one year fees in advance for the secretary services.

Any engagement of services with 3E is subject to the satisfactory conclusion of our client acceptance /due diligence check procedures. Clients are required to furnish the necessary information for us to perform client acceptance /due diligence check procedures. Secretary agreement are required to be signed by the corporate representative / director to confirm the understanding of, agreement to and acceptance of the scope of services, both parties’ responsibilities and the services terms and conditions.

In the event that the services are deemed impermissible under any applicable independence restrictions, we reserve the right to terminate the services and the Client agrees to release us from any obligations with immediate effect. In no event shall we be obliged to perform any services that would cause us to be in violation of any applicable law, rule or regulation, or any professional standards applicable to us.

DIRECTOR

i. Natural person.

ii. Minimum aged of 18 and above.

iii. He or she is not a bankrupt and has not been convicted and imprisoned.

iv. Any person over the age of 70 cannot be appointed as a director of a public company or its subsidiaries unless his appointment is approved by at least 75% of shareholders at general meeting.

Pursuant to Section 122(1) of the Companies Act, 1965 that a company must at least two (2) directors who each has his principal place or only place of residence within Malaysia. The requirement of residency is mainly to ensure that there is a point of contact in Malaysia and for purposes of enforcement. (3E’s Nominee Director Services could help you in fulfilling these requirements)

However, maximum number of directors to be appointed in the Board have to comply with each of the Company Articles of Association (e.g. number of director shall not less than 2 and not more than 9).

  • The directors manage the company’s business in accordance with the company’s Articles of Association and the law
  • Disclosure of interest in contracts, property, offices and etc.
  • General duty to make disclosure pursuant to Section 135 of the Companies Act, 1965.
  • Any changes of particular (e.g. change of address, resignation and etc.)
  • Compliance with all Corporate Compliance Requirements

Any person aged above 18 years old can be appointed as director and before a person can be appointed as a director, he must lodge with SSM a statutory declaration (Form 48A) declaring that he is not disqualified from being a director due to:-

  • being an undischarged bankrupt;
  • being convicted of any offence (whether in or outside Malaysia)
    • in connection with the promotion, formation or management of a corporation;
    • involving fraud and dishonesty punishable on conviction with imprisonment for three months or more;
    • under Section 132 As to the duty and liability of officers or Section 303 Liability where proper accounts not kept , within a period of five years preceding the date of this declaration;
    • Section 303 for not keeping proper books of accounts throughout the period of two years after commencement of investigation or winding up or the period between incorporation of company and commencement of investigation or winding up.
  • Being imprisoned for any offence referred to above within the period of five years immediately preceding the date of this declaration
  • That he consent to act as a director of the company

In summary, a foreigner can be appointed as a directors provided he is not disqualified from being a director and company has fulfilled the requirements under Section 122(1) of the Companies Act, 1965, i.e. must at least two (2) directors who each has his principal place or only place of residence within Malaysia. The maximum number of director to be appointed in the Company have to comply with the Articles of Association of the Company (generally, maximum is 9 directors)

Please note that a foreigner would be considered as resident director if his principal place or only place of residence within Malaysia i.e. he has employment pass or permanent resident pass in Malaysia.

Pursuant to Section 122(1) of the Companies Act, 1965 that a company must at least two (2) directors who each has his principal place or only place of residence within Malaysia. The requirement of residency is mainly to ensure that there is a point of contact in Malaysia and for purposes of enforcement.

Generally, Malaysia resident refer to a citizen or permanent resident of Malaysia or a person with employment pass.

SHAREHOLDER & SHARE CAPITAL

  1. Minimum aged of 18 and above.
  2. He or she is not a bankrupt and has not been convicted and imprisoned.

There have long been debates on whether minors (i.e. someone under 18) are allowed to hold shares in a company. Although the Companies Act is silent on this matter, the prohibition for minors to enter into contracts under Section 11 of the Contracts Act 1950, has been interpreted to expend to the holding of shares in a company.

The shareholders (also called members) own the company by owning its shares i.e. owners of the company whilst the directors are appointed by shareholders to manage a company. Although the roles are completely distinct, a single person can assume both positions (both directors and shareholders are the same group of persons), or lots of different people can fulfill these roles.

Directors

  • Also known as company officers.
  • Can also be shareholders.
  • Appointed to a company at the discretion of its shareholders.
  • Responsible for managing a company lawfully and ethically in accordance with the Companies Acts and the Articles of Association.
  • Required to run a business within their powers.
  • Expected to promote the success of a business with a view to making a profit for the benefit of the company and its shareholders.
  • May receive a salary and dividend payments.
  • Their rights and powers are determined by the shareholders
  • Legally responsible to ensure company is comply with all corporate compliance requirements such as filing true and fair annual accounts, Annual Returns, and Company Tax Returns within the deadlines, and ensuring all required taxes are paid on time.
  • Can be removed and disqualified if they are incompetent, display ‘unfit’ conduct or breach their contract in any way.
  • Can be held personally liable and prosecuted should they fail to uphold their legal responsibilities and duties.
  • Normally authorized to issue and transfer shares in a company, but this depends on the Articles of Association.

 

Shareholders

  • Also known as members. The first shareholders are known as subscribers.
  • Can be a natural person or a corporate body.
  • Own some or all of a company through shares.
  • Liability is limited to the nominal value of their shares. Should the company run up any debts, they are only responsible for the amount of their shares.
  • Can also be directors.
  • Not involved with the everyday activities of the company, unless they are also directors.
  • Have the power to appoint and remove directors and company secretaries at any time.
  • Can choose what powers and rights the company directors have.
  • Proportion of ownership depends on the number, value and class of shares held.
  • Their voting rights, capital rights and dividend rights depend on the Prescribed Particulars of their shares.
  • Will make decisions about significant issues such as changing the company name or structure, investment opportunities, issuing shares, appointing an auditor to inspect the accounts, appointing or removing a director, changing a director’s powers, changing the Articles of Association or Shareholders’ Agreement.
  • Normally have a right to any surplus capital if the company is wound up.
  • Statutory minimum no. of shareholders is 2 except a wholly-owned subsidiary company (has only one shareholder)
  • If no. of shareholders reduced below 2, company and the sole shareholder are given 6 months to comply the minimum requirement
  • If company carries on business for more than 6 months without minimum no. of shareholders, the sole shareholder shall be liable for payment of all debts after the expiration of 6 months and may be sued for the debts
  • Penalty: fine RM2,000. Default penalty RM200 for each day

While the day-to-day management of the company is the responsibility of the company’s BOD, the shareholders’ may exert a significant indirect influence by exercising the rights and powers available to them. The rights to them are accorded by the Companies Act 1965, the Memorandum & Articles of association and shareholders’ agreement.

  • Rights at shareholders’ meetings-can speak and vote on resolution
  • Voting out directors
  • Electing to sell their shares
  • Right to receive dividend
  • Right to restrain the company from acting ultra vires
  • Right to approve any change in name of company
  • Right to challenge the change of the object clause
  • Right to ensure due observance of the company’s Memorandum & Articles of association
  • Right to receive a copy of the financial statement
  • Right to appoint and remove auditor
  • Right to return of capital on winding-up
  • Right to call a meeting
  • Right to appoint proxies
  • Right to request company in writing to provide information held by the company (with a right to appeal to the court if the company refuses)
  • Right to inspect statutory records [register of members, minutes book, register of directors, managers and secretary]

A shareholder of a Company Limited by shares (Sdn Bhd), is not liable for the company’s obligation (liabilities). The liability of the shareholder is limited to any amount unpaid on the shares held by him in the event of winding up.

The authorised capital is also called the registered capital or nominal capital. It is the maximum amount of share capital within which the issued and paid up capital of the company lie.

On every share issued or allotted, the amount paid in full on its par value, is known as the paid up capital. The minimum requirements for authorised capital for a private limited company under Companies Acts is RM400,000 whereas paid up capital is RM2 (subject to different requirements under specific approvals, operating licences, permits or registration with the relevant governmental departments).

The issued share capital must be paid up immediately upon incorporation. Therefore, 3E’s standard incorporation packages only support paid up capital from RM2 to RM2,500 as we assuming shareholders paid for the allotted shares with cash (without asking payment proof).

If the intended paid up capital is more than RM2,500 clients are advised to incorporate the Company with minimum statutory paid up capital – RM2 and subsequently increase the paid up capital to the desired account after bank account opened so that shareholders could provide the payment proof into the corporate bank account.

Paid-up capital is money paid in by shareholders to the company to purchase shares. These funds can be used for all company expenses, including paying off all company debts. There is no personal liability on an individual shareholder if the necessary amount for the subscribed shares is fully paid. In the event that this amount is not fully paid, the creditors can demand that the shareholder be personally responsible for the shortfall.

There is no lockup period as such. You can immediately start using capital for your company needs.

COMPANY SECRETARY

  • Section 139(1) , requires every company to have at least one secretary of whom his principal or only place of residence is in Malaysia. (please refer 3E’s Cost Effective Secretary Services)
  • No person shall act as a secretary of a company unless:
  • He is a member of a professional body;
  • The Malaysian Association of the Institute of Chartered Secretaries and Administrators (MAICSA)
  • The Malaysian Institute of Accountants (MIA)
  • The Malaysian Institute of Certified Public Accountants (MICPA)
  • The Malaysian Bar
  • The Sabah Law Association
  • The Advocates’ Association of Sarawak
  • The Malaysian Association of Company Secretaries (MACS); or
  • He is licensed (LS) by the Registrar of companies (SSM)
  • A person shall be disqualified to act as a secretary if:
  • He is an undischarged bankrupt
  • He is convicted whether within or without Malaysia of any offence –
    • in connection with the promotion, formation and management of a company;
    • convicted imprisonment for 3 months or more for fraud or dishonesty
  • He ceases to be a member of the body prescribed by the Minister (in the case of LS)
  • He ceases to be a holder of a valid license issued by their prescribed bodies

i. Understand and interpret the clauses in Memorandum and Articles of Association

ii. Maintain statutory registers –keeping and updating the registers

iii. Update changes of the company to SSM by lodging the necessary forms and documents

iv. Ensure compliance with the Companies Act 1965

v. Liaise with shareholders

vi. To handle all paperwork, statutory documents and procedural matters which involve the running of a company.

vii. File audited accounts and annual return within the time required under the CA 1965

viii. Protect the company’s assets (company’s statutory registers)

ix. Oversee arrangement to allow shareholders and others to inspect certain statutory registers of the company.

COMPANY NAME

The general principles and characteristics of names which can be considered as company’s name:-

  • Names shall use the correct language and spelling;
  • If a name contains words other than the Malay or English Languages, the meaning of such words must be given;
  • Names which are not blasphemous or likely to be offensive to members of the public;
  • Names which do not resemble elements of religion;
  • Certain names which are not too general, for example “Attempt Bhd.” or “Beautiful Sdn. Bhd.”;
  • The usage of individual names shall be from the names of the directors to be named in the Memorandum or Articles of Association. However, individual names can be considered if such names are from the names of immediate family members of the director or promoter, for example, the names of children, father, wife, grandfather or grandmother. Proof of family relationship must be given. If the name of the company is from the individual name of a group of companies in existence, consent letter must be obtained from the group of companies which have such individual names;
  • State the meaning of the created words;
  • Company name is not an acronym that can be used to mislead as the name of a multi-national company such as PNB, ICI, IBM;

(Please refer Guide to Select Your Malaysia Company Names in Malaysia for further information)

  • Proposed company’s name is similar to those existing one and may cause confusion to the public (unless a consent letter are granted).
  • Proposed company’s name is similar with the former name of existing company and may create undesirable confusion to the Public members.
  • Proposed company’s name is prohibited by the Companies Act 1965 or any other relevant Acts.
  • Proposed company’s name is undesired for use as company name, for example, Ekor Ayam Sdn Bhd.

SSM may randomly carry out a due diligence exercise, which may delay the name approval process. In addition, the business activity could be subject to control and regulation by other government authorities and hence need approval beforehand.

Therefore, it is recommended that you reserve your name early, should you have a deadline date to incorporate your company. Please email to info@3ecpa.com.my now.

The Company can change back to its old name after 12 months but a company cannot use the old name of another to incorporate a new company.

The applicant owned a business and wish to use the name to incorporate a company, the approval of name under Companies Act is not automatic. The applicant is still subject to provisions of the Companies Act.

If only one promoter that is need to be changed, there is no need to submit a new Form 13A. The applicant can proceed with the incorporation of a company.

If all the names of the promoter are to be changed, the applicant needs to submit a new Form 13A together with new fees, and state the reason for this re-application.

The applicant has to attach a consent letter by from the holding company for the purpose of incorporating a subsidiary company. Approval of name is still subject to the similarity of the existing companies.

SSM may raise query on the submitted Form 13A due to the consent letter is not complete and/or did not comply with the regulations.

Yes, an approved name can be transferred to another party by re-filling Form 13A together with the fees and the consent letter from the previous applicant.

MEMORANDUM & ARTICLE OF ASSOCIATES

The Memorandum of Association of a company, often simply called the Memorandum, is the document that governs the relationship between the company and the outside.

The Memorandum of Association shall describe the following:-

  • Company’s name
  • Location of its registered office
  • Object clauses
  • Powers of the company
  • Liability of the members of the company is limited
  • The amount of it authorised capital that registered with Companies Commission of Malaysia.

The Articles of Association of a company, which are commonly known as articles, constitute the constitution of a company. Articles detailing the rules and regulations governing the internal management of the affairs of a company and the conduct of its business such as issuance and transfer of shares; proceeding of general meetings, board meeting; directors’ appointment, retirement, resignation, powers and duties; accounts; use of common seal etc.

The Memorandum of Association of every of the company must state the objects for which the company is established. The Object clause which sets out the purpose for which the company is formed i.e. defines the activities which the company is permitted to undertake and the powers that the company may be able to exercise (in short it refer to the nature of business of the Company).

With effective from 12 May 2000, the number of object clauses for a company is limited to three only. Generally, 3E will put as the proposed company’s main activities as the 1st object clause, whereas the 2nd will be the share investments and 3rd are any other business in connection with or as ancillary to the main business in the M&A.

The Malaysia Standard Industrial Classification (MSIC)/ business code is used in the collection, compilation and publication of statistics. The MSIC is intended to be a standard classifications of productive economic activities. Its main purpose is to provide a set of activity categories that can be utilised for the collection and presentation of statistics according to such activities.

Generally, we advise our client to select only one (1) MISC business code that most relevant to the Company as SSM only allow one MISC business code for each object clause/ business activities. Furthermore, every MSIC code may constitute a separate business activity which need to report separately for accounting, tax or GST purposes.

You could find the MSIC online or refer to the SSM MSIC Code – ROC

OTHERS

SSM or Suruhanjaya Syarikat Malaysia is the malay term of CCM or Companies Commission of Malaysia. They serve as a government agency to incorporate companies and register businesses as well as to provide company and business information to the public.

Before a business can legally start operating, businesses are required to comply with some form of licensing, which could be a general licence, an industry/sector specific licence or activity specific licence. Business licences are required by the legislation and administered by various government agencies, statutory bodies and local authorities. Business licences includes registrations, approvals, licences and permits. The compliance requirements vary by industry, business activity and location.

Business licences can be categorized into 3 different logical groups, namely:

(1) General licences

(2) Sector Industry Specific licences; and

(3) Activity Specific licences.

 

(Please refer Business Licences in Malaysia for further details)

The common seal of the company shall be only used with the authority of the directors or of a committee of the directors authorised by the directors in that behalf, and every instrument in which the seal is affixed shall be signed by a director and countersigned by the secretary or second director.

The definition of “book” under the Section 4 of the Companies Act, 1965 includes any register or other record of information and any accounts or accounting records, however compiled, recorded or stored, and also includes any documents.

The Statutory/ Register Book shall be kept at the registered office or any such other place as the directors may approved under the Section 159(1), Companies Act, 1965. However, Statutory/ Register Book and common seal are normally kept at the registered office of the Company (Company Secretary’s office).

The Company number means:-

  1. In relation to a company, the number allocated to it by SSM on its Incorporation;
  2. In relation to a foreign company, the number allocated to it by the CCM on its registration; and
  • In relation to a proposed company, the reference number allocated to when a proposed name is approved by SSM.

Upon incorporation of a Company, the company number and the name of company must appear on the seal and all business letters, statements of account, invoices, official notices, publications, bill of exchange, cheques or letters of credit of or purporting to be issued or signed by or on behalf of the company under the Section 121(1) of the Companies Act, 1965.

A company shall as from the day on which it begin to carry on business or as from the fourteenth day after the date of its incorporation, whichever is the earlier, have a registered office within Malaysia to which all communications and notices may be addressed and which shall be open and accessible to public pursuant to Section 119(1) of the Companies Act, 1965. Generally, most of the Companies (Sdn Bhd) are using their company secretary office as the registered address.

Whereas the Business Address is a place for conduct the business activities at any place in Malaysia, be at your home, shop, factory or even you don’t need to have business address as this is not required by SSM at the time of Company registration.

The use of 3E’s office premise as your company’s Registered Address is free when you engage us on Incorporation Services or Secretarial Services. Please note that the registered address is merely for fulfilment of statutory requirements under the Companies Act. 3E also offers cost effective and reliable Virtual Office Solutions.

Every company must have appoint an auditor or auditors and the person so appointed must be an “approved company auditor” under the Companies Act, 1965 and must not otherwise be closely associated with the company. An auditor is a person who principal task is to examine the financial statements and record of the undertaking and report whether in his opinion they properly reflect the activities of the undertaking during the period under review and of its assets and liabilities at the end of that period.

The directors of a company are obliged at any time after a company is incorporated but before the holding of the First Annual General Meeting (“AGM”) of the Company at which accounts are laid to appoint a person or persons to be the auditor or auditors of the Company. If the directors fail to make any appointment prior to First AGM, the company may make such an appointment at a general meeting. The auditor or auditors so appoint will hold the office until the conclusion of the First AGM.

Section 4 of the Companies Act 1965 defines financial year in relation to any corporation as the period in respect of which any profit and loss account of the company, laid before it at a general meeting is made up, whether that period is a year or otherwise. In short, financial period is the Company’s accounting period.

As the CA 1965 does not specify the date in which a financial year shall commence or end, the decision to determine the financial year, including any changes thereof, is entirely at the discretion of the company.

Nevertheless, a company is required to hold its first Annual General Meeting (AGM) within 18 months of its incorporation (Section 143 (1) of the CA 1965). This mean that the first accounting period should not more than 18 months.

Most companies use either the end of the calendar year (December 31) or the end of any of the quarter (March 31, June 30 or September 30) as their fiscal year end date.

Please refer to 3E’s Article on How to Determine the Financial Year End for Your Company

 

Both exempt private company and non exempt private company are private limited company with the following exception :

Charateristic Exempt Private Company Non Exempt Private Company
Type Sdn Bhd Sdn Bhd or Bhd
Membership Only individual owned.

Cannot have more than 20 members.

Cannot have corporate shareholder.

Any, can be individual owned or corporate owned up to a maximum of 50 members.
Option not to file audited accounts with CCM Allowed, provided the company is solvent. But audited accounts is still required to be prepared and tabled at the AGM.

Company need to file with CCM the annual return, Certificate By Exempt Private Company and Auditor’s Statement.

Not allow, must file audited accounts and annual return.
Loan to director Allowed but for the following purposes only

1.  to meet expenses incurred by the director for the purpose of  the company or to enable the director to perform his duties properly in the company;

2.  to purchase a house (for own occupation) if the director is under a full-time emplyment of the company or

3.  the director is under a full-time employment of the company and the loan provided to him is under the company’s approved loan scheme for employees of the company.

Not allow.
Loan to person connected with a director

Note : Person connected with director including spouse, child, adopted child or stepchild, parent, brother, sister and the spouse of his child, brother or sister and body corporate which is associated with that director

 

Allow only to the person connected with a director who is engaged in the full-time employment of a company for the purpose of meeting expenditure incurred or to be incurred in purchasing a house or the loan is under the company’s approved loan scheme for employees of the company.

 

accordance with a scheme for the making of loans to employees approved by the company in general meeting.

Note : This paragraph shall not apply to a company whose ordinary business includes the lending or money or the giving of guarantees in connection with loans made by other persons, if the activities of that company are regulated by any written law relating to banking, finance or insurance or are subject to supervision by Bank Negara Malaysia.

Not allow.

 

Note : This paragraph shall not apply to a company whose ordinary business includes the lending or money or the giving of guarantees in connection with loans made by other persons, if the activities of that company are regulated by any written law relating to banking, finance or insurance or are subject to supervision by Bank Negara Malaysia.

 

BANK ACCOUNT(S) OPENING

Different bank(s) will have different requirements as to the opening of bank account and some banks may even impose requirement on presence of physical office before processing your application for bank opening.

You are advised to visit the Bank to understand the bank account opening requirements and procedures. We will help to prepare the resolution for bank account opening, please furnish us the following information:-

i. Bank’s name, branch and address

ii. Type of account – e.g. current account, internet banking, foreign currency account etc.

iii. Sample/Format of opening account resolution as provided by bank

iv. Type of statutory forms and number of copies required by the bank (e.g. Form 24, Form 49, Memorandum and Articles of Association and etc.)

v. Authorised signatories details (name as per IC, IC number, designation (if not Company Director))

vi. Mode of operation (solely or jointly or etc.)

Once the company incorporated successfully (issuance of Form 9 by SSM), you could proceed with the application for bank account opening together with all the relevant documents required (such as resolution for bank account opening, certified true copy of authorisers’ IC/passport, statutory forms – M&A, Form 9, Form 24, Form 49 and etc.).

To expedite the bank account opening, there are some banks accept preincorporation submission of the application forms and verification of authorised signatories. Please consult your banker(s) accordingly.

Generally, banks in Malaysia require all the Directors/ Authorised Signatories to be physically present in Malaysia for the signing of official documentation at the time of opening of Bank account.

However, some banks accept documents that are signed in–person at one of their overseas branches or witnessed by a notary public. Additionally, the banks may require additional documents on a case-by-case basis.

Be forewarned that all banks in Malaysia must comply with stringent laws and regulations. They therefore will carry out a comprehensive series of checks and investigations on their potential clients before opening a new account for a company. This is not only to safeguard their risks against any potential default, but also are a part of their regulatory compliance and stringent anti-money-laundering policies. Thus, a company involved in dealings that are not above-board will not find it easy to engage in such transactions.

We highly recommend our clients to be present in Malaysia to open the bank account to avoid any delay. A bank always reserves the right to request the beneficial owner to be physically present prior to the approval of a bank account.

ANNUAL GENERAL MEETING & ANNUAL RETURN

The AGM is a formal meeting which is held once in every calendar year pursuant to Section 143(1) of the Companies Act, 1965. The First AGM must be held within eighteen (18) months of its incorporation, and thereafter not more than fifteen (15) months after the holding of the last preceding AGM. However, pursuant to Section 169(1) of the Companies Act, 1965 the company shall held the AGM within six (6) months from each of the financial year end.

In conclusion, AGM of the company shall be held pursuant to Sections 143(1) and 169(1) of the Companies Act, 1965 on the basis that whichever the earlier.

Sounds complicated? No worries, 3E Accounting as your Company Secretary will handle this for you. We will sending email alert(s) to remind you on the key deadlines and advise you the actions required. Please determine your Company’s financial year end and inform us so that we could remind you accordingly.

Pursuant to Section 165 of the Companies Act 1965, all the companies are required to lodge every year with the SSM. Its annual return which must be made up to the date of the Annual General Meeting (“AGM”) in the year or to a date not later than 14 days after the date of the AGM of the company. The Annual Return accompanies by a certificate and a list of members must be signed by a director or by the manager or secretary of the company and lodged with the CCM together with the Audited Financial Statements within one (1) months from the date of AGM.

No worries, 3E Accounting as your Company Secretary will handle this for you.

  1. The address of the registered office of the company.
  2. In a case in which the register of members is kept elsewhere than at the registered office, the address of the place where it is kept.
  3. A summary, distinguishing between shares issued for cash and shares issued as fully or partly paid up otherwise than in cash.
  4. Particulars of the total amount of the indebtedness of the company in respect of all charges which are required to be registered with the Registrar.
  5. Except in the case of a company to which section 166 applies a list as at the date of the return or as at such other date as the Registrar authorizes in the case of any company:-
    (a) containing the full names and addresses of all persons who on such date are members of the company;
    (b) stating the number of shares held by each member at the date of the list; and
    (c) if the names are not arranged in alphabetical order, having annexed thereto an index sufficient to enable the name of any person in the list to be easily found.
  6. Where the company has converted any of its shares into stock and given notice of the conversion to the Registrar, the list must give particulars as to the amount of stock or the number of stock units instead of the amount of shares.
  7. In the case of a company keeping a branch register:-
    (a) references in paragraphs 5 and 6 to particulars required shall be taken as not including any such particulars contained in the branch register, so far as copies of the entries containing those particulars are not received at the registered office of the company before the date of the list in question; and
    (b) where an annual return or a list of members is dated between the date when any entries are made in the branch register and the date when copies of those entries are received at the registered office of the company, the particulars contained in those entries, so far as relevant to an annual return, shall be included in the next or a subsequent annual return as may be appropriate having regard to the particulars included in that return with respect to the company’s register of members.
  8. All such particulars with respect to the persons who at the date of the return are, or, are deemed to be, directors of the company and any person who at that date is a manager or secretary of the company as are by this Act required to be contained in the register of directors managers and secretaries.
  9. Name and address of the auditor of the company.

 

CONTACT US

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