Type of Business Entities in Malaysia

The basics of setting up a business entity in Malaysia isn’t so difficult to understand: First off, let’s start with Types of Business Entities.

There are three (3) different types of business entities to choose from:

1. Sole Proprietorship (also known as Sole Trader)
2. Partnership business entity
3. Limited Company (SDN. BHD. or Sendirian Berhad or BHD. or Berhad)

Understanding different types of business entities available in Malaysia for:

1. Foreign Companies
2. Limited Liability Partnership (LLP) – Coming soon

Sole Proprietor (or Sole Trader)

Like many other countries out there, the Sole Proprietorship business entity in Malaysia is owned solely by one individual, as his/her liability is unlimited. What unlimited liability means is: If a business fails or is declared bankrupt, creditors can sue the sole proprietor’s owner for all debts owed to respective merchants. This means personal assets, personal income and employment income are all liable.

Advantages of a Sole Proprietorship Business Entity

- Less paperwork & additional formalities (registration is easy, fast and fewer documents are needed).
- Price of entity formation is much cheaper and is not required by the Malaysian government to be audited.
- Not required to disclose financial statements to the public.
- Easy to convert into limited company (SDN BHD)

Partnerships

The “Partnership” business entity is a joint-entity holder with two or more persons to carry out a legal business in Malaysia. The Companies Commission of Malaysia requires that partnership entities MUST comprise of at least two (2) members and a maximum twenty (20) members.

Partners in a partnership business entities are also bounded by unlimited liability.

Differences

Generally, the Sole Proprietorship & Partnership business entity is similar to each other in many ways. Some of the differences include:

1. Own partnership agreements are to be made – Or set to default, governed by Malaysia’s Partnership Act 1961.

2. Sole Proprietors are owned by ONE (1) owner whereas Partnerships are owned by TWO (2) or more.

Limited Company (SDN BHD or BHD)

Sendirian Berhad (SDN BHD) is a private limited company, where it prohibits any invitation to the public to subscribe to any of its shares, deposit money with the company for investment or subscription. Minimum members in a private limited company is TWO (2) and maximum is FIFTY (50).

Berhad (BHD) is a public limited company where its shares can be offered to the public for fixed periods and any other forms of subscription. The minimum amount of members’ (shareholders) are TWO (2) and maximum of unlimited amount of members.

There are three (3) types of limited companies in Malaysia:
1. Limited by Shares
2. Limited by Guarantee
3. Unlimited company with/without share capital

Companies Limited by Shares

Liability of members’ contribution to this company is limited to the amount specified on their unpaid shares. Should the company becomes insolvent or goes into liquidation, members are not obligated to pay off the company’s debts if and unless any one of the members gives a personal guarantee.

Also, members’ personal assets, employment and personal income are not liable to any of the company’s debts. This type of business entity is the most common one in Malaysia.

Companies Limited by Guarantee

In a limited company’s Memorandum and Articles of Association, members’ liability is limited to the amount they ‘guarantee’ or undertake during winding up – In which the amount is specified in the Memorandum, agreed and signed by all members.

In many cases, companies limited by guarantee are often registered by non-profit organizations, public societies and clubs.

Unlimited Companies

Unlimited companies are no different from sole proprietorship and partnership business entities. One of the only difference is that they have a special articles of association and are free to return capital to its members’.

Advantages & Disadvantages

- Members’ (also called “Shareholders”) are not liable for the company’s debts beyond the amount of share capital they’ve subscribed to.
- But in this case, the public will have access to financial affairs of the company.
- In event of death or changes among shareholders and/or directors of the company, it need not be winded up (striked-off).
- Every limited company has to appoint: (1) Auditors to verify & report financial affairs, records, accounts and statements; (2) Must have at least a company secretary for AGM, board & shareholders’ meetings.

Foreign Companies

Foreigners (non-Malaysian residents) are allowed to register a private limited company in Malaysia, so long as TWO (2) of the company’s directors are permanent (principal place of residence) residents in Malaysia.

Foreign companies are companies ALREADY incorporated (formed) outside of Malaysia but set up its business premises and operations in Malaysia. There are two ways to go about being a ‘foreign company’ in Malaysia:

Register a branch in Malaysia, or; Incorporate a local company (see “Requirements” below)

Requirements

The registration process and documents to be filled in (with payable fees) are as common:
1. A certified copy of the certificate of incorporation OR registration from its country of registration.
2. A certified copy of the company’s memorandum and articles of association, charter, statute defining its constitution.
3. A list of all directors in the company (foreign and local) and list of their powers.
4. A memorandum of appointment or power of attorney under the seal of the foreign   company wanting to incorporate in Malaysia to authorize a Malaysian resident to    accept on behalf of the company its service of processed and noticed required to be   served on the company.
5. A statutory declaration made by the agent of a company (you can get an authorized local Malaysian company secretary here)
6. Registration fees.

Foreign Company’s Local Agent

Companies in Malaysia are governed under Malaysia’s Companies Act of 1965. The agent’s duties and responsibilities include ensuring the company is performing all corrective acts and requirements stated by the Companies Commission of Malaysia (or referred to as CCM and/or SSM).

Limited Liability Partnership (LLP)

The Limited Liability Partnership (LLP) business entity was proposed in 2003, but have yet to be fully implemented by the Companies Commission of Malaysia (”CCM” in English or “SSM” in Malay).

馬來西亞的業務實體類型

基礎知識設立一個商業實體在馬來西亞有什麼難的理解：首先，讓我們先從類型的實體企業。

有三（3）不同類型的商業實體可供選擇：

1。獨資（也稱為獨資經營者）
2。合夥企業實體
3。有限責任公司（SDN.BHD或Sendirian Berhad公司。BHD或Berhad公司）

了解不同類型的商業實體可在馬來西亞：

1。外國公司
2。有限責任合夥（LLP公司） - 即將推出

獨資東主（或獨資經營者）

許多其他國家一樣在那裡，個人獨資企業實體在馬來西亞擁有完全由一個人，因為他/她的責任是無限的。什麼是無限責任，是指：如果一個生意失敗或者被宣告破產的，債權人可以起訴獨資經營的業主拖欠的所有債務有關商戶。這意味著個人資產，個人收入和就業的收入都有涉及。

優勢 - 獨資業務實體

- 減少文書工作及額外手續（報名方便，快捷，減少文

  件需要）。
- 價格形成實體要便宜的多和是不需要在馬來西亞進行審核。
- 無需披露財務會計報告給公眾。
- 容易轉換成有限責任公司（SDN BHD公司）

夥伴關係

“夥伴”的經營實體，是一家實體持有人有兩個或更多的人開展法律業務在馬來西亞。馬來西亞公司委員會的規定，合夥實體必須包括至少兩（2）名成員，最大二十（20）的成員。

合夥人在合夥企業中實體是無限的責任。

差異

一般來說，個人獨資和合夥經營實體是彼此相似，在許多方面。一些差異包括：

1。自己的夥伴關係協定是作出 - 或者設置為默認情況

     下，受馬來西亞的夥伴關係法案1961。

2。個體戶擁有一（1）所有者，而夥伴關係是由兩個

   （2）或更高。

有限責任公司（SDN BHD公司或補陽）

有限公司（SDN BHD公司）是一家私營有限責任公司，它禁止任何邀請公眾人士認購其任何股份，存款與本公司投資或認購。最小成員在私營有限責任公司是兩個（2）和最大為五十（50）。

有限公司（BHD）有限責任公司是一家上市公司股票的地方，可向公眾提供固定期限和任何其他形式的認購。最低金額成員（股東）兩（2）和最高的無限量的成員。

有三（3）類型有限公司在馬來西亞：
1。通過股份有限
2。擔保有限責任
3。無限公司有/無股本

股份公司

責任委員的貢獻，這家公司是有限的數額上指定其未繳股。如果公司破產或進入清算，成員沒有義務償還公司的債務，如果除非任何一個成員提供個人擔保。

另外，成員的個人資產，就業和個人收入都沒有責任償付任何公司的債務。這種類型的企業實體是最常見的一種在馬來西亞。

公司擔保有限公司

在有限責任公司的組織章程大綱及章程，成員的責任是有限的數額他們'保證'或進行清盤時 - 其中數額在備忘錄中規定，達成並簽署的所有成員。

在許多情況下，擔保有限責任公司的註冊往往是由非盈利組織，公共社團和俱樂部。

無限公司

無限公司並無不同，獨資企業和合夥企業實體。唯一的區別之一是，他們有一個特殊的組織章程和資本可以自由地返回到其成員。

優勢與劣勢

- 會員（也稱為“股東”）概不負責為公司的債務數額

   超出了他們的股本已訂閱。
- 但在這種情況下，市民將有機會獲得金融事務的公

   司。
- 在事件中死亡或變更股東及/或董事的公司，它不需

   要審結（刪除線斷）。
- 每個有限責任公司已委任：（1）核數師查核與財務

  會計報告，記錄，帳目和報表;（2）必須至少有一個

公司秘書在年度股東大會，董事會和股東大會。

外國公司

外國人（非馬來西亞居民）都可以註冊一個私營有限責任公司在馬來西亞，只要兩（2）個公司的董事是永久性的（主要居住地）居民在馬來西亞。

外國公司已經註冊成立的公司（形成）以外的馬來西亞，但其營業場所設立和運作在馬來西亞。有兩種方法去大約是一個外國公司在馬來西亞：
登記部門在馬來西亞，或;納入當地的一家公司（見“要求”下）

要求

註冊工作，並填寫文件（與支付的費用）為共同的特點：
1. 核證副本的登記註冊證書或從該國登記。
2. 中的核證副本公司的組織章程大綱及章程，章程，

    章程規定其憲法。
3. 一個列出所有董事於本公司（外國和本地），並列

   出他們的權力。
4. 一份備忘錄委任或授權委託書下章，外國公司想在

   馬來西亞納入授權馬來西亞常駐代表接受其服務的
   公司處理，並注意到須送達該公司。
5。所作的法定聲明，代理人的公司（你可以得到一個

     授權在這裡的馬來西亞公司秘書）
6。登記費。

外國公司的本地代理

公司在馬來西亞，須受馬來西亞 1965年公司法。代理人的職責包括確保公司正在執行的所有行為，並要求糾正所指出的馬來西亞公司委員會（或簡稱 CCM和/或SSM）。

有限責任合夥（LLP公司）

有限責任合夥（LLP公司）的業務實體在2003年提出，但尚未得到馬來西亞公司委員會（“CCM”的英文或“SSM”在馬來語）充分的實施。