Business Entity in Malaysia

There are three types of business entities in

Malaysia.
1. Sole Proprietorship
2. Partnership business
3. Limited company
Foreign Companies
Limited Liability partnership
 Sole Proprietorship
• Like Many other countries, Sole Proprietorship business
entity is owned solely by an individual as his or her
liability’s is unlimited.

ADVANTAGES
• Less paper work and no additional formalities.
• Price of entity formation is much cheaper and
is not required by the Malaysian government to be audited.
• Not required to disclose financial statement to the public.
• Easy to convert into limited company .
 Partnership
• The Partnership business entity is a joint
entity holder with two or more persons to
carry out a legal business in Malaysia. The
Company Commission of Malaysia requires
that Partnership entities must compromise of
at least two members and a maximum
twenty members. Partners in a Partnership
business entities are also bounded by
unlimited liability.
 Limited Company ( Sdn Bhd)
• Sendirian Berhad ( Sdn Bhd) is a private limited
company where it prohibits any invitation to the
public to subscribe any of its shares deposit,
money with the company for investment or
subscription. Minimum members in a private
limited company is 2 and maximum is 50.
• Berhad (BHD) is a public limited company where
its share can be offered to the public for fixed
period and any other forms for subscription.
• There are two types of limited
company in Malaysia .
1. Limited by share
2. Limited by Guarantee
 Foreign Company
• Foreigners ( non-Malaysian residents ) are
allowed to register a private limited company
in Malaysia, so long as 2 of the company’s
director are permanent resident of Malaysia.
• Foreign companies are those companies already
incorporated (formed) outside of Malaysia but set
up its business premises and operation in
Malaysia. There are two ways to go about being a
“foreign company”
 Requirements
 A certified copy of the certificate of incorporation or
registration from its country of registration.
 A certified copy of the company’s memorandum and
articles of association defining its rules and
regulation.
 A list of all the directors in the company ( foreign and
local) and list of their power.
 A statutory declaration made by the agent of the
company
 Registration fees.