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Accountants and Business Consultants

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Business Registration & Incorporation of Private, Public and Foreign Companies

Yes. Section 196(4) of Companies Act 2016 stated that, in order to incorporate a company, there must be at least one director who ordinarily resides in Malaysia by having a principal place of residence in Malaysia (‘resident director’) and exclude an alternate or substitute director. The requirement of residency is mainly to ensure that there is a point of contact in Malaysia and for purposes of enforcement. While, according to Section 42(1)(b) of Companies Act 2016, there must be at least one and not more than 50 shareholders being appointed as members of the company regardless of the citizenship of the person.

The appointment of a company secretary at the point of incorporation is optional. Under section 236 of the Companies Act 2016, the Board must appoint a company secretary within 30 days from the date of incorporation of a company.

Yes. According to Section 235(1) of Companies Act 2016, a company shall have at least one secretary who shall be a natural person, aged 18 years and above, and a Malaysian citizen or permanent resident.

The super form is an electronic template which will replace the various form currently required for incorporation process (i.e. Form 6, Form 48A and M&A under the previous Companies Act 1965). Section 14 of the Companies Act 2016 provides for the incorporation process, amongst others, a person is required to provide a set of information as such as name of proposed company, status of private or public company, nature of business, proposed registered address and details of the proposed directors, members & company secretary.

Yes, this have been mentioned in Section 9 & Section 42(1)(b) of Companies Act 2016, where it must be at least one and not more than 50 shareholders being appointed as members of the company regardless of the citizenship of the person.

Under section 619(3) of the Companies Act 2016, for existing companies already registered under the previous law, their M&A remains valid and enforceable under the Companies Act 2016, unless otherwise resolved by the company. The company may decide whether to revoke entirely the Constitution or amend certain clauses. If the existing company decides to revoke the existing M&A and NOT to have a specific constitution, the company must pass a resolution to that effect. In that scenario, under section 31(3) of the Companies Act 2016, the company, each director and member shall have the rights, powers, duties and obligations as set out in the Companies Act 2016. Similarly, a company must also pass a resolution to amend any part of its Constitution should the company wish to harmonise its Constitution with the provisions of the Companies Act 2016. For example, a private company may want to amend provisions relating to minimum directorships from current 2 to 1.

The date of adoption shall be the date of resolution. Any dates other than the date of resolution will be disregarded.

Yes “service address” as defined under section 2 is linked to section 58 (similar to the previous Form 49 with additional info on service address). In this case the notification must be made to notify that the residential address and the service address are the same address. If there is a change in the name/residential/any prescribed particulars address these changes must be notified to SSM as well.

Yes, according to Section 259(1)(a), a private company shall lodge with the Registrar for each financial year the financial statements and reports within 30 thirty days from financial statements and reports are circulated to its members. While Section 68(1) stated that, a company shall lodge with the Registrar an annual return for each calendar year not later than thirty days from the anniversary of its incorporation date.

No. The submission of statutory documents relating to the directors or individuals who have been named on SSM’s blacklist will not allowed. Consequently, the statutory documents and the appointment of directors cannot be registered with SSM as long as directors or individuals concerned are still named on SSM’s blacklist. The directors or individuals concerned are advised to check their compound status via SSM for clarification on any issues on compliance and compound.

Foreign investors are only allowed to set up private limited companies, also called Sendirian Berhad (Sdn Bhd) companies. Only resident Malaysians are allowed to set up sole proprietor or public liability companies. However, a foreigner can register a 100% foreign owned business depending on the nature of business e.g. for retail, wholesale and distributive business natures, the 100% foreign ownership Sdn Bhd, company will be subjected to Ministry of Consumerism and Trade and only “unique” (businesses that local Malaysians do not have the knowledge or skills) business will be granted, this is to protect Malaysians opportunities and competitions. For some business nature, the paid capital would higher to meet the necessary requirement of the relevant authorities to issue the trade license or work permit for your business. 

A shareholder of a Company Limited by shares (Sdn Bhd), is not liable for the company’s obligations or liabilities. The liability of the shareholder is limited to any amount unpaid on the shares held by him in the event of winding up which been mentioned in Section 192 of Companies Act 2016.

Yes. Clients are advised to incorporate the Company with minimum statutory paid up capital – RM1 per share 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. This is because the secretary will assume that shareholders paid for the first subscription shares with cash (without asking payment proof).

A Name Search is an initial step to ensure that the desired company name is available. This is only a preliminary Name Search. Final approval of the name is granted by SSM upon review of Name Reservation Form. While Name Reservation is a process of submission a form to SSM for company name approval and reservation. Filing a name reservation will prevent another company from forming with that name.

  1. Proposed company’s name is similar to those existing ones and may cause confusion to the public (unless a consent letter is granted).
  2. Proposed company’s name is similar to the former name of existing company and may create undesirable confusion to the Public members.
  3. Proposed company’s name is prohibited by the Companies Act 2016 or any other relevant Acts.
  4. Proposed company’s name is undesired for use as company name, for example, Ekor Ayam Sdn Bhd.

Every company must appoint an auditor under Section 267 of Companies Act, 2016. 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 and at least 30 days before the end of the period for the submission of the first financial statements to the registrar to appoint a person or persons to be the auditor or auditors of the Company.

Once the company incorporated successfully (Notice of Registration will be issued by SSM), client could proceed with the application for bank account opening together with all the relevant documents required. To expedite the bank account opening, there are some banks accept pre-incorporation submission of the application forms and verification of authorised signatories. Different bank(s) will have different requirements as to the opening of bank account. The clients are advised to visit the Bank to understand the bank account opening requirements and procedures. The client needs to provide the following details to secretary for them to prepare the resolution for bank account opening:

  1. Bank’s name, branch and address
  2. Type of account – e.g. current account, internet banking, foreign currency account etc. (Sample/Format of opening account resolution as provided by bank)
  3. Authorised signatories’ details (name as per IC, IC number, designation [if not Company Director])
  4. Mode of operation signatory (either solely or jointly or etc.)

The person needs to inform the Board of Directors and the company secretary regarding bankruptcy status, then resign as a director and request the company secretary to update your resignation by lodgement of Notification of Change in The Register of Directors, Managers and Secretaries (Section 58) to CCM. Ensure the number of directors in the company which is at least 1 director for private company after the resignation. ​