The Complete Guide to Registering a Sdn Bhd in Malaysia

Starting a new business in Malaysia can be an exciting venture, and one of the crucial decisions you need to make is whether to register as a Sdn Bhd or sole proprietorship company. While many businesses start as sole proprietorships and later transition to Sdn Bhd, it is also possible to register as an Sdn Bhd company from the beginning.

This comprehensive guide focuses on how to register Sdn Bhd, detailing the process of registering a Sdn Bhd company in Malaysia with all necessary information and requirements.

Eligibility to Register a Sdn Bhd Company

Before you begin the registration, it’s important to ensure that you meet the eligibility criteria. To register a Sdn Bhd company, you need to fulfil the following requirements:

• The person must be at least 18 years old.
• You must be a resident of Malaysia.
• You must not be disqualified under Section 198 of the Companies Act 2016.

Additionally, you need a minimum of one director and one shareholder to incorporate the company.

Information and Documents to Prepare Before Register a Sdn Bhd

To ensure a smooth registration process, it’s important to prepare the necessary information and documents in advance. Here’s a list of what you’ll need to register a Sdn Bhd:

1. Proposed company name(s)
2. Business nature and description
3. Business address and registered address
4. Information of directors and shareholders
5. Paid-up capital

In addition to the above, there are two documents that you need to prepare to register a Sdn Bhd:

1. IC (identity card) for identity verification purposes.
2. Authorisation letter (if your proposed company name contains controlled words or trademarks).

Register Sdn Bhd through the MyCoID Portal

To register a Sdn Bhd for your company, you should use the MyCoID portal, which enables you to handle the process independently. Here’s a step-by-step guide:

Step 1: Account Registration on the MyCoID Portal

Start by registering an account on the MyCoID portal as an individual user. Fill in the required details and follow the instructions provided.

Step 2: Account Activation at the SSM Counter

After registering your account, you will receive an email with instructions to validate your registration at the nearest SSM counter. Visit the counter and complete the activation process.

Step 3: Login Credentials Received Through Email

Once your account is activated, you will receive another email containing login credentials for the MyCoID portal. Create your login credentials and proceed to the next step.

Step 4: Proposed Company Name Search

Go to the Direct Incorporation Application on the MyCoID portal homepage and perform a name search for your proposed company name. Ensure that the name is available and has not been taken or reserved by another entity.

Step 5: Enter Other Information under Name Search

When you register a Sdn Bhd, in the name search section of the process, ensure you select “N – NEW INCORPORATION” as the purpose, “S – LIMITED BY SHARES” as the type, and “SDN. BHD.” as the company subtype. These choices are crucial for the register Sdn Bhd process.

Step 6: Clarify Your Proposed Company Name in the Super Form

You will be redirected to the Super Form, where you need to provide an explanation of the meaning behind your proposed company name. If the name contains controlled words, trademarks, or names of states, attach the necessary authorisation letters.

Step 7: Business Code Selection and Description

Select a business code that corresponds to your company’s activities. Provide a description of your business, along with the registered address and business address.

Step 8: Directors and Shareholders Information

By default, you will be listed as a director and shareholder of the company. If there are additional directors or shareholders, add their information in this section. Also, indicate whether your company has employees.

Step 9: Application Submission

Review the information on the preview page and submit your application. You will be redirected to the Transaction page.

Step 10: Payment of Incorporation Fee

Pay the incorporation fee of RM1,010 (inclusive of tax) through the MyCoID portal. Keep the transaction receipt for reference.

Step 11: Notice of Registration Received Through Email

Within one business day, you will receive the Notice of Registration through email, confirming that your company has been successfully incorporated. If needed, you can purchase a Certificate of Incorporation with a prescribed fee.

Note: You will receive an email notification if your application is queried by the SSM. In such cases, you can edit and resubmit your application.

Register Sdn Bhd in Malaysia: Understanding the Benefits

Register Sdn Bhd for Limited Liability Protection

By registering your company as an Sdn Bhd, you’ll enjoy limited liability protection, which means that your personal assets will be separate from those of your business. This ensures that you are not personally liable for any business debts or legal issues. In the event that your company faces financial difficulties or legal disputes, your personal assets, such as your home or savings, will be protected. This is an invaluable benefit that gives you peace of mind and allows you to focus on growing your business without the fear of personal financial ruin.

Separate Legal Entity

When you register your company as an Sdn Bhd, it becomes a separate legal entity. This means that it has its own rights, obligations, and legal existence independent of its shareholders or directors. The company can enter into contracts, own property, and sue or be sued in its own name. This separation of legal entity provides a clear distinction between your personal affairs and the affairs of your business. It ensures that the company’s liabilities and obligations are separate from your personal ones, reducing your personal risk and exposure.

Tax Benefits and Incentives

Registering as an Sdn Bhd also brings with it certain tax benefits and incentives. In Malaysia, Sdn Bhd companies enjoy a lower corporate tax rate compared to sole proprietorships and partnerships. The current corporate tax rate for Sdn Bhd companies is 24%.

Additionally, the government offers various tax incentives and exemptions to registered companies, especially those involved in specific industries or activities. For example, companies in the agricultural, hotel and tourism, manufacturing or other industrial or commercial sectors that participate in a promoted activity or produce a promoted product are eligible for either the pioneer status (PS) or investment tax allowance (ITA).

Should You Register a Sdn Bhd Yourself or Use a Company Incorporation Service?

While it is possible to register a Sdn Bhd company on your own, there are several factors to consider before making a decision. Here are some points to keep in mind:

1. Time and Energy: Registering a MyCoID account and going through the entire incorporation process can be time-consuming and require a significant amount of energy. If you choose to do it yourself, you’ll need to visit the SSM counter for identity validation and familiarise yourself with the guidelines on naming your company and determining the business nature. Engaging a company that offers company incorporation can save you time and energy, as they can provide guidance on selecting a company name and other relevant information.
2. Lack of Information: Registering a Sdn Bhd for the first time can be overwhelming, especially if you’re unfamiliar with the process. You may have questions about the initial paid-up capital, adding directors or shareholders, and mandatory compliance. A company incorporation service can provide expert advice and clear up any doubts you may have, either through a phone call or an in-person meeting. Seeking professional consultation ensures a smoother company incorporation process.
3. Mandatory Requirement for a Company Secretary: It is mandatory for every Sdn Bhd company in Malaysia to appoint a company secretary within 30 days of incorporation. The company secretary shall be registered with SSM and possess a valid practising certificate issued by SSM. Engaging a company secretary from the beginning of the registration for Sdn Bhd can save you the hassle of validating your MyCoID account on your own.

Conclusion

Incorporating an Sdn Bhd company in Malaysia offers numerous advantages, including access to a strong economy, government incentives, a skilled workforce, and a favourable business environment. By following the step-by-step process outlined in this guide, you can successfully incorporate your company and embark on your entrepreneurial journey. Whether you choose to incorporate independently through the MyCoID portal or engage a company like Grof ensure that you fulfil all the necessary requirements and comply with the regulations set by the Companies Commission of Malaysia. Taking these steps will set you on the path to business success in Malaysia.