INCORPORATION OF COMPANY IN MALAYSIA

The Companies Act 2016 (“CA 2016”) came into force on 31 January 2017, providing easier incorporation of companies compared to the previous Companies Act 1965. Under the CA 2016, a company can be incorporated by a single shareholder, allowing that shareholder to have complete control over the company while still enjoying the separate liability of the corporate entity. This makes it more attractive for businesses, entrepreneurs and business owners to incorporate a company in Malaysia.

They are several types of companies that can be incorporated under the CA 2016:

1.        Company limited by shares;

2.        Company limited by guarantee; or

3.        Unlimited company.


A company limited by shares can be either a private company or a public company. In Malaysia, most business owners prefer to incorporate private limited companies or public limited companies. The minimum requirements that you should know before incorporation are described below:

Requirements

Private Limited Company

Public Limited Company

Number of Shareholders

Minimum one (1) and maximum fifty (50), either individual or corporate shareholders

Minimum one (1) and no maximum limit, either individual or corporate shareholders

Number of Shares

One (1) or more

One (1) or more

Minimum paid-up capital

RM1.00

RM1.00

Number of Directors

At least one (1) 

Minimum two (2)

Age of Directors

At least eighteen (18) years old

At least eighteen (18) years old

Residency of Directors

Ordinarily resides in Malaysia by having a principal place of residence in Malaysia (At least 1 director shall fulfil this requirement)

Ordinarily resides in Malaysia by having a principal place of residence in Malaysia (At least 2 directors shall fulfil this requirement)

Dual Role of Director and Shareholder

The same individual person can be a shareholder and a director of the company

The same individual person can be a shareholder and a director of the company

Number of Qualified Company Secretaries

Minimum one (1) qualified company secretary, who is at least eighteen (18) years old and is a citizen or permanent resident in Malaysia

Minimum one (1) qualified company secretary, who is at least eighteen (18) years old and is a citizen or permanent resident in Malaysia

Appointment of Company Secretary

Within 30 days from the date of incorporation

Within 30 days from the date of incorporation

Consent to Act

Both director(s) and company secretary shall give their consent to act as director(s) and company secretary, respectively

Both directors and company secretary shall give their consent to act as directors and company secretary, respectively

Statutory Declaration of Compliance with the CA 2016

Promoter(s), director(s) and company secretary

Promoter(s), directors and company secretary

Nature of Business

To provide one (1) to three (3) lawful business activities

To provide one (1) to three (3) lawful business activities

MSIC Code

The MSIC code shall represent the nature of company’s business

The MSIC code shall represent the nature of company’s business

Proposed Name of Company

Subject to the approval of Companies Commission of Malaysia. If approved, the name will be reserved for thirty (30) days (with a maximum extension up to one hundred eighty (180) days)

Subject to the approval of Companies Commission of Malaysia. If approved, the name will be reserved for thirty (30) days (with a maximum extension up to one hundred eighty (180) days)

Particulars of Shareholders

Full name, identity number, nationality, residential address, race, email address, number of ordinary shares, and price per share

Full name, identity number, nationality, residential address, race, email address, number of ordinary shares, and price per share

Particulars of Directors

Full name, identity number, nationality, residential address, race, and email address.

Full name, identity number, nationality, residential address, race, and email address.

Registered Office

Must be in Malaysia and open and accessible to the public during ordinary business hours

Must be in Malaysia and open and accessible to the public during ordinary business hours

Constitution

Optional, but can be adopted after incorporation of company

Optional, but can be adopted after incorporation of company


In addition to enjoying limited liability status, both private and public limited companies are obligated to adhere to the provisions outlined in the CA 2016. This legislation provides a structured framework that encompasses various requirements for the establishment, management, and dissolution of a company. These requirements cover vital aspects such as the maintenance, preparation, and auditing of financial statements, as well as other corporate governance provisions including disclosures, conflict resolution protocols, and reporting obligations as stipulated in the CA 2016. As a result, operating a business as a private or public limited company instills a higher level of credibility in the eyes of the stakeholders due to the assurance and compliance demanded by law.

At YYC, we offer professional guidance and advice throughout the entire pre and post-incorporation process to assist you in efficiently incorporating your company.


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