Starting a business in Malaysia

In Malaysia, the Companies Commission of Malaysia (SSM) is an agency to register business and provide information to public “how to starting a business in Malaysia. ”

All the choices you make when starting a business, the most important is the type of legal structure you select for your business. Of all this decision have an impact on how much you pay in taxes, it will affect the amount of paperwork your business is required to do, your ability to raise money and the personal liability you face .

Types of Business Entities
The type of business entity you choose to set up for your business will depend on three primary factors: liability, taxation and record-keeping.

Business Entity may be classified into following three basic types:-

i) Business Firm

ii) Registered Company

iii) Limited Liability Partnership (LLP)

There are two types of business firm

a) Sole proprietorship (one-person ownership)

a) Partnership (more than one ownership) -Not legal entities and do not have legal status 

A company limited by shares is incorporated under the Companies Act 2016:
– A company having a share capital may be incorporated as a private company
(identified through the words ‘Sendirian Berhad’ or ‘Sdn. Bhd.’ appearing
together with the company’s name) or public company ‘Berhad’ or ‘Bhd’ appearing
together with the company’s name).

The requirements to form a company are:

(i) A minimum of one subscriber to the share of the company;
(ii) A minimum of one director; and
(iii) A company secretary who can be either : An individual who is a member of a professional body prescribes by the
Minister of Domestic Trade Cooperative and Consumerism; or An individual licensed by the Companies Commission of Malaysia (SSM)

Both the director and company secretary shall have their principal or only place or
residence within Malaysia.

Under the Limited Liability Partnerships Act 2012 which combines the characteristics
of a company and a conventional partnership.

In an LLP, all partners have a form of limited liability for each individual’s
protection within the partnership, similar to that of the shareholders of a
corporation.

However, unlike corporate shareholders, the partners have the
right to manage the business directly. An LLP also limits the personal
liability of a partner for the errors, omissions, incompetence, or negligence
of the LLP’s employees or other agents.

Upon incorporation, the company or business entities as abovementioned is advised to obtain the required license/permit/approval from other relevant authorities prior to carrying on any business in Malaysia.