Start, Manage, and Grow Your Business with Incorporate.my

This table provides a quick reference to the differences of entity types — sole proprietorship, partnership, Corporation (Sdn. Bhd.)

It is a fact that at any time starting a business is exciting, yet challenging. There are tremendous amount of hard work and sacrifices but the rewards could be potentially life changing.

We are honoured to be your partner in your journey of entrepreneuership. We help incorporating your company legally, lending support your businesses as they grow by providing on-going services, resources and advices.

We outline short guide for entrepreneurs and businessmen that will lay down help setting solid foundation in your business journey.

Business Startup Guide

The following is the most common checklist necessary to become a successful entrepreneur: -

1. Decide the most ideal legal form that your business will take
   
   The first step to starting a new business is to choose the right company structure. This will affect how much tax you pay, the amount of paperwork you will have to complete and your personal liability.
   
   These are the most common forms of legal business entities:
   
   
   1. A Sole Proprietorship / Partnership (limited to Malaysia Citizen)
      
      Sole-proprietor/partnership are not required to file annual accounts. New businesses tend to start off as sole proprietor/partnership as self employed with no staff as it is relatively cheap, quick and simple to set up.
      
      
      • All profits and liabilities belong to you/partners
      • Liability is unlimited (business debt can be pursued up to the owner/oartners' personal wealth)
      • Profits only are reported and taxed under personal tax filing/self assessed
      • Business expenses are tax deductible.
      
      
   2. A Private Limited Company (PLC)
      
      Unlike a sole-proprietor/partnership, all personal finances of the members are kept separate from PLC. PLC cannot offer share for sale to the public and can have members not exceeding 50.
      
      
      • PLC is responsible for all financial liabilities, Company directors and members are not responsible for any debts that a PLC should incur.
      • PLC pay corporate tax on their profits.
      • Company directors are taxed as employees.
      • Audited accounts and tax return must be submitted annually
      
      
   3. A Limited Liability Partnership (LLP)
      
      A combination of limited liability companies and traditional partnerships. In many ways an LLP is similar to a private company whilst having the flexibility of a traditional partnership.
      
      
      • Similar advantages of a limited company and partnership combined Set up as an ordinary partnership.
      • Liability is limited.
      • Profits only are reported and taxed under LLP tax filing.
      • Business expenses are tax deductible.
      
      
   Most businesses in Malaysia are private limited company (formation package)
   
   The different legal entities come with different characteristics (refer to Business Entity Wizard). It is very important to select the business entity that is most suitable to your business.
   
   
2. Incorporating Your Business Entity
   
   A private limited company is registered with Companies Commission of Malaysia with the help of Company Secretary in Malaysia.
   
   If you hire us to incorporate your company, after incorporation, a unique business registration number will be created that will allow you to start doing your businesses e.g. open a company bank account
   
   You can refer our incorporation packs that are created specifically for you (link).
   
   Main Consideration in Company Incorporation
   
   
   1. Choose a name
      
      It is a good idea to spend some time to decide on your Company Name. Your company name will give your business its identity. A company name is what potential buyers will notice first and getting the right impression with your business’ name will be important. Successful companies will also develop a brand around a good name.
      
      To choose a suitable business name, you can get ideas from the following:
      
      
      • Your company name must be unique. The Companies Commission of Malaysia do not allow duplicate or too similar to an existing company name.
      • All company names must feature the word ‘Sdn Bhd’ which carries meaning ‘Private Limited’ at the end.
      • Certain control words are not allowed/require prior approval.
      
      
   2. Deciding on your Company’s shareholders and directors
      
      You must appoint at least one company director/member.
      
      
      1. Requirements to be a company director include:
         
         
         • Minimum 18 years of age and must have at least one ordinarily reside/stay in Malaysia.
         • They have not been declared bankrupt
         • They have not been banned legally by court from being a company director
         • Personal details required (Name, Age, ccupation, service and residence address, contact etc)
         
         
      2. Requirements to be a company director include:
         
         
         • No minimum age for member/shareholder.
         • A company must have a minimum of 1 shareholder.
         • Company Shareholders can be directors.
         • Shares can also be held by other companies.
         • Details required for shareholder (Name, address, Number of shares, Value per share, contact)
         
         
3. Write a Business Plan
   
   Prepare a preliminary business plan. Set out your mission, vision, short-term and long-term goals, and demarcate your journey with key milestones that would enable you to track and monitor the progress of your company.
   
   A business plan is also useful for the company to furnish to banks/ other potential investors/ suppliers/ trade partners in order to secure loans and/or credit facilities, because it gives them the assurance that you have concrete plans that will result in viable economic activities.
   
   OVERVIEW OF YOUR BUSINESS
   
   What your business will do
   
   The services and products your business will provide
   
   How your customers will purchase or access your products or services. This could be from a shop, online via your website or by phone
   
   Your pricing structure
   
   YOUR IDENTIFIED CUSTOMER MARKET
   
   The age of your target market? Demographics, Lifestyles and where they live?
   
   What will they think of your product or service?
   
   What will make your product stand out?
   
   How will you market your business to them?
   
   
4. Raising Finance For Your New Company
   
   Whether needing to raise finance to start up your business, day to day working capital or long term capital projects such as buying machinery, you will want to know exactly where and what the money will be used for. There are many types of business financing available which include the following:
   
   
   • Personal finance
   • Loans
   • Leasing or contract hire
   • Credit from suppliers
   • Overdraft
   • Grants
   
   
5. Open the Company Bank Account
   
   Select a bank and open the company bank account. See here for Bank Accounts in Malaysia for your considerations on what bank to choose and what your requirements are.
   
   
6. Rent an Office, Warehouse or Retail Space
   
   You would ostensibly have already budgeted a large portion of your capital to the rental expenses (especially in Malaysia) when you plan your operations for the first few months.
   
   A general rule of thumb is that 3 months’ worth of rent is required for your very first payment— 2 month for the first month’s rent payable in advance + 1 month for the security deposit.
   
   
7. Obtain Licenses and Permits
   
   Depending on the type of business you are in, you may require a license or permit if your business is involved in: the advising on finance, investments, capital markets and/or other financial activities; the preparation of meat or food products; broadcasting and publishing; the sale of alcohol, tobacco or explosives, among others.
   
   The following also need licenses: building contractors, banks, insurance carriers, accountants, lawyers, real estate agents. Do consult us on whether your business requires additional licenses to operate.
   
   
8. Hire Employees (if applicable)
   
   If you intend to hire yourself or others as full or part-time employees of your company, then you will have to bear in mind labour laws of Malaysia, namely the Employment Act and its regulations. Additionally, you will be required to register under the various government authorities like the Employees Provident Fund, Socso, EIS etc.
   
   It is advisable to set up a system of processing payroll to your employees.
   
   
9. Set up an Accounting and Record-Keeping System
   
   Setup your Accounting and Record-keeping system in order to be able to easily comply with laws and regulations pertaining to taxes, filings and other submissions to the authorities.
   
   Company documents generally are required to be kept for a certain number of years, including: a list of key principals and their addresses, copies of all incorporation documents, financial statements, annual reports, amendments or changes to the company registers and such.
   
   
10. Develop your Business Identity and Establish Your Presence
    
    As you would have already bought your domain name after the initial stages of checking for your company name availability, the next step thereafter should be to hire a professional to develop and maintain your website.
    
    Additionally, create your letterhead, business cards, brochures and other collaterals and/or promotional materials for the marketing of your business. A professionally created logo can be extremely beneficial to your business in the long run, so do not hesitate to invest in the services of an established professional to be able to distinguish yourself from your competitors out there.
    
    Once you have all these, you can proceed to market your new company according to your focused business and marketing plans and propel the company to greater heights.
    
    

The Duties of Company Secretary

Under Section 235 (1) of the Companies Act 2016 (CA 2016), every company in Malaysia must have at least one qualified Company Secretary. The Company Secretary be tasked with various compliance matters required under the CA 2016. Some of the common duties are: -

1. Complying Statutory filing
2. Recording and Maintenance of Registers and Minutes
3. Preparation of Resolutions and Board Meetings
4. Advising on legal and compliance frameworks

As Company secretary, we strike to provide important support and value added to ensure your business smooth operation and consistent success by ensuring regulations compliance and protection of rights of various parties involved.

Company Secretary Services

Our Company Secretary Services help you to deal with the following:

• Annual statutory filing & compliance: -
  1. Circulation and adoption of accounts/AGM preparation
  2. Annual Return filing
  3. Provision of registered offices
  4. Keeping and maintaining of minute books
• Event Driven Company Secretarial Services: -
  1. Change of company name
  2. Change of Company Directors
  3. Change of business/branch address
  4. Transfer of shares
  5. Allotment of shares
  
  

We will fill in the various roles required of a company secretary, and advise the Board of Directors on all matters pertaining to the company.


Annual return filing
Annual return — due within 30 days from anniversary of the date of incorporation. This is a set of documents that indicate your company’s information.

Circulation and adoption of accounts/AGM preparation
This is a compulsory yearly procedure during which a company informs its shareholders about the financial situation and the shareholders issue a resolution of approval

Change of company name
Changing the existing to new company name, you must seek availability of the new name and file for the change with Companies Commission of Malaysia (CCM).

Change of Company Directors
You are required to report to SSM if there are appointment or resignation of directors.

Change of business/branch address
If you decide to change your company's business or branch address

Change of business activity
If you decide to change your company's business activity, CCM require the Company’s records be updated accordingly

Transfer of shares
Transfer of shares in a private limited company among existing or new shareholders — the Company must follow the transfer procedure when the existing shareholder sells shares to others.

Allotment of shares
Allotment of shares is a procedure of issuing shares to raise capital for business expansion or paying of debts.

Proposed Company Formation Name Approval

The proposed name of your Company must be approved by the Companies Commission of Malaysia prior to incorporation.

Business Activities

Brief description of principal business activities of the proposed Corporation.

Directors

A minimum of one director.

Foreigner is allowed to form single director company as long as he/she is ordinarily stay in Malaysia (note 1)

A director and shareholder can be the same or different person.

Note 1: Malaysia resident individual.i.e. a Malaysia Citizen, a Malaysia Permanent Resident, a person who has been issued an Employment Pass/Dependant's Pass. Any person above the age of 18 years may be appointed as a director. However, some individuals e.g. bankrupts, are disqualified from being directors.

Shareholders

A minimum of one shareholder and a maximum of 50 shareholders.

A shareholder can be an individual or corporate body.

100% foreign shareholding is allowed

Company Secretary

Company secretary must be a natural person residing in Malayia.

He /She must be qualified to act.

Our corporate secretary service provides this.

Paid-up Capital

Minimum paid-up capital of RM1 is required.

Registered address

The company must have a local address.

Registered office can be different from Business address.

P.O Box address is not allowed.

We provide registered office facilities.

Documents Required for Incorporation

Identity Card/Passport copies of proposed shareholders and directors with Residential address proof.

Contact details of directors & shareholders i.e. email & telephone number

Details of the parent company if the shareholder is a corporate entity

Corporate Bank Account Opening

We will assist you with opening corporate bank account opening for your Malaysia Company.

Obtain Business Licenses or Permits

Based on the type of business you plan to start up, you may or may not need a business license or permit to operate. If you need to apply for a business license, we can advise and assist you with the application filing process. The fees will depend on the specific type of license that you require as the complexities involved vary from license to license.

On-going and Annual Compliance Requirements

After the company has been incorporated, we can assist your company with on-going and annual compliance and filing requirements including accounting and corporate tax fling matters.

Information required for company incorporation: -

1. Company Name
   Choose a unique company name and check if it is available using our name search  and make sure to ignore keying in “Sdn Bhd” or “Private Limited” to start your company incorporation.


2. Company Type & Business Activity
   To provide the Company’s business activities.


3. Business Address, Contact No. and Email
   A business address cannot be a PO Box. and it will be available to the public and must be used on all company stationery and websites.


4. Director Information
   A director  is responsible for managing operations and overseeing the day-to-day running of a company. You company must have at least one director aged 18 years or older and provide the following information: full name, date of birth, nationality, occupation, service address, residential address and email. A verified copy of Identity card/passport is required.


5. Shareholder / Share Information
   A shareholder is owner of the Company but are not involved in the daily running of a company. Your Company must have at least one shareholder and provide the following information: full name, date of birth, nationality, occupation, service address, residential address & and email. A verified copy of Identity card/passport/Corporate Certificate is required.

Looking to Close Your Limited Company?

There may be occasions when the directors or shareholders of a company take the decision to close it down in a process called company winding up or striking it off from the register.

We are determined to make the process of closing your company simple and straightforward.

Before we can file for the Strike off, we will require information from you that certain statutory requirements have been met.

The Company must satisfy the following conditions for strike off application:-

• Must be dormant, ie. Ceased operations and dormant (must perform dormant account Audit prior to application).
• Has no bank account. Again, even if the company has bank accounts previously, all bank accounts have to be closed.
• Has no assets or liabilities. All assets would have been written off, and all liabilities have been settled or waived by the creditors, before the application.
• Does not have any charges in the Register of Charges. This means the company does not pledge any assets for financing or other commitments, free from encumbrances.
• Settled all penalties and compounds under the Companies Act 2016.
• Has no outstanding tax or other liabilities with government departments or agencies.
• Is not involved in any legal proceedings within or outside Malaysia.
• Is not a holding company of another corporate body.
• Did not guarantee or agreed to guarantee to make payment to any other third parties following a certain event or non-event.

What happens next?

When you have confirmed that all the above statutory requirements have been met and agreement has been reached to close the company by the directors and members, we will complete the appropriate documentation and submit once signed the directors and members of your company.

The process to strike the company off the Companies House register will then begin.

You can order this service directly from our website.

Immediate Steps after Company Incorporation

The following are the immediate actions to be taken by the Company after registration

1. Company documents
   Immediate after Companies Commission approves your company registration, we will send you an email with PDF copies of your incorporation documents. (Note: If we will post paper copies of these documents, if they are included with your incorporation package).
   
   
2. Keeping of company documents?
   You may keep the company documents electronically and Director(s) should keep Hard copies in a safe place.
   
   
3. Opening Bank Account in Company Name
   After incorporation of the Company, it is necessary to open a Current Account in the name of the Company with any  Bank in Malaysia. All the transactions in the name of the company should be transacted through the Company Bank Account only.
   The following are the documents and details required for opening. A Current Account with a bank:
   
   • Certificate of Incorporation of the Company
   • Notice of Registration of the Company
   • Board Resolution of Opening and operation of bank Account
   • Identity Details for Directors and Shareholders of the Company
   • Cheque for initial deposit of amount to Open Bank Account.
   
   Also, the details and documents and initial deposit may vary from bank to Bank.
   
   
4. Deposit of Capital
   The company shall deposit initial capital into the Company’s cash or bank account ((This deposit can be considered as the initial capital by the shareholder). Hence the share capital during company registration,must be deposited by the subscriber in the account of the company.
   
   
5. Books and Accounts of Company. 
   Every company must maintain its Books of Accounts of all accounting records including receipts payments as required under Companies Act 2016. The books of accounts and financial statements shall give a true and fair view of the state of the affairs of the company. For a proper accounting records, accounting transactions are best supported by Payment Voucher & Receipt Voucher together with third party’s bills/invoices These vouchers and supporting documents are the primary reference for each transactions. The books of account should be kept at its registered office or such other place in Malaysia as the Board of Directors may decide from to time. The books of account can be maintained in electronic mode subject to conditions under Companies Act. Every Company must close its first financial accounts within 18 months from incorporation.
   
   
6. Commencement of Business
   Company is allowed to start its intended business activities legally after incorporation date. 
   
   
7. Statutory Contributions – Employer & Employee
   Every Company employs staff in Malaysia must contribute the following: - i. Employees Provident Fund; ii.Social Security Organisation (SOCSO) Every company who employs employees with more than the specified limit of salary has to deduct the Tax from the salary of employee and pay to the Malaysia Inland Revenue Board on monthly basis.
   
   
8. Drafting documents
   Due to operational demands, the company is advised to set up its standard policies and procedures and enter into certain agreements. The agreements such as shareholders’ agreement, Non-disclosure agreement, terms and conditions for website usage, etc. are concerned agreements for any business. All these agreements are preferable to make the duties and responsilibities of various parties involved clear with reference to the company.
   
   
9. Exhibition of Company Name
   The company must display its name at the registered office of the company or wherever the company runs its business operations. At all business correspondences such as letters, invoices, receipts, publications, cheques, orders and memorandum of or purporting to be issued or signed by or on behalf of, the company, should have the Company name (whether or not it is carrying on business under a business name) & company registration number Wherever the company name is exhibited, it shall include “Sdn Bhd” which carries meaning of “Private Limited”
   
   
10. Appointment of First Auditors by Company
    The Board of Directors of the company is advised to appoint first auditors of the Company who holds a valid certificate of practice within 12 months from the date of registration of the company.
    
    
11. Trademark Registration
    Registering a Company or LLP with a name does not provide complete protection to the name or brand name. Company’s brand name or patent need protection should be protected from infringement and duplication to eliminate threats to brand value and market share from competitors or third parties. The brand name and logo should be registered to provide legal protection under the Malaysia Trademarks Act 2019.
    
    
12. Sales and Services Tax Registration
    Company that sells taxable goods or services with annual turnover exceeding RM500,000 is required to register under Sales and services Tax Act 2018 (SST). It is not mandatory to register SST immediately after incorporation of the Company. The Company can obtain this registration as and when required.