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Learn more about Private Limited Company in Malaysia

A private limited company in Malaysia is a type of business structure that offers limited liability protection for its shareholders. This means that the personal assets of the shareholders are protected from any debts or liabilities incurred by the company. In order to register it, a minimum of two shareholders and one director are required. The company must also have a registered office address in Malaysia and a minimum paid-up capital of MYR 1 (Malaysian Ringgit). With Themis Partner, you can learn more about company registration and how to register your company. Once registered, it must comply with annual filing requirements, including the submission of financial statements and annual returns to the Companies Commission of Malaysia.

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How is a private limited company different from other business structures?

It is different from other business structures in Malaysia such as sole proprietorship or partnership as it limits the liability of shareholders to their share capital and allows for easy transfer of ownership through the sale of shares.

What are the requirements for registering a limited company?

The requirements for registering a private limited company in Malaysia include:

➤ The submission of a Memorandum and Articles of Association
➤ A Form 9 (Notice of Situation of Registered Office)
➤ A Form 24 (Particulars of Director, Manager or Secretary)
➤ A Form 44 (Particulars of Shares) to the Companies Commission of Malaysia (SSM)

Additionally, at least two shareholders and one director must be appointed, and at least RM1,000 must be paid as the authorised share capital. It is also mandatory to appoint a company secretary within 6 months from the date of incorporation, who must be a natural person and ordinarily resident in Malaysia. The proposed company name must also be approved by SSM before registration can be completed.

How many shareholders are allowed in a private limited company?

It must have at least two shareholders and a maximum of 50 shareholders. 

If a company has more than 50 shareholders, it will be considered as a public company and will have to comply with additional regulations such as holding an annual general meeting and appointing an auditor.

What are the responsibilities and liabilities of directors in Malaysia?

The directors of a private limited company are responsible for the overall management and direction of the company. They are also responsible for making sure that the company complies with all legal and regulatory requirements, as well as making sure that the company’s financials are accurate and up-to-date. Additionally, they have a fiduciary duty to act in the best interests of the company and its shareholders. In terms of liabilities, directors are personally liable for any wrongful or fraudulent acts or omissions committed by them while in office. They can also be held liable for any failure to file annual returns or comply with any other legal requirement under the Companies Act 1965. However, their liability is limited to the extent of the unpaid amount on the shares held by them.

How is the management and administration of a limited company structured?

The management and administration is structured through the Board of Directors, who are elected by the shareholders and have overall responsibility for the management and direction of the company. They are responsible for making strategic decisions and ensuring that the company complies with all legal and regulatory requirements. The day-to-day operations are usually managed by the company’s management team, which is typically headed by a managing director or chief executive officer. The company must appoint a company secretary within six months from the date of incorporation, who is responsible for ensuring that the company complies with its statutory obligations and keeping proper records of the company’s meetings and resolutions. They also assist the board of Directors in the efficient administration of a company.

What are the annual compliance requirements for a private limited company?

A private limited company in Malaysia must comply with a number of annual compliance requirements to maintain its good standing with the Companies Commission of Malaysia (SSM). These include:

1. Filing annual returns, which must be submitted within 42 days after the annual general meeting and should include financial statements, auditor’s report and details of shareholders and directors.

2. Holding an annual general meeting (AGM) within 18 months from the date of incorporation, and then once a year after that. The AGM should be held within the first 15 months of the financial year.

3. Filing the Form 49 which is a statement of particulars of the company’s directors, managers, company secretary and substantial shareholders if there is any changes from previous year.

4. Filing the Form 44 (Particulars of Shares) if there is any change of shares.

5. Keeping proper records of the company’s meetings and resolutions, and file the necessary returns with SSM.

What are the tax implications of operating a private limited company?

Operating a private limited company in Malaysia has various tax implications that the company and its shareholders should be aware of. Firstly, the company is subject to corporate income tax on its profits, which is currently set at a rate of 24%. The company may also be subject to withholding tax on certain types of income, such as dividends, rent, and royalties. Additionally, the company may be subject to sales and services tax, as well as other taxes such as real property gains tax, stamp duty, and import or export duties. The shareholders of the company are also subject to personal income tax on any dividends received from the company, and may also be subject to capital gains tax on the sale of their shares. It’s worth noting that Malaysia has a Double Taxation Agreement (DTA) with many countries, this means that the income earned by a foreign company in Malaysia may be taxed in Malaysia but also in their home country, but the DTA will ensure that the same income is not taxed twice.

How can a private limited company be dissolved or wound up?

A private limited company in Malaysia can be dissolved or wound up in several ways:

1. Voluntary Winding-up: The company’s shareholders may pass a special resolution to voluntarily wind up the company. This process is initiated by the directors or shareholders and require the approval of at least 75% of the shareholders.

2. Compulsory Winding-up: The company may be wound up by the court if it fails to comply with any legal or regulatory requirements, or if it is unable to pay its debts.

3. Creditor’s Winding-up: A creditor of the company may apply to the court to wind up the company if the company is unable to pay its debts.

4. Strike-off: The company may be struck off from the register of companies by the Companies Commission of Malaysia (SSM) if it fails to file its annual returns for 2 consecutive years.

In all the cases, the winding-up process involves appointing a liquidator, who is responsible for collecting and selling the company’s assets, paying off its debts and distributing any remaining assets to the shareholders.

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