Are clients bypassing you
because of your size? Are you ineligible to bid for many
contracts because your business is not incorporated with
Suruhanjaya Syarikat Malaysia (SSM/formerly ROC)? If so, you may
want to consider incorporating a company with Sendirian Berhad
Even if you are newly
starting a business, you should carefully evaluate your products
and clientele to decide if it may not be better to go straight
to Sendirian Berhad status than starting with a sole proprietor
No doubt a sole proprietor
or partnership is easier to handle in terms of administration
and may work out lower in terms of taxation and costs, but it
may end up hampering your business development when you want to
expand and take on bigger clients.
MAIN BENEFITS OF
SENDIRIAN BERHAD STATUS
Protection - a Sendirian Berhad company is a legal
entity separate from its individual members. That means that
your personal assets (existing and unrealised) are protected
from business losses in the event your business is unable to
repay its debts and/or is sued for a sum beyond its capacity for
repayment. In a Sendirian Berhad company, you are only liable to
the amount of the par value of your shares, or by guarantee
where your partners and your liability is restricted to the
amount each agrees to contribute to the assets of the company in
the event of dissolution or liquidation.
Existence and Better Recognition – as the setting-up,
maintenance and dissolution of a Sendirian Berhad company
requires much time and money to be spent on legal and
secretarial fees, Sendirian Berhads tend to last longer and be
more permanent than sole proprietorships. Also, a Sendirian
Berhad need not be dissolved on the death of a shareholder as
the shares will then pass on to the shareholder’s beneficiary.
government agencies and larger business entities prefer dealing
with Sendirian Berhads, especially on larger projects as the
permanence of a Sendirian Berhad structure offers relatively
more stability, continuity and protection.
– once a Sendirian Berhad registers its name with and has it
approved by Suruhanjaya Syarikat Malaysia (SSM), no other
company may take on that name for the period of your company’s
existence and for some time after its dissolution.
Options - in addition to taking out loans, cash may be
raised through the sale of stock to private buyers. At a later
stage, these shares may be offered to the public if the company
changes its status to limited or public limited company.
It is also the case that
Sendirian Berhads can usually obtain trade lines more easily
than sole proprietorships.
Streamlined Administration – company accounts have to
adhere to strict standards set by SSM. The company’s annual
audited profit and loss accounts as well as its balance sheet
have to be furnished to SSM who mount it into a database
accessible to the public.
All Sendirian Berhads are
legally bound to employ the services of an accredited Company
Secretary to assist in the registration of their companies, file
minutes of meetings and company resolutions, and audited company
accounts. These Company Secretaries in turn, adhere to standards
set by SSM, thus ensuring streamlined administration among all
Sendirian Berhads in Malaysia.
Multimedia Super Corridor (MSC) Status – although
Sendirian Berhads are charged 28% corporate tax in Malaysia,
they may apply for pioneer or MSC status. Pioneer status offers
100% exemption from taxable statutory income. This incentive is
granted in the first instance for a period of 5 years. MSC
companies may apply for Pioneer Status. They are also eligible
for a 100% Investment Tax Allowance (ITA), R&D grants (for
majority Malaysian ownership MSC-Status companies) and have the
freedom to source capital and borrow funds globally. Other
unique benefits include duty-free importation of multimedia
equipment (DFI) and access to a one-stop agency, Multimedia
Development Corporation (MDC), for licensing and other
OWNERSHIP AND CAPITAL REQUIREMENTS OF A SENDIRIAN BERHAD
A Sendirian Berhad must
have a minimum of two and a maximum of 50 shareholders. It must
have two directors at all times. A director must be a natural
person who has their principal or only place of residence within
In terms of capital, you
only need a minimum paid up capital of RM2 to start a Sendirian
Berhad. This amount can be raised as and when you deem
TAKING THE FIRST
To find out more about
regulations governing Sendirian Berhad companies, log onto
or consult a chartered company secretary.
If you do not know which
chartered company secretaries to approach, ask friends with
companies to give you some referrals.
Once you have your
shortlist, start calling and ask for more information. By their
responses, you will quickly know which ones are helpful,
professional, informative and to your liking. Arrange for an
appointment with 2 – 3 of these secretaries. Pick the one most
suited to your requirements and appoint them as your official
Company Formation fee
usually range between RM2300 to RM3500 [if all inclusive]
but our fee stand at RM1990 only.
Company Secretary fees for
a year range between RM1,500 to over RM5,000. This amount
sometimes includes annual audit fees as many Company Secretaries
tie-up with accountants to offer their service as a package. In
Malaysia, it is compulsory to use the services of a Company
Secretary who is licensed by SSM.
Through the Company Secretary, you must first make an
application to SSM to ascertain whether the intended name for
your company is available. If so, three months reservation of
the name is given from the date of approval. Within the three
months reservation period, you must submit documents such as the
Memorandum & Articles of Association, Form 6 and Form 48A
together with the registration fee to SSM.
The Statutory Declaration
Form 48A is required of each proposed director and subscriber of
the company. A company must have at least two directors named in
the Articles of Association of the company and two subscribers
to the Memorandum and Articles of Association of the proposed
company. In the Articles of the proposed company Form 6, at
least one secretary of a company shall be named.
SSM will issue a
certificate of incorporation upon registration.
Last but not least, you
may find it helpful to speak to friends who already own
Sendirian Berhad companies. As they would have gone through the
entire process, they would know what issues you should generally
be aware off and be able to offer relevant advice.
An article by Spire Media