Malaysia Hotline: +603- 2141 8908
In Malaysia, the most
common type of limited companies is those limited by shares. These companies
are incorporated and governed by the Companies Act, 1965. Companies limited by
shares will carry “Sdn Bhd”, “Sendirian Berhad” behind their names according to
Section 22(4) of the Act.
The meaning of private
limited companies is that the liabilities of its members are limited to the
amount of shares they hold in the company
A private limited company can only be incorporated if its
memorandum and articles:
- Restricts the right
to transfer its shares subject to the approval of its directors;
- Limits the numbers
of its members to not more than 50 (requires a minimum of 2 natural persons,
but allow another company to wholly own 100% of its issued shares).
- Prohibit any
invitation to the public to subscribe for any shares or debentures of the
company;
- Prohibits any
invitation to the public to deposit money with the company for fixed periods or
payable at call, with or without interest.
Advantages
- The most obvious
advantage is the liability "protection" to its shareholders, limited
their exposures to the amount of share capital that they subscribed for. Any
amount of debts beyond their shareholdings, they are not liable but provided
there is no fraud or other malpractice.
- Another advantage is
the simplicity to transfer existing shares or issue additional shares to new
investors. Existing member can transfer his shareholding, wholly or partially,
through selling of his shares (subject to directors’ approval, which is).
Unlike sole proprietors or partnerships, there is no need to wind up the
company in the event of death of its shareholders or directors.
Disadvantages
- The company's
financial affairs will be accessible by the public.
- Compliance with the
Companies Act, 1965. Although complying itself is not a disadvantage, the
amount of effort required to comply with the Act is much more than a sole
proprietor/partnership.
- The company had to
perform annual audits on its financial statements.
- At least one company
secretary is required to manage its statutory submissions and returns as well
as attending and preparing minutes for board and shareholders' meetings.
- Incorporation cost
is high, and there are yearly recurring fees to be paid such as audit,
accounting, company secretarial and tax fees.
Contact us
If you have further queries, please contact Tannet
24 hours Malaysia hotline：603-21418908;
24 hours Hong Kong hotline：852-27837818;
24 hours Hong Kong hotline：86-755- 36990589;
Email: mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my