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LOCAL COMPANY INCORPORATION GUIDELINES

Incorporation of a Company in Malaysia
The two types of companies that can be incorporated under the Companies Act 1965 (CA 65) are:

     1.  A company limited by shares
     2.  An unlimited company


1. COMPANY LIMITED BY SHARES

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 two subscribers to the shares of the company (Section 14CA);
ii) A minimum of two directors (Section 122); 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.


A. Incorporation Procedures

1. Application of Name Search

A name search must be conducted to determine whether the proposed name of the company is available. Refer to Government Gazette No. 716 dated 30 January 1997, Gazette (Amendment) dated 11 October 2001, Guidelines for Naming A Company and Guidelines for Application of a Company Name. The steps involved are:
i) Completion and submission of Form 13AA CA (Request for Availability of Name) to SSM; and
ii) Payment of an RM30.00 fee for each name applied.
 
The Companies Act 1965 (the Act) provides that before a company or its change of name is registered, the Minister of Domestic Trade, Co-operatives and Consumerism or the Registrar of Companies must first approve the name or the new name of the company respectively accordingly.

Where the proposed company's name is approved by SSM, it shall be reserved for three months from the date of approval.
 
1.2       Lodgement of Incorporation Documents
 
Incorporation documents (as further explained in Part B below) must be submitted to SSM within 3 months from the date of approval of the company's name by SSM, failure or which a fresh application for a name search must be done. (Steps (i) and (ii) above shall have to be repeated).


B. Incorporation Documents to be lodged with SSM

1.2.1    Memorandum and Articles of Association

  •      The first directors and secretaries shall be named in the Memorandum and Articles of Association.
  •      The subscribers to the company’s shares shall sign the Memorandum and Articles of Association in front of a witness.
  •      Table A of the Fourth Schedule in the CA can be adopted as the Articles of Association of the company (Section 30 CA).

Note: For incorporation of a private company, the articles of association shall contain the following stipulations:


     i) Restriction on the right to transfer the company's shares;
     ii) Limitation on the number of members do not exceed fifty;
     iii) Prohibition to any invitation to the public to subscribe the shares/debentures of the company; and
     iv) Prohibition on public invitation to deposit money with the company.

1.2.2    Form 48A - Statutory Declaration by a Director or Promoter before Appointment


  The director or promoter must declares under oath that he/she is not a bankrupt; and he/she has not been convicted and imprisoned for the prescribed offences.

1.2.3    Form 6 - Declaration of Compliance


 This declaration states that all the requirements of the CA have been complied with. It must be signed by the COMPANY SECRETARY who handles the registration and is named in the Memorandum and Articles of Association.
 
 1.2.4   Additional documents

  • Original Form 13A.
  • A copy of the letter from SSM approving the name of the company.
  • A copy of the identity card of each director and company secretary.


C. Registration Fees

Each application for the incorporation of a company shall be accompanied with payment capital registration fee. The registration fees would be based on the company authorized capital.

AUTHORISED SHARE CAPITAL (RM)         FEES (RM)     
Up to 100,000      1,000
100,001 - 500,000      3,000
500,001 - 1 million       5,000
1,000,001 - 5 million      8,000
5,000,001 - 10 million     10,000
10,000,001 - 25 million      20,000
25,000,001 - 50 million        40,000
50,000,001 - 100 million      50,000
100,000,001 and above      70,000


D. Certificate of Corporation

A Certificate of Incorporation will be issued by SSM upon compliance with the incorporation procedures and submission of the duly completed Incorporation Documents.

Upon incorporation, the company is advised to obtain the required license/permit/approval from other relevant authorities prior to carrying on any business outlined in the Memorandum of Association.

2.     POST INCORPORATION

Upon incorporation of the company, the following documents must be submitted to the CCM within one (1) month from the date of incorporation:

  • Return of Allotment of Subscribers' Shares (Form 24);
  • Notice of Situation of Registered Office (Form 44); and
  • Return Giving Particulars in Register of Directors, Managers and Secretaries (Form 49);
  • The First Board Meeting of the Company shall be convened and held immediately after the Company has been duly incorporated.


3. SHARE CAPITAL

The minimum share capital during incorporation is as follows;

Authorised capital - minimum            :    100,000 shares comprises of 100,000 ordinary share of RM1.00 per shares
Paid up capital - minimum                 :     2.00 shares comprises of 2 ordinary share of RM1.00 per shares

Details of at least two subscribers during incorporation is as follows:

If subscriber is an individual Person If subscriber is a Corporation
  • Full name
  • Residential Address
  • Identity Card
  • No.(Colour)/Passport/
  • Citizenship No.
  • Nationality
  • Business Occupation
  • Number of shares taken by each subscriber.
  • Full name
  • Address of place of business
  • Company Registration 
  • No Local No.
  • Place of Incorporation
  • Business activities and
  • Number of shares taken by each subscriber.

 

Additional registration fee for an authorised share capital of more than RM100,000.


4. MEMORANDUM AND ARTICLES OF ASSOCIATION

The affairs of a company are governed by these documents. They contain two parts, with the first part being the memorandum of association and the second part the article of association.
 
The main object clauses of the memorandum of association are the nature of business intended to be carried out by the proposed company.
 
The articles of associate which constitute the internal regulations of a company usually contain clauses dealing with the under-mention matters.
 
We will charge a separate fee for our drafting of your M&A to suit your particular need if required. Our fee would be between RM150 to RM1,000 depending on the time spent on the job.


5. DIRECTORS

  • Full name and former name, (if any) (and its clear photocopy
  • Residential Address
  • Date of Birth
  • I.C. No. (Colour)/Passport/Citizenship No
  • Nationality/Race
  • Business Occupation

A limited company must have at least two directors at all time during the existence of the company. They must be a natural persons whose principal or only place of residence are in Malaysia. A resident need not be a Malaysian citizen. Details of at least two directors are as follows:

We will charge a separate fee for additional directors for preparation of the relevant documentation, statutory declaration and filling of documents with SSM . Our fee would be between RM50 to RM1,000 depending on the time spent and cost incurred on the job.

Section 132(1) of the Company Act states that a director must at all time act honestly and use reasonable diligence in the discharge of his duties. All directors are advise to read Table A (Art 73) of the company act on duties of a directors.

The directors of a company are responsible for ensuring that all such annual returns are lodged together with the accounts for each calendar year pursuant to sections 143, 165 and 169 of the Companies Act 1965.

6. COMPANY SECRETARY

A limited company must have at least one secretary at all time during the existence of the company. They must be a natural persons whose principal or only place of residence are in Malaysia to be appointed a Secretary of a company and who must be a qualified/ licensed Secretary under Section 139A of the Company Act.

A company secretary maintains all the statutory books and records, prepare the relevant resolutions, advise you on the requirements of all the statutes which concern to the relevant authorities. If a public listed company, we will make the relevant notifications to the Kuala Lumpur Stock Exchange and Securities Commission (if required). We will also advise you on the requirements for meetings and other procedures that you need to comply with. Foreign companies can also appoint us as their agent for the purpose of investing in the country. Other related secretarial services include changing the status of your company, striking off your company from the Register maintained by Companies Commission of Malaysia as well as other matters.


Act as a Company Secretary in compliance of Section 139A of the Companies Act, 1965.


When a company secretary fails to communicate  to all the directors at their last known residential address, the company secretary can lodge Form 48E to vacate his office. The vacation takes effect one month from the date of the notice.


We will charge a separate fee for the preparation of the relevant resolution, advice, attending board or shareholders meeting and sending notification. Our fee would be between RM50 to RM1,500 per assignment depending on the time spent on the job.


7. REGISTERED OFFICE

A limited company must have a registered office at all time during the existence of the company The registered office of the intended company where all official notices and correspondences will be sent to must be situated in Malaysia.

A separate fee for the registered office. Our fee would be between RM15 to RM150 per month.

8. CERTIFICATE OF INCORPORATION

Certificates of incorporation will be issued by SSM upon compliance with the incorporation procedures and submission of duly completed incorporation documents:

  • Form 8 – Certificate of Incorporation for a public company
  • Form 9 – Certificate of Incorporation for a private company

A company is advised to obtain the required license /permit /approval from other relevant authorities  before carrying on any business outlined in the Memorandum of Association.

9.  COMPANY ANNUAL RETURN

Pursuant to sections 143, 165 and 169 of the Companies Act 1965, the directors of a company are responsible for ensuring that the Company Annual Returns together with the audited accounts of the company are lodged with CCM for each calendar year.

The first Company Annual Return together with the audited accounts of the company must be lodged not later than eighteen months after the date of incorporation and subsequently not later than 6 months after the date of the company financial year.

RM150.00 filing fees on lodgement of Company Annual Rerurn by CCM. Heavy penalty will be imposed by CCM for non compliance.

10. AUDITED ACCOUNTS

Pursuant to sections 167 of the Companies Act 1965, the directors of a company are responsible for ensuring that the company keeps accounting records sufficient to explain the transaction of the company. The accounts should be sufficient to determine the financial position of the company and enable true and fair profit and loss accounts and balance sheets to be prepared suitable for audit. The records must be kept for at least seven years.


Every year the company must table at the company Annual General Meeting an Audited Accounts of the company before lodgement with CCM.

11.   AUDITOR

Under the Malaysian Company Act 1965 all limited company must appoint an Auditor for the company within three (3) months after incorporation. The first Auditor appointment is the responsibilities of the Directors and they hold office until the first general meeting at which the company audited accounts are considered.

An approved auditor is one who has the necessary qualification and has been granted approval to act as auditor by the Malaysian Minister of Finance.

Our panel of Auditor is Bahudin & Associates.

12. TAXATION

The Self Assessment System was introduced for companies from the year 2001. Under this system, the directors of a company are responsible to determine their own tax liability and make payment to the IRB.

Taxpayers have to determine their correct tax liability and make payments promptly. That does not mean that the IRB would not examine the return forms at all. A certain percentage of the return forms will be audited. It is very likely that IRB will audit those returns with a high probability of under declaration of taxable income or tax payable and those that are inherently of high risks to revenue.

Companies have to maintain a good record keeping system. This will help in verifying any claims made should the IRB require them to be produced or when the taxpayer are being audited.

A newly commenced company shall furnish an estimated tax payable within 3 months from the date of commencement and payments are made from the 6th month of the basis period.

Company newly commencing operation can furnish any amount that it deems reasonable as the estimated tax payable for that year of assessment so long as the variance between the actual tax and the estimated tax is not more than 30%.

An approved Tax agent is one who has the necessary qualification and has been granted approval to act as auditor by the Malaysian Ministry of Finance.

Our panel of Tax agent is Bahudin & Associates