If you’re planning to set up a company in Malaysia, you need to register it as a Sdn Bhd. This business entity offers flexible ownership of shares, provides asset protection for shareholders and is more affordable compared to other companies.
To start a Sdn Bhd, you need to appoint a company secretary and comply with several requirements. These include appointing a corporate secretary licensed by SSM or a member of a prescribed professional body.
Getting Started
Starting a new business is an exciting time, but it also comes with a number of responsibilities and obligations. It is essential to know your options and weigh the pros and cons of a variety of different business types before making an informed decision on what will best suit your needs.
One such option is sdn bhd incorporation. Often referred to as the “big daddy” of all company types, this type of entity is a great way to establish your presence in the market and increase your brand value.
It has a lot of benefits, such as limited liability protection for shareholders and owners, unlimited life span when the owner dies or gets disabled, the ability to transfer ownership, and the ability to raise additional capital by selling shares to new investors. Additionally, it is often perceived as a more professional and legitimate entity than other types of companies such as sole proprietorships or conventional partnerships.
Taxes
A sdn bhd incorporation offers many benefits over sole proprietorships or partnerships. One of the most obvious advantages is that it protects a company’s owners and investors from personal liability for debts accumulated by their business.
The other advantage of this structure is that a company can continue to operate even after the death or retirement of its founders or directors, as it has a ‘perpetual succession’ status. This allows it to make long-term plans.
Another benefit is that it is easy to raise capital by equity or debt financing. Since a Sdn Bhd is a well-recognized corporate structure, banks are likely to view it as less risky than loans to other formats of businesses.
A Sdn Bhd company can have anywhere from 2 shareholders up to 50. This makes it an ideal choice for small or medium-sized enterprises (SMEs). In addition, this type of company has to disclose its financial statements to the public.
Shareholders
A sdn bhd company is a business entity that has legal personality, the right to own assets and sue or be sued in its own name. The company can own land, buildings and machinery and is able to transfer ownership through share sale.
Shareholders are individuals or corporate bodies that own a portion of a company through the subscription of shares (buying shares). They financially back up the company and exert indirect control over its day-to-day operations.
Ownership can be transferred easily through the sale of shares, as long as the recipient of the shares can afford to purchase them. This makes it easy to raise capital for the company, either by equity or loan.
Generally, Sdn Bhd companies are seen as more professional and legitimate than other business structures like sole proprietorships, conventional partnerships or limited liability partnerships. They are also more acceptable to banks, which may offer loans at lower rates than for other business structures.
Directors
A Sdn bhd is one of the most popular types of companies to be incorporated in Malaysia. It offers limited liability protection, lower income tax rate and a distinct business identity, among other advantages.
It also allows shareholders to raise additional capital more easily, by selling shares. However, this may not be the best option for every entrepreneur.
Typically, a Sdn bhd will have a board of directors that makes major business decisions and appoints officers to oversee daily operations. Shareholders will be able to influence these decisions by voting on important issues, approving amendments to the company’s Articles of Association and electing or removing directors.
In the process of incorporating, you must register with SSM and complete several important steps to obtain a company registration certificate. This includes filing your company’s articles of association (if applicable), making a statutory declaration by the director(s) of not being bankrupt or convicted of any offense, appointing a Company Secretary and submitting audited financial statements to SSM.
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