New Incorporation of Sdn Bhd: Share Allocation & Share Value Explained 

When incorporating a Sendirian Berhad (Sdn Bhd) in Malaysia, one of the most important — yet often misunderstood — decisions is how shares are allocated and valued. This decision affects ownership, control, investor confidence, and future fundraising.

This guide explains share allocation and share value for new Sdn Bhd incorporation in Malaysia, in a practical and easy-to-understand way.

What Is Share Capital in a Sdn Bhd?

Share capital represents the ownership of the company, divided into shares held by shareholders.

Under the Companies Act 2016, Malaysia adopts a no par value regime, meaning:

  • Shares no longer have a fixed minimum price
  • Companies have flexibility in deciding how many shares to issue
  • Paid-up capital reflects the actual amount injected, not a nominal value

Minimum Share Requirement for New Sdn Bhd

For incorporation with Suruhanjaya Syarikat Malaysia (SSM):

  • Minimum 1 shareholder
  • Minimum 1 issued share
  • RM1 paid-up capital is legally sufficient

⚠️ However, RM1 is usually not practical for real business operations.

 

Common Share Allocation Structures

1️⃣ Single Shareholder (Sole Founder)

Example:

  • 1 shareholder
  • 100 shares
  • Paid-up capital: RM1,000
    👉 Founder owns 100% equity

2️⃣ Two or More Founders

Example:

  • Founder A: 6,000 shares (60%)
  • Founder B: 4,000 shares (40%)
  • Total shares: 10,000
  • Paid-up capital: RM10,000

✔️ Clearly defines control and voting power
✔️ Common for startups and SMEs

3️⃣ Investor-Ready Structure

Example:

  • Founders: 8,000 shares
  • Reserved for investors: 2,000 shares
  • Total shares: 10,000

✔️ Easier future fundraising
✔️ Avoids frequent restructuring

 

What Is Paid-Up Capital?

Paid-up capital is the actual money shareholders contribute in exchange for shares.

Paid-Up Capital

Common Use Case

RM1 – RM1,000

Dormant / holding company

RM10,000 – RM50,000

SME operations

RM100,000+

Licensing, banking, investors

💡 Some banks, licenses, or government tenders require minimum paid-up capital.

 

Share Value vs Ownership Percentage

Ownership is determined by number of shares, not ringgit value alone.

Example:

  • 10,000 total shares
  • You hold 7,000 shares
    👉 You own 70% of the company

Paid-up capital only affects:

  • Financial strength perception
  • Regulatory or commercial requirements

 

Can Share Allocation Be Changed Later?

Yes, but changes require:

  • Board resolution
  • Shareholders’ approval
  • Filing with Suruhanjaya Syarikat Malaysia
  • Possible stamp duty or compliance costs

⚠️ Poor initial planning leads to:

  • Founder disputes
  • Costly restructuring
  • Investor red flags

 

Common Mistakes in Share Allocation

❌ Setting RM1 paid-up capital for an active business
❌ Unequal shareholding without clear agreements
❌ No shares reserved for future investors
❌ Ignoring voting and control implications

 

Best Practice for New Incorporation

✔️ Choose a realistic paid-up capital
✔️ Allocate shares based on roles, risk, and contribution
✔️ Plan ahead for investors or partners
✔️ Document everything properly from day one

How iComSec Can Help

At iComSec, we help founders and investors:

  • Design optimal shareholding structures
  • Advise on paid-up capital strategy
  • Handle SSM incorporation & compliance
  • Prepare for future funding or expansion

📩 Planning to incorporate a Sdn Bhd in Malaysia?
👉 Contact iComSec today for a professional consultation on share allocation and company setup.