Compliance Guide for Malaysia Company Incorporation: Sdn Bhd Registration Checklist

Establishing a company in Malaysia specifically a Sendirian Berhad (Sdn Bhd) is a major milestone for any entrepreneur. However, for first-time founders, legal terms such as paid-up capital, company secretary, and SSM compliance can feel overwhelming.

Under Malaysian law, all companies must be registered with the Companies Commission of Malaysia (SSM).
This practical guide provides a step-by-step Sdn Bhd registration checklist to help you complete your incorporation correctly in one go, avoiding delays, rejections, or penalties.

Why Do You Need a Checklist Before Registration?

Many entrepreneurs face unnecessary problems due to poor preparation, such as:

• Name Rejection
  Proposed company names that do not comply with SSM naming guidelines

• Unclear Legal Liabilities
  Misunderstanding the roles and responsibilities of directors vs shareholders

• Structural Errors
  Discovering after incorporation that shareholding or paid-up capital does not meet:

  • Bank account opening requirements

  • Business licence or tender conditions

A proper checklist prevents costly corrections later.

Essential Checklist for Malaysia Company Incorporation (Sdn Bhd)

1. Confirm Entity Type: Why Choose Sdn Bhd?

A Sendirian Berhad (Sdn Bhd) is the most common business structure in Malaysia.

Key advantages:

• Separate Legal Entity
  The company can own assets, enter contracts, and sue or be sued in its own name

• Limited Liability
  Shareholders’ personal assets are protected — liability is limited to subscribed shares

• Professional Credibility
  Higher trust with banks, investors, government tenders, and corporate clients compared to sole proprietorships

2. Propose Company Names

Prepare at least three (3) alternative company names.

Requirements:

• Must be unique and not identical to existing companies

• Must not contain restricted or sensitive words

Pro Tip:
Choose a name that remains relevant as your business expands into new markets or services.

3. Define Business Nature

You must clearly describe your business activities and match them with the correct MSIC Codes (Malaysia Standard Industrial Classification).

Why this matters:

• Corporate bank account approval

• Local council business licences (Lesen Premis)

• Industry-specific permits or regulatory approvals

4. Determine Shareholding Structure

• Shareholders
  Owners of the company (individuals or corporate entities)

• Share Allocation
  Clearly define the percentage held by each shareholder
  This determines:

  • Voting rights

  • Dividend entitlement

  • Control over company decisions

5. Set Paid-Up Capital

• Legal Minimum:
  RM1 is allowed under Malaysian law

• Practical Reality:
  Higher paid-up capital is usually required for:

  • Corporate bank account opening

  • Employment Pass applications (foreign directors)

  • Government tenders or regulated industries

Common practical range: RM10,000 – RM1,000,000, depending on business needs

6. Appointment of Directors

Director requirements:

• At least 18 years old

• Not bankrupt

• Not disqualified by court

Residency Requirement (Companies Act 2016):

• At least one director must ordinarily reside in Malaysia
  (Citizen, permanent resident, or valid visa holder with a Malaysian address)

7. Statutory Requirement: Company Secretary

Every Sdn Bhd must appoint a licensed Company Secretary in Malaysia.

Key responsibilities include:

• Managing SSM statutory filings
  (Annual Return, Financial Statements, resolutions)

• Advising directors on compliance matters

• Acting as official liaison between the company and SSM

8. Registered Office vs Business Address

• Registered Office
  Usually the Company Secretary’s office
  Used for receiving official correspondence from SSM and LHDN

• Business Address
  Actual place of operations where you conduct business and meet clients

Both addresses must be valid and reachable.

9. Constitution (Optional but Recommended)

Under the Companies Act 2016, a Sdn Bhd may operate without a Constitution, relying on default provisions.

However, if there are multiple shareholders, it is highly recommended to have:

• A Company Constitution, or

• A Shareholders’ Agreement

These documents help define:

• Share transfer restrictions

• Decision-making authority

• Exit mechanisms and dispute resolution

Summary: Sdn Bhd Registration Information

Warning: Common Incorporation Mistakes

1. Blind Incorporation
   Ignoring ongoing costs such as accounting, audit, and tax compliance

2. Missed Deadlines
   Late filing of Annual Returns or financial statements leads to heavy penalties and possible prosecution

3. Invalid Addresses
   Using fake or inactive addresses may result in missed legal notices

4. Non-Compliant Board Structure
   Operating without a qualified resident director violates statutory requirements

Need Professional Incorporation & Compliance Support?

At iComSec, we go beyond simple registration — we help businesses operate sustainably and compliantly in Malaysia.

Our services include:

• SSM Company Incorporation
  End-to-end management of the registration process

• Licensed Company Secretarial Services
  Ongoing statutory compliance and advisory support

• Corporate Consultancy
  Guidance on paid-up capital, shareholding structure, and bank account opening

• One-Stop Compliance Support
  Tax filing, accounting, payroll and annual statutory obligations

Ready to Launch Your Business in Malaysia?

Contact iComSec today and let our experienced consultants design a compliant, future-ready company structure tailored to your business goals.