Avoid These Common Mistakes When Registering a Business in Malaysia

Incorporation in Malaysia is a straightforward process—if done correctly. However, many startups and first-time entrepreneurs fall into common traps that delay registration, cause legal issues, or cost them unnecessary penalties.

⚠️ Mistake #1: Choosing the Wrong Business Structure

Some entrepreneurs choose a Sole Proprietorship or Partnership without understanding the risks:

  • No limited liability protection

  • Only available to Malaysian citizens or PRs

  • Not ideal for scaling or raising funds

✅ If you’re serious about growth or plan to involve partners or investors, incorporating a Sdn Bhd (Private Limited Company) is the smarter choice.

⚠️ Mistake #2: Not Appointing a Qualified Company Secretary

Under the Companies Act 2016, every Sdn Bhd must appoint a licensed company secretary in Malaysia within 30 days of incorporation.

Failing to do so may result in:

  • Penalties

  • Missed filing deadlines

  • Possible deregistration

🔍 Engaging professional company secretary services ensures your documents, deadlines, and legal obligations are fully managed.

⚠️ Mistake #3: Using an Unavailable or Non-Compliant Company Name

Your company name must be:

  • Unique and not already registered

  • Compliant with SSM naming guidelines

  • Free of restricted or sensitive terms without approval

Skipping a name search or ignoring guidelines can cause delays and rejections.

✅ Use the MyCoID system for real-time name checks and reservation.

 

⚠️ Mistake #4: Not Understanding Local Requirements for Foreign Ownership

Foreign investors must:

  • Incorporate a Sdn Bhd (not Sole Proprietorship or Partnership)

  • Appoint at least one local resident director

  • Comply with industry-specific equity conditions (for restricted sectors)

📌 Get professional advice from a corporate secretary Malaysia firm before registering to avoid regulatory issues.

 

⚠️ Mistake #5: DIY Incorporation Without Legal Knowledge

Some business owners try to self-register to save money—but this often leads to:

  • Incomplete or incorrect filings

  • Legal non-compliance

  • Missing required documents

🧠 Professional corporate secretarial services include expert handling of your incorporation process, resolutions, and statutory records.

⚠️ Mistake #6: Not Preparing Post-Incorporation Essentials

Many business owners think registration ends with SSM approval—but that’s just the start. Don’t forget to:

  • Open a corporate bank account

  • Register with LHDN (Inland Revenue Board)

  • Apply for business licenses (if applicable)

  • Appoint auditors and file tax returns

  • Hold board meetings and keep minutes

⚠️ Mistake #7: Ignoring Annual Compliance Requirements

All Sdn Bhd companies must:

  • File annual returns and audited financial statements

  • Maintain statutory registers

  • Keep records of resolutions and changes

Missing these leads to fines, blacklisting, and even legal action.

💼 Your corporate secretary in Malaysia handles these tasks and sends deadline reminders to keep you compliant.

✅ Bonus Tip: Use a Trusted Corporate Secretary in Malaysia

A professional company secretary is your legal guide, compliance manager, and governance partner. They handle:

  • Company registration

  • Name search and documentation

  • SSM filings

  • Share management and board resolutions

  • Annual returns and legal compliance

FAQ: Company Incorporation Mistakes in Malaysia

Q1: Can I register a Sdn Bhd without a company secretary?
 No. You must appoint a certified company secretary within 30 days.

Q2: Is it cheaper to register a business myself?
 Not necessarily. Mistakes often lead to delays, fines, or re-registration,costing more in the long run.

Q3: Can foreigners be directors in a Malaysian company?
 Yes, but at least one director must reside in Malaysia.