A Foundation, commonly known as a “Yayasan” in Malaysia, is generally established as a Company Limited by Guarantee (CLBG) and registered with the Companies Commission of Malaysia (SSM) under the Companies Act 2016. Unlike an ordinary company limited by shares, a CLBG does not have shareholders or share capital and is commonly established to pursue charitable, educational, social, religious, cultural, community or other approved non-profit objectives.

A CLBG is incorporated as a public company and is governed by its Constitution, which sets out its objectives, membership structure and how the Foundation is to be managed.

Under the latest regulatory requirements, a newly incorporated CLBG is required to be registered with the word “Berhad” or “Bhd.” at the end of its name. For example, a Foundation may initially be registered as “Yayasan ABC Berhad.” Once incorporated, the Foundation may apply for approval to remove the word “Berhad” or “Bhd.” from its name, subject to the applicable requirements.

One of the key requirements for such an application is for the Foundation to have an initial cash fund of RM1 million available in its bank account. Once the required financial resources are available, an application may be made to obtain approval for the Foundation to operate without the word “Berhad” or “Bhd.” in its name.

This structure allows organisations to establish a professionally governed Foundation under the Companies Act 2016 while providing a recognised legal entity through which their approved objectives and activities can be carried out.