Private Limited or popular known as Sendirian Berhad Company (Sdn. Bhd.) here in Malaysia is one of two types of companies limited by shares. Its establishment, conduct and dissolution of these companies are regulated by the Companies Act 2016.
The liability of this company is limited. It is limit to the amount paid by its shareholder only. If the shareholder has fully paid his shares, he is no longer need to contribute money to the company even in the event of its bankruptcy.
Private limited company also has a separate legal entity like a normal company. They can borrow, buy, rent, enter into contracts, sue, be sued, own property and real estate in the company name without involving its shareholder’s name.
All matters relating to the establishment of the private limited company until its dissolution should be done at the registrar of companies office or also known as Company Commission of Malaysia (CCM) which has its headquarters at Menara SSM, KL Sentral, Kuala Lumpur.
Starting February 2017, In order to set up a private limited company, a minimum of 1 director who have a residential address in Malaysia is needed. In addition, the minimum 1 shareholder are required to complete the incorporation which can be the same individual.
Private limited company is required to appoint at least a company secretary as stated in the Companies Act 2016 either by appoint a company secretary to work with the company (internal company secretary) or seek the services of the company secretary firm (external company secretary).
At the end of every year, the private limited company is required by the Companies Act 2016 to:
- Lodge a company’s annual return to the CCM
- Complete the audited reports, distribute to the shareholders and lodge it to CCM
The company’s failure to comply for two mandatory requirements above may cause the company and its directors be compounded by CCM and if convicted in court can lead to a higher penalty.
Private limited company will continue to exist even with any changes with all of its shareholders. It is also will not close despite the death of all of its shareholders. It will continue to exist unless the proper closure procedure against it was done either through the CCM or the courts.
