Berhad Company (Berhad) or also known as Malaysian Public Limited Company is one of two types of companies limited by shares. Establishment, conduct and closure of these companies are regulated by the Companies Act 1965.
The liability of berhad company is limited. It is limit to the amount paid by its owner only. If the owner has fully paid his shares, he is no longer need to contribute money to the company even in the event of its bankruptcy.
Berhad company also has a separate legal entity like a normal human being. They can borrow, buy, rent, enter into contracts, sue, be sued, own property and real estate in the company name without involving its owner’s name.
All matters relating to the establishment of the berhad company until its closure should be done at the registrar of companies office or also known today by the name of the Company Commission of Malaysia (CCM) which has its headquarters at Menara SSM, KL Sentral, Kuala Lumpur.
In order to set up a berhad company, a minimum of 2 directors of the company who have a residential address in Malaysia is needed. In addition, the minimum 2 shareholders are required to complete the establishment process. However, the directors and shareholders of the company can be among the same individual.
Berhad company is required to appoint at least a company secretary as stated in the Companies Act 1965 to whether to employ a company secretary to work with the company (internal company secretary) or seek the services of the company secretary (external company secretary).
Not as sdn bhd company , a limited company can not immidiately start its business even after the company registration certificate ( Form 8 ) has been issued . It must first submit for an application for a certificate to commence business to CCM and if successful the company will be issued with a certificate to commence business ( Form 23 ).
After a month of the date on certificate to commence business and within 3 months, a berhad company need to hold a statutory meeting together with that prepare and lay before it the company’s statutory report.
Shares of berhad company can be offered to anyone including the public .In order to ensure the sale of shares of berhad company can be carried out effectively, the company may choose to be listed on the Kuala Lumpur Stock Exchange (KLSE). For this purpose, the company must comply with the listing guidelines issued by the Securities Commission Malaysia (SCM).
At the end of every year, the berhad company is required by the Companies Act 1965 to:
- Complete the audited reports and lay before the Annual General Meeting (AGM) of the Company.
- Holding an Annual General Meeting of the company.
- Lodge a company’s annual report to the CCM
The company’s failure to comply for three 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.
Berhad company will continue to exist even with any changes that occur to its owner. It is also will not close despite the death of all of its owner. It will continue to exist unless the proper closure procedure against it was done either through the CCM or the courts.