Limited company or popular known as Berhad company 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 limited company is limited. It is limit to the amount paid by its shareholders only. If the shareholders has fully paid their shares, he is no longer need to contribute money to the company even in the event of its bankruptcy.
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 limited company until its closure should be done at the registrar of companies office or also known as the Company Commission of Malaysia (CCM) which has its headquarters at Menara SSM, KL Sentral, Kuala Lumpur.
In order to set up a limited company, a minimum of 2 directors who have a residential address in Malaysia is required. In addition, the minimum 2 shareholders are required (which can be the same individual with directors) to complete the establishment process.
Limited company is required to appoint at least a company secretary according to the Companies Act 2016 by either to appoint a company secretary to work with the company (internal company secretary) or seek the services of the company secretary (external company secretary).
Different from private limited company, a limited company can not immidiately start its business even after the company registration certificate has been issued . It must first submit for an application for a certificate to commence of business to CCM and if successful the company will be issued with a certificate to commence business.
After a month of the date on certificate to commence business and within 3 months, a limited company need to hold a statutory meeting together with that prepare and lay before it the company’s statutory report.
Shares of limited company can be offered to anyone among the public at large.In order to ensure the sale of its shares to 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 limited company is required by the Companies Act 2016 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 return 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.
Limited 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 shareholders. It will continue to exist unless the proper closure procedure against it was done either through the CCM or the courts.
