Sdn Bhd – Private Limited Company in Malaysia

Why choose SDN BHD?

Private limited company (popular known as ‘Sendirian Berhad’ or ‘Sdn. Bhd.’) is the most common type of business vehicle for doing business in Malaysia.

Sdn Bhd provides limited liability protection to shareholders (i.e. business owners). This means company owners are typically not personally responsible for business debts and liabilities.

The limited liability protection protects the entrepreneurs against trading losses, especially when working within an unstable and ever-changing economic climate. Company will be responsible for its own debts and trading losses rather than the shareholders / owners. The shareholders’ own assets will remain protected from business creditors, and their liability will be limited to their share amount.

Register a Sdn Bhd / Company may also offer greater tax advantages such as more tax deductible expenses, tax incentives and lower tax rates. 

What are the advantages of a Private Limited Company ?

• Limited liability protection. Shareholders/Owners’ personal assets are not put at risk should the business fail. Shareholder’s liability is limited to the amount of shares subscribed.
• Easy transfer of ownership. Ownership is easily transferable through the sale of shares.
• Unlimited life. When a Sdn Bhd’s owner incurs a disabling illness or dies, the company does not cease to exist.
• Raise capital more easily. Additional capital can be raised by selling shares to new investors (not allowed to sell shares to the public).
• Sdn Bhd may be perceived as a more professional/legitimate entity than a sole proprietorship, conventional partnership or limited liability partnership. Customer / Commercial partners will have more confidences in dealing with your Company.
• Easier Access to Funding. Forming a company will add to your business creditability. This makes it easier to secure finance for your business with less personal risk.
• Greater Tax Advantages. More business expenses may be tax-deductible. more tax deductible expenses, tax incentives and lower tax rates
• Conversion into Public Listed Company. Should the Company grows to a level that need access significant funding from public, then Sdn Bhd can be converted into a Public Listed Company.

The requirements to form a Company are:

• Minimum of one shareholder;
• Minimum of one Malaysia resident directors;
• A qualified company secretary.

Keep in Mind

There are relatively more compliances requirements for Sdn Bhd compared to other business types.  For example, Sdn Bhd is required to have annual statutory audit. Find out more on Compliance Requirements for a Sdn Bhd Company.