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Incorporation of a New Private Limited Company (Sdn Bhd)
What is the minimum requirement to register a Sdn Bhd?
At least 1 resident director and 1 shareholder.
Can an individual or company be the sole shareholder of the company?
Yes. Only 1 shareholder is required.
How long does it take to incorporate a company?
It takes only 1 day to incorporate a company.
How much does it cost to submit a name search?
To submit an official name search, a filing fee of RM50.00 per name is payable to Companies Commission of Malaysia. And if approved, it will be reserved for 30 days.
Is it possible to conduct an unofficial search to see whether the proposed name is available prior to submitting an official search?
Yes, it is possible. We will usually conduct a preliminary search prior to submitting an official search to Companies Commission of Malaysia. That is why we request that 3 names be submitted to us in case if the preferred choice is not available.
Once a name search is approved, how long will it be reserved?
An approved name will be reserved for 1 month for incorporation. An extension of time can be applied if more time is required.
Do I need to appoint a Company Secretary?
Yes, every company shall have one or more secretaries each of whom shall be a natural person of full age who has his principal or only place of residence in Malaysia.
Can the company commence business upon successful registration with Companies Commission of Malaysia?
The company may commence business once it has been registered with Companies Commission of Malaysia. This is on condition that the Company does not require any license/approvals from other government agencies in order to carry out the business activities.
At least 1 resident director and 1 shareholder.
Can an individual or company be the sole shareholder of the company?
Yes. Only 1 shareholder is required.
How long does it take to incorporate a company?
It takes only 1 day to incorporate a company.
How much does it cost to submit a name search?
To submit an official name search, a filing fee of RM50.00 per name is payable to Companies Commission of Malaysia. And if approved, it will be reserved for 30 days.
Is it possible to conduct an unofficial search to see whether the proposed name is available prior to submitting an official search?
Yes, it is possible. We will usually conduct a preliminary search prior to submitting an official search to Companies Commission of Malaysia. That is why we request that 3 names be submitted to us in case if the preferred choice is not available.
Once a name search is approved, how long will it be reserved?
An approved name will be reserved for 1 month for incorporation. An extension of time can be applied if more time is required.
Do I need to appoint a Company Secretary?
Yes, every company shall have one or more secretaries each of whom shall be a natural person of full age who has his principal or only place of residence in Malaysia.
Can the company commence business upon successful registration with Companies Commission of Malaysia?
The company may commence business once it has been registered with Companies Commission of Malaysia. This is on condition that the Company does not require any license/approvals from other government agencies in order to carry out the business activities.
Changing of Company Secretary
Is there any cost involved when I change the company secretary?
No, there is no cost involved in changing the company secretary.
What is the procedure to change company secretary?
Upon receiving e-mail from you, RISS will assist in preparing a termination letter to the service provider. If there are no outstanding bills, the secretarial files will be released and RISS will proceed to prepare the necessary documents to notify the Companies Commission of Malaysia of the change in company secretary.
Why must I settle the outstanding invoices before the service providers will release my secretarial files?
All services rendered should be paid. Therefore the service provider has a right to withhold the secretarial files until all their outstanding invoices are paid. As most service providers invoice their clients in advance, we usually advise our future clients who intend to switch to RISS to plan their timing accordingly when they intend to change its company secretary as the service provider will not refund the monies that you have already paid to them for the "unused" periods due to your terminating their service.
No, there is no cost involved in changing the company secretary.
What is the procedure to change company secretary?
Upon receiving e-mail from you, RISS will assist in preparing a termination letter to the service provider. If there are no outstanding bills, the secretarial files will be released and RISS will proceed to prepare the necessary documents to notify the Companies Commission of Malaysia of the change in company secretary.
Why must I settle the outstanding invoices before the service providers will release my secretarial files?
All services rendered should be paid. Therefore the service provider has a right to withhold the secretarial files until all their outstanding invoices are paid. As most service providers invoice their clients in advance, we usually advise our future clients who intend to switch to RISS to plan their timing accordingly when they intend to change its company secretary as the service provider will not refund the monies that you have already paid to them for the "unused" periods due to your terminating their service.
Limited Liability Partnership (LLP)
Is there any limit to the number of partners?
There must be a minimum of 2 partners and no limit for maximum number of partners.
Who can be the partners of an LLP?
Individuals (natural persons) or bodies corporate or a combination of both.
Is it a requirement for each partner of a LLP to be "resident" in Malaysia?
There is no need for partners to be resident in Malaysia but there is a requirement for the compliance officer to be resident in Malaysia.
Is there any requirement for a minimum number of partners to have principal or only place of residence in Malaysia?
No. The requirement to be ordinarily residing in Malaysia is applicable only when a partner is also acting as the compliance officer of the LLP.
Can a partner who is declared a bankrupt continue to act as a partner?
Yes, a partner who is declared a bankrupt can continue to be a partner of a LLP. However, he is prohibited from taking part in the management of the LLP unless he has obtained leave from :-
Can two companies form LLP?
Yes. These are the most common form of joint ventures.
Is there any need for a partnership agreement?
Yes. However, in the absence of agreement as to any matter set out in the Second Schedule of the LLP Act 2012, provision of the Second Schedule relating to that matter shall apply.
Is there any restriction as to what kind of business can use LLP as a business vehicle?
No. It is for all kind of lawful businesses with a view to make profit.
Can a charity organisation register as LLP?
No. LLP is intended only for businesses with a view to make profit.
Can a sole-proprietorship convert into a LLP?
A sole proprietorship cannot convert into a LLP as it only has 1 member. The sole proprietor must find at least one more person to be a partner before he can register a LLP.
Is there a requirement for a converted LLP to notify its conversion to any party which the LLP was dealing with prior to the conversion?
A converted LLP is required to ensure for a period of 12 months commencing 14 after the date of registration to state the following on every invoice or correspondence:-
It is unfair to creditors as the current partnerships can evade liability by just converting to LLP. What is the rationale/remedy for this?
Under the LLP Act 2012 it is provided that all rights and liabilities are vested into the LLP upon conversion from a conventional partnership or a private company. Further, partners of a conventional partnership that has converted to an LLP shall continue to be personally liable, jointly and severally with the LLP for the liabilities and obligations incurred prior to the conversion. Under the LLP legal framework, creditors of a private company are further protected as the company must get the agreement of the creditors for such conversion.
Can a LLP be dissolved?
A LLP can be dissolved by way of:
Under what circumstances can a LLP be wound up by Court?
A LLP can be wound up by court under the same circumstances a Company can be wound up by court as provided under the Companies Act 1965. The LLP Act 2012 provides that the relevant provisions of the Companies Act 1965 related to winding up by Court will be applicable to LLPs.
How can a LLP be dissolved by voluntary winding up?
Where a LLP has ceased to operate and has discharged all its debts and liabilities, a partner of the LLP can apply to the Registrar for a voluntary winding up of the LLP provided all the conditions required under the LLP Act 2012 for voluntary winding up application are met.
Under what circumstances can an LLP be struck-off the register?
A LLP can be struck-off the register if the Registrar has reason to believe that:-
Is a LLP required to maintain accounts?
Yes. All accounting records that give a true and fair view of the state of affairs of the LLP shall be retained for 7 years.
Is there an approved accounting standard imposed on LLP in preparing its accounting records similar to the requirement imposed on Companies under the Companies Act 1965?
One of the main objectives for introducing the LLP business vehicle is to give businessmen the flexibility of internal arrangement in conducting business similar to a conventional partnership which is not required to adopt any particular accounting standard. As such, there is no approved accounting standard imposed on LLP. However an LLP is required and expected to prepare from time to time its accounting records which will give a true and fair view of the state of affairs of the LLP.
Is an audit of the accounting required?
Unless provided in the Partnership Agreement, there is no mandatory auditing requirement for LLPs.
Is the LLP required to submit Annual Returns?
No. However, a LLP is required to lodge an Annual Declaration with the Registrar stating whether the LLP is able or unable to pay its debts.
Is there a requirement for LLP to hold Annual General Meeting (AGM)?
There is no requirement for an LLP to convene AGM.
There must be a minimum of 2 partners and no limit for maximum number of partners.
Who can be the partners of an LLP?
Individuals (natural persons) or bodies corporate or a combination of both.
Is it a requirement for each partner of a LLP to be "resident" in Malaysia?
There is no need for partners to be resident in Malaysia but there is a requirement for the compliance officer to be resident in Malaysia.
Is there any requirement for a minimum number of partners to have principal or only place of residence in Malaysia?
No. The requirement to be ordinarily residing in Malaysia is applicable only when a partner is also acting as the compliance officer of the LLP.
Can a partner who is declared a bankrupt continue to act as a partner?
Yes, a partner who is declared a bankrupt can continue to be a partner of a LLP. However, he is prohibited from taking part in the management of the LLP unless he has obtained leave from :-
- The Director General of Insolvency (DGI); or
- The court provided that a notice of intention to apply for leave has been served on the DGI and the DGI is heard on the application.
Can two companies form LLP?
Yes. These are the most common form of joint ventures.
Is there any need for a partnership agreement?
Yes. However, in the absence of agreement as to any matter set out in the Second Schedule of the LLP Act 2012, provision of the Second Schedule relating to that matter shall apply.
Is there any restriction as to what kind of business can use LLP as a business vehicle?
No. It is for all kind of lawful businesses with a view to make profit.
Can a charity organisation register as LLP?
No. LLP is intended only for businesses with a view to make profit.
Can a sole-proprietorship convert into a LLP?
A sole proprietorship cannot convert into a LLP as it only has 1 member. The sole proprietor must find at least one more person to be a partner before he can register a LLP.
Is there a requirement for a converted LLP to notify its conversion to any party which the LLP was dealing with prior to the conversion?
A converted LLP is required to ensure for a period of 12 months commencing 14 after the date of registration to state the following on every invoice or correspondence:-
- A statement that it was, as from the date of registration, converted from a conventional partnership or private company, as the case may be, to a LLP; and
- The name and registration number, if applicable, of the conventional partnership or private company from which it was converted.
It is unfair to creditors as the current partnerships can evade liability by just converting to LLP. What is the rationale/remedy for this?
Under the LLP Act 2012 it is provided that all rights and liabilities are vested into the LLP upon conversion from a conventional partnership or a private company. Further, partners of a conventional partnership that has converted to an LLP shall continue to be personally liable, jointly and severally with the LLP for the liabilities and obligations incurred prior to the conversion. Under the LLP legal framework, creditors of a private company are further protected as the company must get the agreement of the creditors for such conversion.
Can a LLP be dissolved?
A LLP can be dissolved by way of:
- Court Ordered Winding Up
- Voluntary Winding Up; and
- Striking-Off
Under what circumstances can a LLP be wound up by Court?
A LLP can be wound up by court under the same circumstances a Company can be wound up by court as provided under the Companies Act 1965. The LLP Act 2012 provides that the relevant provisions of the Companies Act 1965 related to winding up by Court will be applicable to LLPs.
How can a LLP be dissolved by voluntary winding up?
Where a LLP has ceased to operate and has discharged all its debts and liabilities, a partner of the LLP can apply to the Registrar for a voluntary winding up of the LLP provided all the conditions required under the LLP Act 2012 for voluntary winding up application are met.
Under what circumstances can an LLP be struck-off the register?
A LLP can be struck-off the register if the Registrar has reason to believe that:-
- The LLP is no longer carrying on business;
- The LLP contravened the LLP Act 2012;
- The LLP is prejudicial to national interests;
- No liquidator acting in cases of court ordered winding up; or
- Affairs of the LLP have been fully wound up but no sufficient assets to pay the costs to obtain court order to dissolve the LLP.
Is a LLP required to maintain accounts?
Yes. All accounting records that give a true and fair view of the state of affairs of the LLP shall be retained for 7 years.
Is there an approved accounting standard imposed on LLP in preparing its accounting records similar to the requirement imposed on Companies under the Companies Act 1965?
One of the main objectives for introducing the LLP business vehicle is to give businessmen the flexibility of internal arrangement in conducting business similar to a conventional partnership which is not required to adopt any particular accounting standard. As such, there is no approved accounting standard imposed on LLP. However an LLP is required and expected to prepare from time to time its accounting records which will give a true and fair view of the state of affairs of the LLP.
Is an audit of the accounting required?
Unless provided in the Partnership Agreement, there is no mandatory auditing requirement for LLPs.
Is the LLP required to submit Annual Returns?
No. However, a LLP is required to lodge an Annual Declaration with the Registrar stating whether the LLP is able or unable to pay its debts.
Is there a requirement for LLP to hold Annual General Meeting (AGM)?
There is no requirement for an LLP to convene AGM.