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KEY FACTS TO KNOW ABOUT A SDN BHD

​ADVANTAGES OF A SDN BHD

1. Separate Legal Entity : Unlike sole proprietorship, a private limited company is a separate legal identity. It can acquire assets, go into debt, enter into contracts, sue or be sued in its own name. 
2. Perpetual Succession : A private limited company once incorporated is perpetual and is not due for renewal until the directors and shareholders decide to dissolve the company.
3. Limited Liability : The liability of the members/owners is limited to the amount that they each have contributed as capital to the company. There is a separation between the owners and its personal assets. If the company fails to meet its liabilities, the creditors will not be able to go after the owners’ personal assets.
4. Credibility : A private limited company (Sdn Bhd) gives credibility to the business owners. 
5. SME Tax Rate : Eligible for lower SME Tax Rate if the company's share capital is less than RM2.5 million, and the gross business income is not more than RM50 million, provided if not more than 20% of the company's share capital is owned (directly or indirectly) by non-Malaysian. Find out more here.
6. Audit Exemption : Companies with total turnover or assets not exceeding RM3.0 million, and with the total number of employees not exceeding 30 employees,  are exempted from audit. 
7. Most common type of business entity due to its flexibility and scalability. The higher cost to maintain a private limited company is insignificant compared to the advantages. The introduction of audit exemption by the Malaysian Government with effect from 2025 has further reduced the compliance cost of a private limited company in Malaysia.

WHAT IS REQUIRED TO REGISTER A SDN BHD?

To register a Sdn Bhd, you will need:
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1. At least 1 resident director (resident is defined as natural person of full age who has principal or only place of residence within Malaysia);
2. At least 1 shareholder (either an individual or an entity);
3. At least 1 company secretary; and
4. A registered address to which all communications and notices may be addressed (usually is the office of the company secretary).

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You may refer here for Malaysia's corporate tax rate. Do take note of the SME and non-SME tax rate.

WHAT ARE THE COMPLIANCE OBLIGATIONS AFTER COMPANY REGISTRATION?
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Once you have successfully registered a company, your compliance obligations have begun!

Our trusted personnel will keep you informed of your company's ongoing compliance obligations.
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