Private Limited companies (Sdn Bhd) are the most common form of business entities registered in Malaysia. They are a separate legal entity, meaning shareholders are not held liable for company’s debts beyond the amount of share capital contributed, and a properly structured one also benefits from various tax incentives available. To register Sdn Bhd in Malaysia, you would have to first seek approval for your company name and register your company by providing Suruhanjaya Syarikat Malaysia (SSM) with the necessary company incorporation documents. Once both your company name and company registration have been approved by SSM, you can then proceed to open your corporate bank account, apply for other required business licences and register for SST, to fully open company in Malaysia.
Mistakes to Avoid When You Register Sdn Bhd
Company Names that will not be accepted by SSM
Company Name Check and Reservation of Company Name, in addition to prepping the required incorporation documents, is precursor to lodging an official application to open company in Malaysia. Disruption in timeline and business strategy can certainly occur if a, or a series of, proposed business name is not approved and the name check process has to be repeated and waiting time prolonged over and over. Therefore, to avoid submitting names that likely do not have a chance of being approved, please take note of the following reminders:
Do not submit names for a company that:
- are considered too general or generic;
- resemble another that has been registered or reserved;
- contain elements of obscenity, insults or profanity;
- are confusing and not in line with actual business activity;
- involve religion, renowned or historical figures and statutory bodies;
- are, in the opinion of the Registrar, undesirable
Company Secretary lacking in Required Skills and Qualifications
A company secretary plays an integral role when you open company in Malaysia. A company secretary shares legal duties with company directors, after being appointed by the Board of Directors of the company, and he or she is tasked with advisory duties and is required to review regularly the board procedures and corporate governance matters. Therefore there are important factors to consider and appointing one who lacks the requirements is a mistake that will possibly lead to miscommunication, violations, delays and penalties.
- Professional and Personal Qualities:
- knowledgeable in company law and governance
- adept at processing and vetting high volumes of related information
- good eye for detail, detecting possible discrepancies in documents
- able to work well and coordinate with people at all levels
- strong written communication skills
- trustworthy and responsible
- Role and Duties
- Be familiar with all provisions of the Memorandum and Articles of Association of the company to ensure all procedures are adhered to
- Be competent in the compliance of statutory and regulatory bodies in Malaysia
- Be a liaison party for the company to communicate, prepare and submit required Statutory Returns with the Suruhanjaya Syarikat Malaysia (SSM)
- Be an advisor to the Board to protect the interests of the board and members and ensure the company’s annual general meeting is held before stipulated deadlines
Unable to fulfill the requirements to reside and operate in Malaysia
Experience has shown that many foreign entrepreneurs and business owners end up “nowhere” after they register Sdn Bhd in Malaysia.
Whether they are:
- unable to open a company bank account or
- unable to get approval for their DP10 working permit or
- unable to get approval for 100% foreign ownership (only applicable to unique business concepts) or
- unable to renew a business licence and/or work permit due to non-compliance in tax or other requirements
they end up in a situation where they cannot legally reside and operate in Malaysia, after spending no small amount of money on registration, rental deposits and other set-up costs.
Not Enough Online Presence
With the rise of the Internet and e-commerce, it is fair to assume that most businesses have some kind of online presence in the form of a website. But the reality is, after the excitement of the initial set-up and launch, a large portion of e-commerce websites and online platforms get lost in the deluge of content out there, and just because something is online does not mean it will garner traffic, or traffic significant enough to generate enough leads that lead to conversions.
Internet marketing is far more sophisticated than hosting a website with an online store or a Facebook page or some occasional tweets about available products. Some pointers to prevent your internet marketing to fall into the doldrums are:
- Optimise headline, design, content, forms and call-to-action buttons on your Landing Pages
- Understand and address the needs of your target customers directly
- Keep content updated
- Understand how search engines crawl and index your content, and apply white hat SEO tactics, e.g. like using related keywords, posting well-written content, and providing value for your users.
- Focus on usability and user experience