Malaysia company types can be broken down into the following categories:
- Sole proprietorship
- Partnership
- Limited Liability Partnership, also known as LLP
- Private Limited Company, commonly known as Sdn Bhd’s
- Public Limited Company, known locally as Berhad’s
- Companies limited by guarantee
- Foreign companies
Malaysia Company – Sole Proprietorship
The sole proprietorship type of business entity is one of the simplest and cheapest forms of business entities to form. A Malaysia company that is registered as a sole proprietorship is only required to pay an annual fee to the Companies Commission of Malaysia to keep the business renewed every year. Sole proprietorship companies do not need to submit audits or do annual filings for the business.
Malaysia Company – Partnership
A Malaysia company partnership works in a similar way to the sole proprietorship concept. The only thing that differentiates the two entities is the partnership arrangement involves more than one owner, hence the name partnership.
Malaysia Company – Limited Liability Partnership
The LLP business entity is a mix of a private limited company and a partnership company. The advantage of the LLP is that it is a body corporate and is a separate legal entity from its partners. The LLP would also have perpetual successions and has fewer compliance requirements, which makes the LLP a more affordable business model.
Malaysia Company – Private Limited Company
These types of business entities are known very commonly in Malaysia as Sdn Bhd’s. It is the most common type of business entity in Malaysia because of it has a separate legal identity and it can acquire assets, go into debt, sign contracts, liable to suing or being sued and it has a perpetual succession until the directors and shareholders decide to dissolve the company. A private limited company is also a much more credible business entity. Private limited companies in the Malaysia is the preferred business structure, especially when it comes to conducting B2B type of business dealings.
Malaysia Company – Public Limited Company (Berhad)
The difference between this type of business entity and private limited companies is the public limited company is able to offer its shares to the public. This type of business entity usually involves the company being listed and governed by the Securities Commission of Malaysia. Public limited companies are usually the preferred business model for large businesses.
Malaysia Company – Company Limited by Guarantee
This business entity involves the liability of the members being limited to the amount which the members have undertaken or guaranteed to contribute. This business entity is commonly used by non-profit organisations, such as foundations and charitable bodies.
Malaysia Company – Foreign Company
A foreign company business entity in Malaysia is equivalent to a foreign branch in Malaysia. The branch office would usually be registered as an extension of the parent company and is not a separate legal entity.
More information on Sole Proprietor vs LLP vs General Partnership vs Company in Malaysia