Building a successful business is a celebrated path towards achieving financial freedom. With your business plan prepared, the business registration process is often the next step to set your aspirations into motion. This is an essential process, and every business must be registered within 30 days from its date of commencement.

Among the various aspects of running a business, company registration stands out as relatively straightforward. To ensure a smoother start to your business, this guide aims to provide clarity through each step of the process, which includes registration location, registration criteria, choosing a business structure and business name, as well as the required documentation for you to complete the process.

Where should I register my business?

All businesses are registered through the Companies Commission of Malaysia (SSM), a statutory body regulating all business entities in Malaysia. SSM also serves as a public database for company and business information. You can register your business at your nearest SSM branch or via EzBiz Online.

Requirements to register a business

First of all, you should ensure that you meet the eligibility criteria to register a business in Malaysia. The requirements are:

• Owner/partners must be a citizen or permanent resident of Malaysia.

• Owner/partners must be 18 years old and above.

• Have a locally registered business address.

• Meet the minimum paid-up capital (e.g. RM1 for Sdn. Bhd.)

• Have a minimum of 1 director and shareholder for Sdn. Bhd.; 2 for Bhd.

• Appointment of a company secretary (for PLT and companies only).

How to register a business in Malaysia?

Step 1: Deciding on a business structure

You will need to choose a business structure before starting the registration process. The business structure will affect everything from daily operations, to taxes, funding, and personal liability. As every structure has its pros and cons, you should identify the one that provides the right balance of benefits and legal protection for your business.

The common structures for small businesses are:

1. Sole Proprietorship

   As one of the simplest business structures to set up, a sole proprietorship requires only 1 owner. The owner has unlimited liability, meaning that their personal assets will be at risk if the business is in debt or faces bankruptcy. On the flip side, the owner has total business control and is entitled to all of the profits from the business. Due to its simplicity and affordability, it remains a popular choice for small businesses.

2. Partnerships

   A partnership is structured for businesses with 2 to 20 partners. In contrast to a sole proprietorship, a general partnership offers the advantage of capital injection from multiple partners and the opportunity to pool diverse skills and knowledge for collaborative work towards a shared business goal. In a general partnership, all partners share ownership, profits, and have unlimited liability. On the other hand, a limited liability partnership (PLT) operates as a separate legal entity and there is no personal liability involved. In this case, partners contribute capital and share profits, but are not necessarily owners.

3. Private Limited Company (Sdn. Bhd.)

   A private limited company must have at least 1 member but cannot exceed 50 members. The biggest difference between a Sdn. Bhd. and sole proprietorship or partnership is that it is a separate legal entity, allowing it to conduct property transactions, enter legal contracts, and participate in legal actions in court. Similar to a PLT, their owners’ liability is limited to their capital contribution.

   While a Sdn. Bhd. can scale relatively more easily by raising paid-up capital and issuing shares to investors, it must conform to stricter reporting standards. This structure allows full foreign ownership except for certain industries like banking, education, and agriculture.

When your business outgrows its current structure, you can apply for an official change in business type. For a more comprehensive look into the available types of business structure, refer to our article, "Which Type of Business Structure Is Best for You?"

Step 2: Choosing a business name

The next step in preparation is to decide on a suitable business name. You can use a personal name (for sole proprietorships only) or a trade name for your business. A personal name as per MyKad is not required for application, but a trade name has to be applied for by filling and submitting either Form PNA.42 for businesses or Form 13A for companies.

When selecting a trade name, be sure to avoid words that are misleading or resemble other registered businesses. Additionally, consider attaching supporting documents for using words that require the Minister’s approval. Before finalising a name, you should check the availability of your desired business name via SSM online. After registering an eaccount, use the search bar to check if your preferred trade name has been taken by others in the Company Name Search Results.

Check out SSM’s business naming guidelines for prohibited words and those requiring special approvals. Once your business name is approved, it will be reserved for 30 days (3 months for companies) from the date of confirmation.

Step 3: Preparing the necessary documents

You should gather the information and documents in advance to prepare for a smoother registration process. Here is a list to help you get started:

1. A copy of MyKad of all owners.

2. Form A: Business registration form requiring information such as business name, business starting date, business address, type of business, information of owner/partners, and additionally for partnerships, a copy of the partnership agreement. Every owner and partner must sign the completed form.

3. Form PNA.42: Business name approval form.

4. Permit, licence, or supporting letter for the type of business.

5. Approval or supporting letter from relevant agencies, if required by the Registrar of Business.

If you are looking to register a Sdn. Bhd. company, you will need to fulfil these requirements:

1. A copy of MyKad for all owners and directors,

2. Form 13A: Form requesting for availability of name.

3. Information required: Type of company structure, type of business, business address, details of directors and promoters.

4. Form 6 (Declaration of Compliance): Form confirming the fulfilment of all requirements outlined in The Companies Act 2016 and must be signed by the company secretary.

5. Form 48A (Statutory Declaration by a Director/Promoter before Appointment): Form declaring that all directors and promoters meet the requirements for appointment.

6. Constitution: Also known as Memorandum and Articles of Association. This document details the rights, duties, and obligations of each member of the company. This document can be filed after incorporation.

For additional details regarding company registration, you can refer to SSM’s Guidelines for the Incorporation of a Local Company.

Step 4: Registering with SSM

Once you have all the necessary documents in order, you can proceed with registration at your nearest SSM branch or through EzBiz Online. If you choose to walk in, please note that all owners and partners must be present at the counter for registration. As for online applications, all partners involved would need to verify the application on the EzBiz Online portal.

Business registration typically takes 5-10 days to process, and a Certificate of Incorporation/Registration will be issued by SSM upon completion and payment. This certificate serves as your business’s proof of legitimacy and is valid for 1-5 years, depending on your preference.

Ready to register your company in Malaysia?

We hope that this article provides you with a better understanding of the necessary steps to get your business registered in the country. If you require further guidance, feel free to consult with an expert from the OCBC team. We are happy to support you along your entrepreneurial journey, right from the beginning.