5 Key Factors to Address Before Starting Your Business

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The formation of a company is an important step in the process of starting a business. Besides sparing you the considerable hassle that comes with filling out the incorporation form, you can focus on the vital elements that matter most to your business by being aware of the legal prerequisites and required information for the incorporation of your Sdn. Bhd. in advance. 

In order to assist you in successfully incorporating your Sdn. Bhd. in Malaysia, we have put together a list of key factors that you must address before completing and submitting the incorporation form. 

Company and business information 

Suggested company names 

The Companies Commission of Malaysia (SSM) has published criteria for naming businesses, and they state that your proposed business name must: 

  • Not use phrases like “royal,” “federal,” and “ASEAN” to imply affiliations with royal families or governing authorities. 
  • Not misrepresent the nature of the business. 
  • Not be blasphemous or potentially hurtful. 
  • Not resemble to or susceptible to being confused for another registered corporation. 
  • Not imply affiliations with businesses that fall within the purview of other laws, such as governing insurance, real estate agents, and takaful, without first obtaining the appropriate agency’s express consent. 
  • Avoid using terminology like “architect,” “co-op,” and “engineer” to suggest linkages with activities that are supervised by government agencies or professional bodies, unless explicit permission from the appropriate body is acquired. 

It’s crucial for your company’s name to be fully understandable. If the proposed company name includes words that are not in Malay or English, you must specify their meaning when completing the company incorporation form. 

Business nature and description 

The type of business that your Sdn. Bhd. will do must be made clear as the MSIC code is used to categorise every business in Malaysia. In order to determine which category your company belongs to, it is best to speak with a company secretary and give a thorough explanation of your firm’s goals. 

Business address and registered address 

There is no requirement that your registered address and company address must match. While a business address is where your company’s operations and activities are carried out, a registered address is often the company secretary’s office, where all correspondence and notices may be delivered. It should also be open to the public during regular business hours. 

However, there is no need for a business address if you do not run a physical storefront or office. 

Your qualification as a shareholder and director of the company 

The difference in roles for directors and shareholders is simple. Directors oversee the corporation, whereas shareholders are its owners, and they perform various responsibilities in the organisation. 

Director 

The following prerequisites must be met for both Malaysians and foreigners to form a Sdn. Bhd. as the sole director and shareholder: 

  • 18 years old and above 
  • residing in Malaysia 
  • not disqualified under Section 198 of Companies Act 2016 

To incorporate a Sdn. Bhd., however, you must have at least one resident director if you are a foreigner who does not live in Malaysia. The best option is to work with a Malaysian business partner. 

Shareholder 

50 maximum shareholders are allowed for a Sdn. Bhd. Each shareholder must indicate how many shares they own during the incorporation of the company. The total share value is then determined to be equal to the whole paid-up capital of the company. Once the company has been incorporated and a business bank account has been established, each shareholder must transfer the appropriate amount into the account based on the number of shares they own. 

Paid-up capital 

A Sdn. Bhd. must have a minimum amount of RM1 in paid-up capital in order to be incorporated. However, it is possible to alter the paid-up capital stated during the incorporation of the firm. It is therefore advised to set a limit on the paid-up capital at RM10,000 and to raise it once you receive the money after the company has been incorporated. Declaring a paid-up capital amount that you do not yet have is prohibited. 

Documents needed 

MyKad / Passport 

The MyKad / Passport is a required document in the incorporation of a Sdn. Bhd. and must be produced for identity verification. You must submit your MyKad / Passport at the SSM counter when first registering an account on the MyCoID portal if you choose to incorporate your business through the portal. 

A digital company secretarial agency like Boss Boleh, however, will require the validation of your MyKad / Passport via the e-KYC process for all directors and shareholders, without the requirement of physically presenting the document. 

Letter of authorisation for a trademark or restricted phrase 

An authorisation letter from the appropriate authority or owner is required in some situations where the intended company name contains restricted words or a trademark. 

Payment needed 

Charges by SSM 

The SSM levies an incorporation cost of RM1,010 (including tax). 

Charges by company secretary 

A service fee is required for completing out the application if you hire a company secretary to incorporate your Sdn. Bhd. A company secretary must be appointed for your Sdn. Bhd. within 30 days of the company’s incorporation, as required by the Companies Act 2016, and there is a monthly cost for this service. Depending on the pricing strategies used by various company secretarial firms, these fees may change. 

Sdn. Bhd. is the most frequently registered company for entrepreneurs looking to launch a business out of the 8 different types of business entities in Malaysia, especially since the Companies Act 2016 went into effect to make it easier to comply with the requirements to establish a private limited company. 

Entrepreneurs shouldn’t get weighed down by the traditional approach of dealing with a company secretary, which entails a lot of paperwork and drawn-out in-person meetings, since the Malaysian government has taken steps to make company creation as simple as possible. Your Sdn. Bhd. should be incorporated as a step toward starting your firm, not as a burden that requires time and effort from you. 

With Boss Boleh, all of this is possible as we help you check off every important element of starting your business online without the need of complicated paperwork and meeting different people. 

Starting a business is now made easy with www.bossboleh.com

If you are looking for the right cloud company secretary to simplify your business incorporating process, reach out to us today via WhatsApp @018-767 8055

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