Limiting your liability (limited Company)

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To conduct a business in Malaysia, the most common form of company is one that is limited by shares. The liability of the shareholders (owners of the company) is limited to their investment in the shares. If the company becomes insolvent or falls into liquidation, the shareholders are not required to make a further contribution to repay the company’s debts. The shareholders and the company are considered separate legal entities.

Sendirian Berhad Company

A company limited by shares can be a private limited company (Sendirian Berhad) or a public limited company (Berhad).

Private Limited Company (Sendirian Berhad, Sdn Bhd)
A large number of SMEs in Malaysia are private limited companies. As its name suggests, a private limited company’s shares are privately held by its shareholders and are not open to the public. The right to transfer its shares may be subject to the approval of the company’s directors.

Public Limited Company (Berhad)
A public limited company’s shares are offered to the public for subscription and are freely transferable via trading through a stock exchange. A company must meet certain revenue and other conditions before it is eligible to list its shares in the stock exchange.