Guide to Unlimited Company in Malaysia

What is an Unlimited Company in Malaysia?

An Unlimited Company is a private company where shareholders bear unlimited liability for the company’s debts and obligations. This means that if the company incurs losses or debts beyond its assets, shareholders are personally responsible for covering the shortfall. 

While this might seem like a disadvantage, especially when compared to a private limited company, an unlimited company offers specific benefits including greater confidentiality, operational flexibility, and credibility with creditors.

This structure is often favored by closely held businesses, professional partnerships, or family-owned firms seeking privacy and a streamlined governance process. If your business operates in a low-risk environment and prioritizes confidentiality or financial accountability, an unlimited company could be the right choice.

Benefits of an Unlimited Company in Malaysia

Unlimited companies in Malaysia offer several distinct benefits that can be advantageous for certain business structures and objectives. Here are primary benefits of an Unlimited company:

• Privacy – Unlimited companies offer a certain level of privacy when it comes to disclosing financial information to the public compared to limited companies. This can be particularly beneficial for businesses that wish to keep their financial affairs confidential.
• Unlimited Shareholders – facilitating easier capital raising through public investments from numerous sources to expand or attract a diverse investor base.
• Fewer statutory audits – Unlimited companies are not required to conduct statutory audits or file detailed financial statements publicly. As a result, there are lesser compliance costs associated with accounting and auditing. 
• Control and Ownership – allows your shareholders to maintain greater control over the company without the complexities associated with limited liability structures. Shareholders have more freedom regarding the sale and transfer of shares, which can enhance liquidity options within the company.
• Suitable for Investment Purposes – often utilized as vehicles for holding investments or assets, providing a strategic advantage for managing portfolios without the constraints imposed on limited liability entities.

Key Requirements for Establishing an Unlimited Company

Establishing an unlimited company in Malaysia involves several key requirements, as outlined by the Companies Act 2016. 

• Must have at least one director who resides in Malaysia and one shareholder. The shareholder can be either an individual or a corporate entity. Unlike a private limited company, there is no upper limit on the number of shareholders.
• Must appoint a company secretary within 30 days of incorporation. The secretary must be a licensed individual who resides in Malaysia and is either licensed by the Companies Commission of Malaysia (SSM) or a member of a recognized professional body. 
• Minimum paid-up capital depending on the sector your business will operate it.
• A registered office address in Malaysia

Emerhub’s local experts will advise you on the specific requirements based on your planned business activities and handle the process on your behalf.

How to Establish an Unlimited Company in Malaysia

The process of setting up an unlimited company is similar to private limited company registration in Malaysia. 

1. Reserve a Company Name and Prepare Necessary Documents

To establish an Unlimited Company in Malaysia, the first step is to reserve the preferred business name. The name must comply with the guidelines of the Companies Commission of Malaysia (SSM) and should not conflict with existing company names.

Once a company name is approved, it is reserved for 30 days. This period can be extended for an additional fee if necessary. 

Furthermore, you will need to prepare the necessary documents for incorporation. Following are the key documents required for incorporating an unlimited company in Malaysia:

• Memorandum and Articles of Association – outlines your company’s constitution and operational rules. 
• Identification Documents – National Identity Card (NRIC) and passport to verify your director’s and shareholder’s identity. 
• Declaration Forms – including the Super FORM, FORM 48A by the director(s) and promoter(s) regarding compliance with the Companies Act, and FORM 6 for company registration.

2. Submit Application to SSM

After gathering the necessary documents, the next step is to apply for company registration with SSM. This can be done online through the SSM portal or with the help of local consultants. 

If all documents are in order, SSM will issue a Certificate of Incorporation, officially recognizing your unlimited company as a legal entity in Malaysia.

Keep in mind that the approval time varies depending on the accuracy and completeness of your application. To avoid unnecessary delays, our incorporation experts gather the necessary documents and handle the entire process on your behalf.

3. Post-Incorporation Requirements

Now that your company has a Certificate of Incorporation in Malaysia, you will need to secure a tax registration number from the Inland Revenue Board and apply for licenses and permits depending on your business operations.

This includes mandatory licenses such as business premise license, signboard license, as well as activity specific licenses.

In addition to company registration, our local experts will help you secure necessary licenses to start your business operations.

For more details, fill out the form below and we will put you in touch with one of our experts in Malaysia.