Sendirian Berhad Company(Sdn. Bhd.) or also known as Malaysian Private Limited Company is one of two types of companies limited by shares. Establishment, conduct and closure of these companies are regulated by the Companies Act 1965.
The liability of sdn bhd companyis limited. It is limit to the amount paid by itsowner only. If the owner has fully paidhis shares, he isno longer need to contribute money to the company even inthe event ofits bankruptcy.
Sdn Bhd company also has a separate legal entity like a normalhuman being. They can borrow,buy, rent, enter into contracts, sue, be sued, own property and real estate in the company namewithout involving itsowner’s name.
All matters relating to the establishment of the Sdn Bhd company until its closure should be done at the registrar of companies office or also known today by the name of the Company Commission of Malaysia (CCM) which has its headquarters at Menara SSM, KL Sentral, Kuala Lumpur.
In orderto set up a sdn bhd company, a minimum of 2 directors of the company who have a residential address in Malaysia is needed. In addition, the minimum 2 shareholders are required to complete the establishment process. However, the directors and shareholders of the company can be among the same individual.
Sdn Bhd company is required to appoint at least acompany secretary as stated inthe Companies Act 1965 to whether to employ a company secretary to work with the company (internal company secretary) or seek the services of the company secretary (external company secretary).
At the end of everyyear, the Sdn Bhd company is required by the Companies Act 1965 to:
- Completethe audited reportsandlay beforethe Annual General Meeting (AGM) of the Company.
- Holding an Annual General Meeting of the company.
- Lodge a company’s annual report to theCCM
The company’s failure to comply for three mandatory requirements above may cause the company and its directors becompounded by CCM and if convicted in court can lead to a higher penalty.
Sdn Bhd company will continue to exist even with any changes that occur to itsowner. It is also will not close despite the death of all of its owner. It will continue to exist unless the proper closure procedure against it was done either through the CCM or the courts.
