Corporate Law Services for Businesses in Penang, Malaysia

Corporate Law in Malaysia

Practical legal support for your business

Whether you are starting a company or growing an existing one, we are here to help you understand and handle the legal side of your business.

How we help

We advise businesses of all sizes, from new ventures to established companies.

We can help you:

set up a company (Sdn Bhd) or a limited liability partnership, and prepare the documents SSM requires;
choose and draft a company constitution;
understand the roles, rights and duties of directors and shareholders;
draft and review shareholder agreements, joint venture agreements and share transfers;
work through buying, selling or restructuring a business, including due diligence;
keep up with ongoing SSM compliance, company records and beneficial ownership reporting.

Frequently Asked Questions

What is a Sdn Bhd company?

Sdn Bhd stands for Sendirian Berhad, a private limited company. It is a common structure for small and medium businesses in Malaysia, set up under the Companies Act 2016. A Sdn Bhd is a separate legal person from its owners, so the company itself holds the assets and owes the debts. In most cases the owners are not personally responsible for the company's debts beyond what they have put in, though this protection has limits.

What is the difference between a Sdn Bhd and a limited liability partnership (LLP)?

Both give you limited liability and are separate legal entities, but they are set up under different laws. A Sdn Bhd follows the Companies Act 2016 and has directors and shareholders, while an LLP follows the Limited Liability Partnerships Act 2012 and needs at least two partners. Which one suits you depends on your plans, so it is worth discussing with a lawyer or company secretary.

What do I need to set up a private limited company in Malaysia?

You need at least one director who ordinarily lives in Malaysia, and at least one shareholder — and one person can be both. The minimum paid-up capital can be as low as RM1, though many businesses start with more. You must also appoint a licensed company secretary within 30 days, and the company is registered with SSM through its online system.

Do I need a company constitution?

Under the Companies Act 2016, a private company is not required to have a constitution. If you do not adopt one, the rights and duties of the company, its directors and its members follow the rules in the Act. Many businesses still choose a constitution so they can set their own rules, for example on how decisions are made. A lawyer can help you decide whether one is useful for your business.

What are the main duties of a company director?

A director must act honestly and in good faith in the best interest of the company, use their powers for a proper purpose, avoid conflicts of interest, and exercise reasonable care, skill and diligence. These duties come from the Companies Act 2016 and from case law, and breaking them can lead to personal liability or penalties. If you are unsure about a decision, it is wise to get advice before you act.

What is a shareholder agreement, and do I need one?

A shareholder agreement is a private contract between the owners of a company. It can set out how big decisions are made, how profits are shared, what happens if an owner wants to leave, and how disputes are handled. It is not required by law, but it can help prevent misunderstandings later, especially when there is more than one owner.

How do I transfer shares in a company?

Shares in a Sdn Bhd are usually transferred using a share transfer form and by paying stamp duty. The company's constitution or a shareholder agreement may set conditions, such as offering the shares to existing shareholders first. The transfer must be recorded by the company and reported to SSM. Because tax and legal issues can arise, it is a good idea to get advice before transferring shares.

What is due diligence when buying or selling a business?

Due diligence is the checking you do before you buy, sell, or invest in a business. It usually means reviewing the company's contracts, licences, finances, assets, and any legal problems, to reduce the chance of surprises after the deal. This helps you understand what you are really getting and can affect the price and the terms.

What is beneficial ownership reporting, and does it apply to my company?

Beneficial ownership reporting means telling SSM who the real people are that ultimately own or control your company. Since changes to the Companies Act 2016 took effect on 1 April 2024, companies must keep a register of their beneficial owners and lodge this information with SSM. This applies to most companies, and there are deadlines for recording and updating the details.

What ongoing filings must my company make with SSM?

Every company must keep proper records and make regular filings with SSM, usually including an annual return and financial statements, plus updates when things change, such as a new director or a change of address. Missing deadlines can lead to penalties for the company and its directors. A licensed company secretary usually handles these filings.

Corporate Law Services for Businesses in Malaysia | Khaw Ewe Seng & Co

We help Malaysian businesses set up companies, meet SSM requirements, and handle shareholder, director and corporate matters under the Companies Act 2016.