Malaysia is a southeast Asian nation. The country has immense natural resources, huge cultural diversities and strong business opportunities. When we are talking about business, among other business curriculums, starting a Limited Liability partnership in Malaysia remains one of a kind business structure.
Every year thousands of corporate applicants move into Malaysia with a vision of start a company in Malaysia. The country’s authority at the same time allows various business structures so that opportunists never miss their chance of company buildup in this land. Invests therefore have a good number of choices, among which they can choose their company structure.
Following are the popular business structure from where an investor can choose his/her preferred company type during business registration process in Malaysia.
- Sole Proprietorship company
- Partnership company
- Limited Liability Company (LLC)
- Public Limited company (PLC)
- Limited Liability Partnership (LLP)
- Company limited by Guarantee
- Foreign company
Here in this article we will imply focus on only Limited Liability Partnership company structure in Malaysia. We will try to understand LLP company, its key features, the investors type preferable for this type of company, comparison with partnership company, advantages and limitations and finally some renown LLP company running in Malaysia.
What is LLP in Malaysia?
Limited Liability Partnership (LLP) is a business structure which is governed under the Limited Liability Partnerships or LLP Act 2012 in Malaysia. This type of company has both the characteristics of a limited liability company and a traditional partnership business.
Who should go for LLP in Malaysia?
As this is a legal business entity, any entrepreneur can choose this business structure in Malaysia. If preferred to make profitable business, this type of business can bring fortune as the company type both includes LLC and partnership company characteristics.
Therefore, professionals from law backgrounds, accounts and finance firms, company secretaries, any types of startups etcetera can consider LLP formation for the purpose of carrying out businesses.
In an addition, with that, this type of setup also goes well with small to mid-size entrepreneurship known as SME businesses. Companies under this particular structure ensures safety of personal assets and business compliance at corporate scenario.
Preferable business fields for LLP
All business personal can choose LLP platform for their company formation. However, the list below listed out target corporate groups which prefers LLP business platform for their business:
- Various professionals. For example, legal, company secretariat, finance firms
- Small and medium entrepreneurship (SME) business
- Joint stock company
- Venture capital business
Key features of Limited Liability Partnership in Malaysia
LLP company feature has been launched in Malaysia on the month of February 2013. It is an alternative business path that offers flexibility of internal arrangements that company partners carry out through custom agreements.
Limited Liability partnership company comes up with several key features that one must keep in mind before hop into the business. Following are the highlighted features of LLP at a glance:
- LLP is a separate legal entity just like Limited Liability Company (LLC).
- LLP, being separate entity, keeps partners safe from personal liabilities and bear all obligations and legal complains to itself.
- This company manifesto undertakes any possible legal obligations and has a full capability to sue other entities if needed.
- The company structure follows perpetual succession.
- It is preferable for all kind of businesses that aims to make profit.
- This type of business formation offers flexibility of both limited liable as well as partnership characteristics in a single company structure.
- Any alteration of partners in the company doesn’t affect the policy attributes, rights and liabilities of the limited Liability Partnership company in Malaysia.
Information required for setup a Limited Liability Partnership
Following are the mandatory information which you must carry to the SSM in order to proceed for the registration of the LLP in Malaysia:
- Filling up the form of trade name proposal
- Drafting forms that describes nature of business
- Name and detail of business partners
- Detail address of new office premises
- Detail information of company’s compliance officer and company secretary
- Letter of approval from already exited corporation if asked.
Eligibility criteria for LLP registration in Malaysia
To register for an LLP company in Malaysia, investors has to meet a list of criteria. Once the criteria are fulfilled, and proper documents are submitted accordingly, it is just a matter of time when SSM in Malaysia approves a particular LLP business. Here are the eligibility criteria of LLP venture in Malaysia:
- LLP formation in Malaysia requires at least two partners to form the company.
- At least one of the partners has to be qualified to take position as a company secretary under the compliance of Companies Act 1965
- Partners in this type of company has to be at least 18 years or over.
- Partners have to be physically present or live in Malaysia.
- LLP demands an appointment of a compliance officer which is unique from conventional LLC business in Malaysia.
- For any lawful business for the purpose of making a profit; and
- In accordance with the terms of the LLP agreement.
Cost for Limited Liability Partnership registration in Malaysia
LLP or Limited Liability Partnership company registration is way cheaper when compared with Private limited business or LLC company registration. When compared it shows that LLP incorporation cost less than half of what a conventional LLC consumes during incorporation process.
At typical condition, LLP formation requires RM 500 as company registration fees. A further RM30has to be paid for company name registration and finally about RM 47.7 has to be submitted to claim for the company certificate.
Therefore, the total registration cost of an LLP should not be more than RM578. Here are the cost evaluation of LLP formation in this country:
- LLP company registration fees- RM500
- Company name registration fees- RM30
- Company certificate fees – RM47.7
Detail registration process of an LLP company in Malaysia
To conduct an LLP business in Malaysia owners or partners need to go through some company registration requisitions. Below are the detail steps of limited liability partnership company (LLP) registration process in Malaysia that has to be undertaken first before operating in corporate fields of this nation.
- Create an online account by signing up according to the instructions on MYLLP System myllp.com.my is the link site from where you can get this account registration form. At the end of successful registration, a confirmation mail supposes to appear in applicants mail address.
- This confirmation mail will be sent by the MYLLP System authority. Copy and print this mail confirmation accordingly, as this will be required later on by the SSM.
- Visit to the nearest SSM office with all company documents and confirmation mail printout as recommended by the SSM authority.
- The printout will be placed to the SSM authority, upon verification, authorized personnel will provide a login ID and password.
- Login to the MySSM System using the given username and password and register your company trade name. You will find options where you can check availability of your chosen name. A fee of RM30 will be charged for reserving the company name.
- The company registration form will be available after three working days. You have to login to the MYSSM System website to get the company registration form. Using your company’s reserved name, you can carry out the registration procedures further in this website.
- Confirm the company name and proceed to the company registration form
- Provide all information asked in the form, such as LLP details, compliance officer details, detail information of partner/ partners in the company.
- You need to select a business code in the registration form. Each code basically defines different business niche, which will come as drop-down menu for your selection. You can choose multiple codes as per your business preference.
- Confirm your registration detail and proceed for the payment option.
- A payment of RM500 has to be paid for registering the LLP in Malaysia. The payment has to be cleared through online credit card payment option, or through manual submissions to the nearest SSM office.
- Once payment is completed, you will get a confirmation mail that declares successful LLP company registration completion.
- Apply for the company certificate. You need to pay a cash payment of RM47 for submitting the completed form to the SSM.
- Your certificate will be issued within 3 working days after submission. You can come to the SSM and collect your LLP company certificate, with that your LLP registration process took a successful end.
How much I have to pay for opening an LLP in Malaysia?
The cost of LLP company registration is very cheap when compared with other company formation in Malaysia. It should not cross more than RM580 for the whole registration process.
At least how many partners are needed for LLP formation in Malaysia?
Minimum 2 partners have to be available for LLP company formation.
How much fees SSM takes for the company certificate preparation of LLP?
A cash payment of RM 47 has to be paid to the SSM for issuing an LLP company certificate.
Do I need to hire a company secretary for LLP?
Not necessary. As LLP is free of statutory formalities or relevant formalities conducted by the company secretaries in a typical LLC companies, secretary is not needed.
What are the 5 major types of business categories in Malaysia?
Main types of company formation in Malaysia are:
- Sole proprietorship
- Limited Liability partnership (LLP)
- Limited liability company (LLC) also called Sdn Bhd
- Public limited company (PLC) Also called Bhd
For business setup: