1. Why do I need a company secretary?

Section 139 of the Companies Act 1965 requires every company to have one or more secretaries each of whom shall be a person of full age who has his principal or only place of residence in Malaysia.

The Company Secretary must be a ‘qualified person’ pursuant to Section 139A of the Companies Act:

i) Member of the Association of the Institute of Chartered Secretaries and Administrators (MAICSA)
ii) Member of the Institute of Accountants (MIA)
iii) Member of the Association of Certified Public Accountants
iv) Member of Bar Council i.e. Advocates and Solicitors
v) Licensed Secretary i.e. he must obtain license by CCM to act as Company Secretary

2. Who can become a director of a Private Limited Company?

(i) A person must be of age 18 years and above
(ii) A person must not be an undischarged bankrupt
(iii) A person must not have been convicted whether within or outside Malaysia of any offence:

(a) in connection with the promotion, formation or management of a corporation
(b) involving fraud or dishonesty punishable on conviction with imprisonment for three months or more, or
(c) under section 132, 132A or under section 303, within a period of five years preceding the date of the declaration

(iv) A person must not have been imprisoned for any offence referred to the above offences within the period of five years preceding his appointment

3. Can a foreigner become a director of a company in Malaysia? Is there a minimum number of directors a company must have?

Yes, a foreigner can become a director of a company in Malaysia. However, at all times during the existence of the company, the company has to have at least 2 directors who each has his principal or only place of residence within Malaysia to comply with section 122(1) of the Companies Act 1965.

4. How long does it take to incorporate a company?

It will take 5 business days for the Registrar to revert with the availability of the proposed name of a company and the certificate of incorporation. This excludes time required to procure signatures of your shareholders and directors. We are able to revert with the documentation for the incorporation of a company within 24 hours of your instructions.

5. What is the difference between a shelf company and a newly incorporated company?

A shelf company is an existing company formed with a RM2 paid up share capital, 2 local directors and 2 shareholders holding 1 share each and an authorised share capital of RM100,000. The articles in the M&A are adopted from Table A of the Companies Act. Upon purchase of a shelf company, the existing directors resign and the shares are transferred to the new owner. You may commence business immediately thereafter. This option should be considered if a company is required instantaneously.

To incorporate a new company, an approval from the Registrar for the use of a proposed name is required. Thereafter the company secretary prepares the necessary documents for incorporation for filling based on the information provided. You may commence business after the issuance of the certificate of incorporation by the Registrar. In practice, a company is usually incorporated within 2 weeks. The object clauses, directorships, shareholdings and Articles of Association will be tailored in accordance to your request.

6. Are there any restrictions for use of certain words in the company name?

The approval from the Ministry of International Trade and Industry is required for names which are listed in the Minister’s direction as gazetted under the Government Gazette. Names, which in the opinion of the Registrar are “undesirable” will not be approved. Names which are similar to existing corporations require further supporting documents to be submitted for consideration by the Registrar.

7. Why do I need a registered office address?

Sections 119 and 333 of the Companies Act 1965 require a company to have a registered office within Malaysia to which all communications and notices are addressed to. A penalty of RM1,000 will be imposed if this is not complied with.

8. What are the statutory requirements that I need to comply with annually?

Annual General Meeting (AGM) must be held once in every calendar year as stipulated in Section 143 of the Companies Act 1965. Additionally, the Annual Returns of the company need to be filed to the Registrar together with the Audited Accounts once every calendar year.

9. What is authorised share capital?

Authorised share capital is the ceiling of capital available for issue. For example, if the company’s authorised capital is RM100,000.00, that means the company can only increase its paid up capital to a maximum of RM100,000.00. The company may increase its authorised capital anytime by holding an EGM (Extraordinary General Meeting). A fee is payable to the Companies Commission of Malaysia for the increase of authorised share capital.

10. What is the paid-up capital?

Paid up capital is the amount of issued share capital that has been called and paid up by the shareholders, either by way of cash or otherwise than cash. Once the capital is fully paid up and the documentation for such increase has been completed, the company may use the funds for purchase of assets, renovation, stocks procurement or for working capital purposes.

11. Is there a minimum paid up capital that a company must maintain?

Pursuant to the Companies Act 1965, the minimum paid up capital to be maintained by a company is RM2. However, there may be certain requirements imposed by the Malaysian regulatory bodies which require a company to have a higher paid up capital. For example, if you need to employ an expatriate in the company, the minimum paid up capital required for a company which is 100% held by foreign shareholders is RM500,000.