Knowing The Different Types Of Companies In Malaysia

A Simple Introduction On Types Of Companies in Malaysia

Whether you are looking to start your own business in Malaysia, or are just wondering out of the blue, it is always good to know about the different types of business entity in the country. Malaysian company types, like in any other country in the world depends on its business activities. Here are the different types of companies in Malaysia according to the Malaysia Companies Act.


Sole Proprietorship

This is a type of business in Malaysia under a single individual. The liabilities of the business associate the person’s bank account, and it is the simplest type of company in Malaysia. You will gain a lot of freedom with a sole proprietorship, but at the same time, it is a business type with the most risk. Sole proprietorships in Malaysia don’t need to submit audits or do annual fillings. Only a yearly fee is required to be paid to the companies commission Malaysia (SSM).



As its name suggests, different partners come together to form the business. In Malaysia, the concept of partnership is pretty simple, it is similar to a sole proprietorship, only that multiple people are running the business. Anyway, in a partnership, every individual has rights to the business according to the agreement and investment contribution. There can be two to twenty partners contributing to business in Malaysia.

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Limited Companies

Private Limited Company

In Malaysia, the term Sendirian Berhad (SDN BHD Company Malaysia) is used to denote a private limited company. A private limited company can exist as a separate legal entity, and it is necessary there be shareholders and board of directors.  This is a “company’ in general terms, meaning that there are employees, offices, contracts, going into debts, dissolving, and other office concepts.

Public Limited Company

It is similar to a private limited company only that the share of the public limited companies in Malaysia are open to the public.  This is a type that suits bigger businesses and is not so suitable for startups.


Limited Company, Factors Of the Business Shares

Company Limited By Shares

Under this category, the liability of the contributor depends on the contribution made on shares. If a company goes bankrupt or dissolves, members may not pay the debts, as long as there are no agreements beforehand.

Company Limited By Guarantee

The individual rights of a contributor depend on the initial agreement. It depends on how much they can guarantee to invest in the company in a specific time frame.  Companies Limited By Guarantee are usually non-profit organizations.


Limited Liability Partnership (LLP)

In simple terms, this is a mixture between partnership and a limited company. The advantage of such a company is that it can exist as a separate legal entity. This keeps its finances different from the partner’s personal funds. This is a newer type of business model and is yet to be fully implemented in Malaysia.

Knowing The Different Types Of Companies In Malaysia


Foreign Companies

This term in Malaysia does not usually apply to a company opened by a foreigner in Malaysia. Instead, it’s more of a branch or subsidiary of an international brand in the country. It is a must for any foreign company to have at least two directors. They should be Malaysian citizens or permanent residents.

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These were the types of companies in Malaysia. I hope this article helped you.