Limited Liability Partnership(LLP)
The Limited Liability Partnership or LLP is a hybrid between a partnership and private limited company. It is similar to the conventional partnership but with the advantages of a private limited company. Below are some of the features of LLP:
- It is a body corporate and a separate legal entity from its partners.
- LLP has perpetual successions
- The LLP is capable of suing and being sued, acquiring, owning, holding and developing or disposing of property.
- LLP has fewer compliance requirements and is a much more affordable business vehicle. For instance, LLP is not required to audit its accounts annually.
Private Limited Company / Sendirian Berhad (Sdn Bhd)
A private limited company by shareholding is known as Sendirian Berhad (Sdn Bhd) Company. This type of company is a separate legal entity from its owners, which means this company is considered as a legal ‘person’ that can buy or sell property, present into legal contracts, sue or get sued in courts of law.
Choosing this type of entity allows an entrepreneur to keep their finances and assets separately from the business. This means that the people who have invested in the business, namely the shareholders, are only responsible for any company debts up to the amount that they have invested and no more. Hence, this type of entity is a good way for a company to get investment without risk to a personal wealth.
While a private limited company is a viable option for most businesses, this one of the most common type of business recommended for foreign owners. Foreigners are allowed to register a Sendirian Berhad (Sdn Bhd) here with 100% foreign ownership, but some industries will need to have 50% Malaysian ownership and these industries include oil and gas, education, tourism, agriculture and banking. If your business falls outside of these industries, then you are eligible to be a 100% foreign owned Sdn Bhd.
Public Limited Company / Berhad(Bhd)
A public limited company or Berhad (Bhd) is rather similar to private limited companies except that its shares can be offered to the public for fixed periods and any other forms of subscription. Public limited companies are required to have a minimum of 2 shareholders and has more than 50 members and maximum number of members is unlimited. This type of business entity usually involves the company being listed and is governed by the Securities Commission of Malaysia. Public listed companies are usually the preferred business model for large businesses.