Incorporation of Company
Registering a new business is a manageable and relatively simple task to undertake. It can be done by anyone with age 18 and above. The procedure starts with the consideration of which one of three recognized legal structures the business should fall under.
Firstly, there is the sole proprietorship. Here, the business owner is the one and only member of the business and therefore has absolute independence in the decision-making process of the business.
The second business structure is the partnership. This allows for two or more persons (with a maximum of 20) to own the entire business collectively as joint owners.
The above two business structures are considered unincorporated associations, in that there is no separate legal existence apart from the business owner.
The third form, however, is to incorporate the business as a company. Forming a company via incorporation means that a separate legal entity is established. The number of members in a company is unlimited (except for private companies where the maximum number of members is 50.
Once the business owner has considered the different aspects of the various forms of business structures and has decided which structure to use, he then has to register his business.
With regards to sole proprietorships and partnerships, the Companies Act 1965 and Registration of Business Act 1956 makes it a requirement to register the business with the Companies Commission of Malaysia. The Commission’s guidelines firstly, that the business owner obtain approval for his proposed name for the business. Subsequently, he is required to complete the Commission’s Form A (Registration of a New Business). This includes detailing the application’s particulars, the date at which the business commenced, the nature of the business and the branch (or branches) of the business.
Incorporating a company, however involves several more processes. Since these processes may be technical and complex, employing the services of a Company Secretary will ensure that all aspects have been taken care of.
The first step is to enter a completed Form 13A to obtain the Commission’s approval for the proposed company name. The application must come with an accompanying fee of RM30 for every name applied for. If approval is granted, the proposed name is reserved for the applicant for three months.
While the proposed company name is being reserved, the business owner will have to submit the following documents.
- Memorandum and Articles of Association: These two documents must name the directors (at least two) and the Company Secretary involved. A standard set of the Memorandum and Articles of Association are in the Companies Act 1965 and can be used in its entirely or as an example. Both documents must be stamped at a stamp office for RM100 each.
- For private limited companies, the documents must expressly restrict the right of its members to transfer shares, limit the number of members to not more than fifty and prohibit any invitation to the public to buy its shares / debentures or a stamp office for RM100 each.
- Form 6 is also known as the Declaration of Compliance. It is a declaration that is made and signed by the Company Secretary and must state that all the requirements under the Companies Act 1965 have been complied with.
- Original copy of Form 13A.
- A copy of the letter approving the proposed company name;
- A copy of the identity cards of the directors and Company Secretary; and
- The requisite registration fees based on the company’s share capital:
|
Authorised Share Capital (RM) |
Fees (RM) |
|
Up to 100,000 |
1,000 |
|
100,001 – 500,000 |
3,000 |
|
500,001 – 1 million |
5,000 |
|
1,000,001 – 5 million |
8,000 |
|
5,000,001 – 10 million |
10,000 |
|
10,000,001 – 25 million |
20,000 |
|
25,000,001 – 50 million |
40,000 |
|
50,000,000 – 100 million |
50,000 |
|
100,000,001 and above |
70,000 |
When the registration is in order, the Commission will issue the Certificate of Incorporation (Form 8 for the public company and Form 9 for the private company).
Once this is completed, the business owner may now run his business with an officially recognized business structure. It will look good on the newly designed business cards and we wish him all the best.
Joint us as a member of JUTALINE, you will enjoy the service of a group of our professional consultants in providing you with our professional advise through our web and emails.
Why hassle with the research of the rules and regulations, engage us to conduct on the necessary research just for you.
Join us now!
|
