If you want to incorporate a company in Malaysia, there are a lot of forms of business (Also see Guidelines on Registering New Businesses) entities that you can choose from. Some of the business entities include sole proprietorship, partnership, limited liability partnership (LLP), a private limited company (Sdn. Bhd.) and public limited company (Bhd.). Before you set up your own company, you should study their differences and seek advice from a company registration service in Johor Bahru if necessary. In this article, we will have a look at the private company, which is one of the most popular choices among new business owners.

If you own a company limited by shares with less than 50 shareholders, you may register it as a private company, change its status to make it a private company, or let your company remain as a private company. Note that the joint holders of shares should be considered as only one individual. If a person is or was the company’s or its subsidiary’s employee when they become a shareholder, he should not be counted as a shareholder.

For private companies, there is a restriction on the transfer of shares. If a private company stops restricting the transfer of shares, stops having a share capital, or its number of shareholders have exceeded 50 persons, the Registrar should issue a notice to that company to notify it that on the date stated in the notice, it will no longer be a private company.

 If the Registrar has determined that a company (Also see Indicators of a Company’s Decline in Going Concern) has stopped being a private company, the company should become a public company, and it should be judged as a public company (Also see Guidelines on Incorporating Local Companies) from the date stated in the notice onwards. Also, on the specified date, the company should change its name by omitting the word “Sendirian” (or “Sdn.”) from its name. Besides, there are some documents that the company should submit to the Registrar in 14 days from the date the notice is issued. The documents include a statutory declaration which confirms that the company has complied with paragraph 190(1)(b) of the Companies Act 2016, as well as a statement in lieu of prospectus.

As the determination of the company’s status as a public company is made under such a condition, the company cannot change itself to a private company if it does not get the leave of Court. If the company or any officer failed to adhere to these requirements, they have committed an offence.