Incorporation Of Company : Step 1

Incorporation Of Company Step 1

Choosing The Name

Once you have decided which business vehicle (Also see Types of business structures in Malaysia) you want to adopt for you to conduct your trade, you should then consider the formality involved in legalising your business vehicle. Ordinarily, you can legalise your business vehicle by registering your company with the Suruhanjaya Syarikat of Malaysia (SSM).

Choosing The Name Of Your Company

Before you can take any steps to incorporate a company, you must first propose a name for the company and make an application to the Registrar of Companies who shall then conduct a search on the availability of the proposed name.

It must be kept in mind that the Registrar has a discretionary power to reject any proposed name that he thinks is undesirable, identical or resembling any existing companies’ name or with other proposed name.

Furthermore, the Registrar must also refuse to incorporate a company if the proposed name falls under the category of names prohibited by the Minister of Domestic Trade and Consumer Affairs. If the proposed name falls under such category, you can still register your company with such name if you had obtained an approval by the Minister to use such name.

Generally speaking, any names can fall under the category of prohibited names if it contains:-

a) Any word that may imply royal patronage or suggest connection with any royal family, state or federal government, government agency, foreign government or international-governmental organisation;

b) Names that tends to mislead outsiders dealing with the company of its identity, nature of business, or its objects and purposes; and

a) Any word that is blasphemous or likely to be offensive to particular section of society or government or organisation.

Statutory Requirement On Names

Furthermore, it must also be noted that under the Companies Act 1965, a limited company must have the word “Berhad” or its abbreviation “Bhd” at the end of the proposed name.

If the company is a private company, it must also have the word “Sendirian” or its abreviation “Sdn” in the company’s name, inserted immediately before the word “Berhad” or “Bhd” if that company is a private limited company.

If the company is an unlimited private company, then the word “Berhad” or “Bhd” shall be omitted and the company’s name shall end with “Sendirian” or its abbreviation “Sdn”.

It is important to be aware that the improper use of the words “Berhad” and “Sendirian” and its respective abbreviation is an offence under the Companies Act 1965 and is punishable with imprisonment of 3 years or a fine of RM 50,000.00 or both.

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