• Leslie Quak

What are The Advantages of a Sdn Bhd?

Why choose Sdn Bhd?

Those who are interested in starting a business in Malaysia may select one of several business entities available to be registered under SSM. Prospective business owners may utilize a sole proprietorship, partnership, or private limited company (also known as a Sendirian Berhad or Sdn Bhd company).  For most people who conduct business operations in Malaysia, the Sdn Bhd company is the preferred choice because it has numerous advantages with regard to legal matters as well as the raising of financial capital.

A Sdn Bhd company is a private company which is limited by shareholding. This type of company is a separate legal entity from its owners. This means that the company is considered a legal ‘person’ that may buy or sell property, enter into legal contracts, and sue or be sued in courts of law.


Sdn Bhd provides limited liability protection to shareholders (i.e. business owners). This means company owners are typically not personally responsible for business debts and liabilities.


The limited liability protection protects the entrepreneurs against trading losses, especially when working within an unstable and ever-changing economic climate. Company will be responsible for its own debts and trading losses rather than shareholders or owners. The shareholders’ personal assets will remain protected from business creditors and their liability will be limited to their share amount.

There are several advantages incorporating a “Sendirian Berhad” Company, amongst which are listed below:-


What are the advantages of a Sdn Bhd?

  • Limited liability protection

Shareholders/Owners’ personal assets are not put at risk should the business fail. Shareholder’s liability is limited to the amount of share subscribed. 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.


  • Easy transfer ownership

Ownership is easily transferable through the sale of shares.


  • Raise capital more easily

Additional capital can be raised by selling shares to new investors (not allowed to sell shares to the public)


  • Clients or Commercial partners will have more confidence when dealing with your company

Sdn. Bhd. may be perceived as a more professional or legitimate entity than a sole proprietorship, conventional partnership or limited liability partnership.


  • Easier access to funding

Forming a company will add to your business credibility. This makes it easier to secure finance for your business with less personal risk.


  • Greater tax advantages

More business expenses may be tax-deductible and SMEs enjoy preferential lower tax rates and various tax incentives.


  • Conversion into Public Listed Company

Should the company grow to a level that needs significant funding from the public, then Sdn. Bhd. can be converted into a Public Listed Company.

Everyone who owns or plans to own a Sdn Bhd company must fulfill all necessary requirements before the company can be incorporated. Owners may use the services of a company incorporation service provider to expedite the process of incorporation. Such providers also supply company owners with valuable advice which will aid in the incorporation and operation of the Sdn Bhd company.


If you are thinking of starting your own business, talk to us today about setting up your Sdn. Bhd. company. We are a group of professional Company Secretaries who offer end-to-end business services and are more than happy to get in touch with you to answer your questions with no obligation at all! Call us today at 012-2297733 or email us at general@ashtoncorporate.com


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