rEGISTER A BERHAD COMPANY

What is Berhad (BHD) ?

Berhad, BHD, or Bhd after a company’s name indicates that it is a Malaysian public limited company (PLC). BHD companies are the largest companies in Malaysia. BHD companies have stricter financial reporting standards because they must disclose their financial statements to the public.

The liability of berhad company is limited. It is limit to the amount paid by its owner only. If the owner has fully paid his shares, he is no longer need to contribute money to the company even in the event of its bankruptcy. Berhad company also has a separate legal entity like a normal human being. They can borrow, buy, rent, enter into contracts, sue, be sued, own property and real estate in the company name without involving its owner’s name.

Shares of berhad company can be offered to anyone including the public. In order to ensure the sale of shares of berhad company can be carried out effectively, the company may choose to be listed on the Kuala Lumpur Stock Exchange (KLSE). For this purpose, the company must comply with the listing guidelines issued by the Securities Commission Malaysia (SCM). Although most BHD companies list their shares and trade on a stock market, they can choose to stay unlisted.

At the end of every year, the berhad company is required by the Companies Act 1965 to:

  1. Complete the audited reports and lay before the Annual General Meeting (AGM) of the Company.
  2. Holding an Annual General Meeting of the company.
  3. Lodge a company’s annual report to the CCM.

The company’s failure to comply for three mandatory requirements above may cause the company and its directors be compounded by CCM and if convicted in court can lead to a higher penalty.

Berhad company will continue to exist even with any changes that occur to its owner. It is also will not close despite the death of all of its owner. It will continue to exist unless the proper closure procedure against it was done either through the CCM or the courts.

What is the differences between Sdn Bhd and Berhad?

Below are the differences.

Financial Reporting Standards

One of the main differences between the two types of companies would lie in the financial reporting standards required of them. Since public companies have to publicly disclose their financials, a higher financial reporting standard is usually expected from them

Maximum Number Of Shareholders

Private limited companies (SDN BHD) can only have a maximum of 50 shareholders whereas public companies (BHD) can have an unlimited amount of shareholders.

Publicly Available Financial Information

Public companies (BHD) are required to make their financial information publicly available for the public to access. If they are a public listed company, they would also be required to hold quarterly earning calls and answer any questions that their public shareholders might have for them.

Publicly Available Shares

The public can freely subscribe to shares of public companies (BHD) while public individuals can only own shares in a private limited company through a shareholders’ agreement with the approval of existing shareholders of the private company.

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