What is a Public Limited Company (Bhd.) in Malaysia?

If you’re thinking about taking your business to the next level in Malaysia, you’ve probably come across the term “public limited company” or “Berhad (Bhd.)”. This business structure is a popular choice for companies aiming for growth, credibility, and access to public investment. Here’s a straightforward guide to what a public limited company is, how it works in Malaysia, and whether it’s the right fit for your business.

What is a Public Limited Company (Bhd.)?

A public limited company (Bhd.) in Malaysia is a business entity that can offer its shares to the public and is often listed on the stock exchange (Bursa Malaysia). The “Berhad” or “Bhd.” suffix signals that the company is public, distinguishing it from private limited companies (Sdn. Bhd.), which cannot offer shares to the public.

Types of Business Entities in Malaysia

• Sole Proprietorship: Owned by one individual, simple to set up, but the owner is personally liable.
• Partnership: Owned by two or more people, with shared liability.
• Private Limited Company (Sdn. Bhd.): Limited liability, but shares are not offered to the public.
• Public Limited Company (Bhd.): Can raise funds from the public, suitable for larger businesses.
• Limited Liability Partnership (LLP): Combines features of partnerships and companies.
• Company Limited by Guarantee: Usually for non-profits.
• Foreign Company: Branches of overseas companies registered in Malaysia.

Why Choose to Be a Public Limited Company (Bhd.)?

Many businesses in Malaysia opt for the public limited company structure because it opens doors to:

• Easier access to capital: You can raise funds by selling shares to the public.
• High credibility and trust: Being a Bhd. signals stability and transparency, which attracts investors and customers.
• Growth opportunities: The ability to raise large amounts of capital supports expansion and innovation.
• Share liquidity: Shares can be bought and sold easily, making it attractive for investors.

Core Structure and Requirements of a Public Limited Company (Bhd.)

To set up a public limited company in Malaysia, you’ll need to meet these requirements:

Key Features and Advantages of Bhd.

Features

• Limited Liability: Shareholders’ liability is limited to their investment.
• Public Share Trading: Shares can be offered to the public and traded on Bursa Malaysia.
• Minimum Share Capital: Low legal minimum, but practical requirements are higher for listing.
• Separate Legal Entity: The company is distinct from its owners.
• Board of Directors: Managed by a board, ensuring professional governance.
• Transparency and Reporting: Subject to strict disclosure and reporting standards.

Advantages

• Ability to raise large capital: Through public share offerings and bonds.
• Increased business credibility: Public status boosts trust with stakeholders.
• Share liquidity: Investors can easily buy and sell shares.
• Growth and expansion potential: Easier to fund new projects and enter new markets.
• Better talent attraction: Public companies often attract top talent with share-based incentives.
• Higher company valuation: Public companies are often valued higher due to transparency and liquidity.

How to Register a Berhad Company in Malaysia

Minimum Requirements

• At least 2 directors (aged 18+, one must reside in Malaysia)
• At least 1 shareholder (individual or corporate)
• Registered office in Malaysia
• Qualified company secretary

Steps to Incorporate with SSM

1. Name Search & Reservation: Reserve your company name via the MyCoID portal.
2. Prepare Incorporation Documents: Includes company constitution (optional), director and shareholder details, and statutory declarations.
3. Submit Application: File documents and pay the registration fee (RM1,000 for public companies).
4. Receive Certificate of Incorporation: Issued by SSM, usually within 5–7 working days if all documents are in order.
5. Appoint Company Secretary: Must be done within 30 days of incorporation.
6. Apply for Certificate to Commence Business: Required before starting operations.

Timeline and Costs

• Timeline: 5–7 working days (if documents are complete)
• Costs: RM1,000 registration fee (excluding professional fees, if using a service provider).

Advantages of Operating as a Public Limited Company

• Access to capital markets: Raise funds from the public and institutional investors.
• Enhanced credibility and public trust: Public status signals stability and transparency.
• Business expansion potential: Easier to fund and execute large-scale projects.
• Tax benefits and financial transparency: Subject to clear tax rules and financial reporting, which can attract investors.

Challenges of Running a PLC in Malaysia

• Higher regulatory burdens: More rules and reporting requirements.
• Public scrutiny and accountability: Operations are open to public and media attention.
• Cost of compliance and disclosure: Legal, audit, and compliance costs are higher.
• Risk of loss of control: Public shareholding can dilute founders’ control over the company.

Examples of Successful PLCs in Malaysia

Some of Malaysia’s most prominent companies are public limited companies (Bhd.):

These companies leverage their PLC status to raise funds, expand internationally, and attract top talent.

Is a Public Limited Company Right for Your Business?

Who Should Consider Registering as a PLC?

• Businesses aiming for large-scale growth and public investment
• Companies seeking to build credibility and attract institutional investors
• Firms planning to list on Bursa Malaysia

Alternative Business Structures

• Sdn. Bhd. (Private Limited): For smaller, closely-held businesses
• LLP (Limited Liability Partnership): For professional partnerships
• Sole Proprietorship: For small, owner-managed businesses

Decision-Making Checklist

• Do you need to raise large amounts of capital?
• Are you prepared for public scrutiny and compliance?
• Is your business model scalable and attractive to public investors?
• Do you have a strong management team and governance structure?

Conclusion

A public limited company (Bhd.) in Malaysia is a powerful vehicle for businesses with big ambitions. It offers access to capital, credibility, and growth opportunities, but comes with higher compliance and public accountability. If you’re ready to scale and play on a bigger stage, a Bhd. could be your ticket to success. Always consult with a qualified company secretary or corporate advisor to ensure you’re making the best choice for your business goals.

For more details on company registration and compliance, check out the Companies Commission of Malaysia (SSM) and Bursa Malaysia websites for the latest updates and resources.