Limited Liability Partnership in Malaysia

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LLP in Malaysia

A Limited Liability Partnership in Malaysia is a substitute business vehicle structured under the Limited Liability Partnership Act 2012 that syndicates the features of the company and the conventional partnership.

The business structure of a Limited Liability Partnership is designed for the lawful business to make a profit. The professionals can form a Limited Liability Partnership in Malaysia, which consists of lawyers, company secretaries, and charter accountants, to carry on their professional practices. The Limited Liability Partnership in Malaysia is a concept in which there is support for start-ups and small and medium businesses to grow their businesses without any worry of too many individual liabilities, personal assets, and strict compliance necessities.

Features of the Limited Liability Partnership in Malaysia

The Features of the Limited Liability Partnership in Malaysia are as follows

  • The business structure of the Limited Liability Partnership in Malaysia is the distinct legal organization from the partners of the Limited Liability Partnership in Malaysia. That means the Limited Liability Partnership protects the partners restricted responsibility.
  • From partnerships that look like traditional partnerships, the Limited Liability Partnership also offers the flexibility of the internal business norms.
  • In a Limited Liability Partnership in Malaysia, the partners are exclusively accountable for the conduct and will not be answerable to their fellow members.
  • The Limited Liability Partnership's legal standing in Malaysia as a business entity means it can have properties, engage in other legal actions on its behalf, and be capable of being sued and getting sued by others.
  • The Limited Liability Partnership in Malaysia has cheaper maintenance expenditures and fewer legal compliance obligations than private limited companies.

Eligibility for Limited Liability Partnership in Malaysia

For the registration of an LLP in Malaysia, investors have to follow the following criteria: Once your eligibility is met and all the documents are submitted, then in just a matter of time, SSM in Malaysia will approve the Particular Limited Liability Partnership in Business. The eligibility criteria are as follows

  • The formation of a Limited Liability Partnership in Malaysia needs at least 2 partners.
  • There should be at least one partner who is qualified for the position of company secretary in compliance with the Companies Act 1965.
  • The age limit in Limited Liability Partnerships in Malaysia has to be at least 18 years or over.
  • The Partners in Limited Liability Partnership should be physically present or live in Malaysia.
  • The appointment of a compliance officer is demanded in a Limited liability Partnership in Malaysia, which is exclusive from the conventional LLC business in Malaysia.
  • Your limited liability partnership should be for lawful business with the motive of making a profit.
  • It should be in accordance with the terms of the LLP agreement.

Documents needed for LLP in Malaysia

To enable the registration process of the Limited Liability Partnership in Malaysia, the following documents are needed to submit to Suruhanjaya Syarikat Malaysia (SSM) which are as follows:

  • Name of Limited Liability Partnership in Malaysia
  • The commercial activities detail of Limited Liability Partnership
  • The enrolled business address details
  • The Partnership Agreement
  • The information and names of each individual who will become a partner in the Limited Liability Partnership in Malaysia
  • The information and name of the Limited Liability Partnership compliance officer in Malaysia.
  • The letter of endorsement of the professional organization, if there is any

Steps For Registration of LLP in Malaysia

The registration of LLP in Malaysia typically follows a process that spans 4-7 business days, depending on the MyLLP Portal and SSM office systems. The steps are mentioned as follows

Step 1- LLP Name

For the registration of an LLP in Malaysia, you have to make a reservation for the name of your Limited Liability Partnership in Malaysia. Before you proceed with the registration, the Registrar Registrar must approve your chosen Limited Liability Partnership name.

Some terms like account, law, or consultancy can suggest that limited liability partnerships are intended for professional practices that could extend the approval process. In cases like this, your application should be attended to with an approval letter from the applicable governing body.

  • To accelerate this stage, select the name which:
  • Is different from any other existing local Limited Liability Partnership names
  • Is not infringing any Trademarks
  • It should not have any offensive or inappropriate content
  • Should not be reserved
  • The reserved name from the date of registrar approval will be valid for 30 days.

Step 2- Registration Fee

For the registration of LLP in Malaysia, after your LLP name has the approval from the Registrar then you have to remit the registration fees of RM500 to the RegistrarRegistrar.

Step 3- Certificate of registration

The certificate of registration application and registration of business profile certificate are applied upon the successful registration of the LLP in Malaysia; after that, you will get an email notification from the RegistrarRegistrar, which will confirm the incorporation of the Limited Liability Partnership along with the LLP Registration Number. You have to apply for the certificate of registration from the Registrar. The fee payable to the SSM amounts to RM20 per copy.

The Registrar Registrar will then generate the business profile for your Limited Liability Partnership. The RegistrarRegistrar provides you with the business profile, which will have important details like:

  • Limited Liability Partnership name and registration number
  • Any previous company names
  • Date of registration
  • Business Nature
  • Registered address
  • Business Address
  • Partner information
  • Details of compliance officers

After the certificate of registration and the business profile in hand, you will proceed with all required legal and contractual tasks needed in Malaysia.

Requirement for Limited Liability Partnership in Malaysia

There are some requirements for the registration of the Limited Liability Partnership in Malaysia, which are as follows:

Name of LLP

The appropriate authority should approve the suggested name of your Limited liability Partnership.

Partners

For the registration of Limited Liability online in Malaysia, a minimum of 2 partners are needed. Also, there should not be any upper restrictions on the number of partners in the Limited Liability Partnership.

LLP Compliance Officer

A minimum of one compliance officer should be appointed by the Limited liability partnership, and the officers should be 18 years of age or older, a Malaysian citizen, or a permanent Malaysian resident.

Registered business address

The registered address in Malaysia by law is needed for the Limited Liability Partnerships so that all the notifications can be sent there.

Partnership agreement

For online registration of an LLP in Malaysia, you should have the LLP agreement. To regulate the Limited Liability Partnership, the agreement is used to define the partner's privileges and responsibilities.

Taxation of Limited Liability Partnership in Malaysia

There is a particular tax behaviour for the Limited Liability Partnership based on public ruling no. 3/2014, which was published by the Inland Revenue Board of Malaysia (LDHN). The income generated by the Limited Liability Partnership in Malaysia will be taxed at this level. Whenever any provision of the Income Tax Act 1967 (ITA), release order, and income tax rules are applicable, it should apply to the Limited Liability Partnership in Malaysia.

Businesses that will make income with a total capital contribution of MYR 2.5 million or lower in Malaysia will be taxed at 20% for all first MYR 500,000 of the chargeable income.

Therefore, the rate should not apply to the Limited Liability Partnership in Malaysia if there are more than

  • Capital contribution of 50% of the Limited Liability Partnership is contributed directly or indirectly by the company
  • The paid-up capital of 50% in respect of the ordinary shares of the company is owned by the Limited Liability Partnership directly or indirectly.
  • The capital contribution of 50% Limited Liability Partnership and with respect to ordinary shares also 50% of the company, which is owned directly or indirectly by the corporate shareholders.

Benefits of registration of LLP in Malaysia

There are many benefits of the registration of a Limited liability Partnership in Malaysia, which are as follows

The legal organization

Limited Liability Partnership in Malaysia is the district legal entity and the responsibility of each partner is covered by their capital contribution. The assets of the partners which are personal will be protected and won’t be held directly accountable for the debts that the firm has afflicted over the years.

Continuous succession

The Limited Liability Partnership in Malaysia has the perpetual succession same as the Private Limited Corporation. This will indicate that a Limited Liability Partnership will not stop to exist until your company is disabled formally.

Transfer ownership

The partners who will participate should be free to add or remove partners as they will see suitable. If there is any variation that includes high-profit distribution or compensation plans of the partners then it could be decided during the regular meetings of the partners or spelled out in the new partnership contract.

Licenses required for Business in LLP

After you have submitted your LLP registration to the Companies Commission of Malaysia (SSM), You also have to attain accurate business permits, as different types of businesses require different types of licensesbased on the location of their business and the nature of the business activities. In the LLP, the types of business for which a license is required are as follows:

Business Premises

If your Limited Liability Partnership will function from the physical location, you will need business premises Licenses from the local authorities. This will also vary depending on the nature of the business and regulations locally.

Trade business

There are certain types of business in a trade where you will require a trade license from the local council or the relevant authorities. This license will make sure that your business activity will comply with particular regulations and standards.

Professional services

You will need to have a professional license or a certification from the particular bodies or authorities If you provide services like legal firms, accounting firms, architectural firms, engineering firms, or consulting companies.

Employment Permits

If your Limited Liability partnership plans to hire employees then you will have to comply with Malaysia’s Labour laws and get the necessary permits, which are work permits for foreign employees and other employment licenses.

Food Businesses

In Limited Liability Partnership in Malaysia for the food business, the mandatory licenses are the Signboard and Premise License which is needed by each restaurant in Malaysia. The validity of this license will be for one year, and it will be issued by the local authorities.

Business with signboard requirement

If your business plans to display the signboard for your Limited Liability Partnership, then you will need to have the signboard License from the local council. Your license will regulate the size, design, and location of the signboard.

Register your Limited Liability Company in Malaysia with Enterslice

We at Enterslice offer you comprehensive services for the establishment and management of the Limited Liability Partnership in Malaysia. Enterslice expertise extends across various facets of LLP formation, compliance, and ongoing operations, as well as providing license services. From the initial consultation to the finalization of the legal documentation, we will make sure that there is a compliant Limited Liability Partnership registration tailored to your specific needs.

With Enterslice you can confidently establish and manage the LLPs in Malaysia We are committed to delivering high–quality services enabling you to focus on the core business activities while Enterslice will handle the complexities of LLP compliance and administration.

Frequently Asked Questions

If you do LLP in Malaysia, it will provide the business community with an alternative business vehicle to complement the traditional choices. Also, the business vehicle is more affordable

The Limited Liability Partnership offers you a limited liability to the partners. Also, any liability and obligations of the Limited Liability Partnership will be based on the assets of the Limited Liability Partnership. In this case, a conventional partnership will have unlimited liability jointly and severally in the Partnership.

  • Small businesses
  • Professional groups like lawyers, Accountants, or company secretaries
  • Joint Ventures
  • Venture Capital

Yes, the two companies can form a limited liability Partnership as it’s the most common joint venture.

Limited liability partnership is perfect for the following corporate organizations for conducting their operations

  • Small and medium-sized businesses
  • Professional people
  • Joint endeavours
  • Venture capitals

The fusion of the private corporation and the traditional partnership, an LLP is the corporate structure for doing commercial operations.

Yes, foreigners can set up a Limited Liability Partnership in Malaysia as it is a separate legal entity from its partners.

For the Limited liability Partnership in Malaysia, it will cost RM2,500

Once the Limited Liability Partnership is successfully set up then, you can proceed with the application for the bank account.

There is no mandatory auditing requirement for the Limited Liability partnership unless it is provided in the agreement.

Yes, all Limited Liability Partnerships in Malaysia should file the tax returns (Form PT) within seven months from the date of closing its basis period.

Minors who are below the age of 18, persons of unsound mind, Individuals who are disqualified by law, and insolvent people can’t be partners in the Limited liability partnership in Malaysia.

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