I never thought this would be possible given the way the Country is managed by the current ruling government, but I must give credit when credit is due. The Government should be complimented for making serious effort to go electronic, although compared to other neighbouring countries, we are not exactly very “ahead”. Sometimes, we just need to stop complaining and appreciate what we already have ;-)

However, as much as the process can be computerised…it doesn’t mean that the result will be pleasing to the end users.

In my previous attempt (September 2008) to document the procedures in registering your Company online, I realized how futile my effort has been. The entire process was revamped after the site was redesigned. It should have been a good thing, since a revamp means the system developers want to improve things. However, in this case, the revamp made the service almost unusable. There are a few times where I wanted to give up and just go straight to the SSM counter and register the company. I didn’t because I wanted to know where my limits are. Well, I’ve successfully registered a Company for a friend using this newly revamped system, but if you asked me to do it again (even for myself), I would go to the SSM counters anytime.

So, I will only give general guidelines how to go about registering your business online, if you insist on trying it out. You’ve been warned.

1. To get started, you must have Internet Explorer. Yes, an inconsiderate but nevertheless important requirement.

2. Register an account with http://www.malaysia.gov.my.

3. Once you an account, you must register yourself as an SSM Subsriber. To do this, go to the ‘Services‘ menu, and search for ‘SSM Subscriber Registration’.

4. Once you are subscribed and verified, you should then go back to the same ‘Services‘ menu. This menu will be very crucial in the entire business registration process since there’s no direct links anywhere in the site where you can easily click on it. So, in this menu, search for ‘Business Name Approval’. Under Service Type, check the ‘Online Services’ instead of the default ‘All’ to speed up the search. Click on the most relevant result, and you can start your online registration by following the instructions on the screen.

5. If you would like to search for all the things you can do under SSM, just search for ‘SSM’ and the system will show you all the online services available under SSM.

As much as all the SSM services are available online, the usability of the site is almost non-existence. If you have never registered a company before, it would almost be impossible for you to complete your registration using this system simply because there’s no clear indication what are the steps that is required, for instance, you must first get your business name approved before you use the “SSM – Online Registration of Business (ROB)”. There’s no clear indication to business registrants on which form should they start off with. There should be a proper classification of services, for example, one button for ‘New Business Registrants’, ‘Existing Business Registrants’ to guide the users to the right services immediately. I can go on and on writing a review on how broken the usability of the site is and how it can be improved, but that’s not my point here. I just want to highlight the landmines you will encounter in your journey to register your company using this system.

The system also allows you to upload ‘Partnership Agreement’ if you are forming a partnership. However, at the point I registered, it seems you MUST upload a TIFF version of your agreement, even though it states that it supports formats such as Doc, PDF, TXT etc. No prizes for guessing why, but asking users to upload a TIFF format of their documents is a bit too much. Not everyone knows how to export their documents into TIFF.

There are many other issues in regards to the way important links are placed, the flow of the application and how the system pops up a PDF form for every form you need to fill up. I had to use 2 computers to get the registration done because one of the computer can’t seem to display the forms properly.

As a conclusion, until they ‘revamped’ the usability, I strongly suggest you register your business at the counter, unless you know of someone who’d already work through this maze. I still give credit for the amount of SSM-related services you can perform but there’s no point having so many services when the users cannot figure out how to go about utilizing them.

That’s all for the online business registration part.

If you are incorporating a Sendirian Berhad (Private Limited) company, you can perform a name search to check the availability of the company name you have in mind. This service can be done online at www.ssm-einfo.my. You must first register an e-Account.

Incorporating a Business in Malaysia

After you’ve decided that your idea is going to change the world, your next step is to move out from your house garage and start commercializing the idea into a product or service that can be enjoyed by the consumers. In Malaysia, it’s relatively easy for an ambitious entrepreneur to setup a business, although running one is an entirely different thing.

To start out, an entrepreneur can look into the following options:

i) if you’re a lone ranger with a tight budget, your product probably won’t be making much profits in the near future and there’s not much risk of facing a lawsuit, you should consider setting up a Sole Proprietorship.

ii) if you have a few partners joining the fray, where each of you are also starting out on a shoestring budget and there’s not much risk of facing a lawsuit, you should consider setting up a Partnership.

iii) if you are going into a business where you prefer the liability of the business is separated from the founders and shareholders, you should consider setting up a Private Limited Company, also known commonly as Sendirian Berhad (Sdn Bhd).

Sole Proprietorship
A Sole Proprietorship is a business with an unlimited liability, which means the founder can be held personally liable for the debts owed by the business. Creditors can sue and obtain a court order to claim the debts owed by the business, against the founder’s personal assets.

The only few practical reasons to setup a Sole Proprietorship business are it is cheap and easy to setup. Also, running a Sole Proprietorship business requires minimal paperwork and documentation.

Partnership
Partnership is almost identical to a Sole Proprietorship setup. All liabilities, profits and losses are equally distributed amongst its partners.

The maximum number of partners in a Partnership is 20. All Partnerships formed in Malaysia is governed by the Partnership Act 1961.

Sendirian Berhad
Registering a business entity as a Sdn Bhd is somewhat different from registering a Business as a Sole Proprietorship or Partnership. Unlike a Sole Proprietorship and Partnership, a Sdn Bhd is a legal entity by itself, and it is separated from the directors and shareholders.

The incorporation of a Sdn Bhd in Malaysia is governed by the Companies Act 1965.

Here are some benefits of registering your company as a Sdn Bhd:

• Your liability is limited only to the amount of Capital that the shareholders contribute into the Company. However, it is still quite common for Malaysian business owners to enter into agreements using their own name on behalf of the Company.
• A Sdn Bhd’s shareholding is much more liquid, as compared to a Sole Proprietorship’s or Partnership’s. It is much easier to amend existing shareholding or add additional shares into the Company for new investors.
• A Sdn Bhd entity is deemed more established and are more likely to help your business’s credibility.
• A better transparency and accountability in terms of auditing and tracking the Company’s balance sheet.
• The business does not die with the founders, because the incorporation of a Sdn Bhd makes it a legal entity in itself.
• You can appoint non-Malaysian directors into the business venture.

With these benefits, a Sdn Bhd entity also comes with a few disadvantages:

• The company’s financial records and accounts will be accessible to the public.
• The cost of setting up a Sdn Bhd is relatively higher. An average setup would cost around RM2,300, which would include include the payment charged according to the authorized capital, professional fess, filing charges, the printing of the company?? Memorandum of Association and Articles of Association, shares certificates and company’s seal.
• You are required to audit your business on a yearly basis. The audit fee is usually based on the annual turnover of your business.
• A monthly secretarial fee (depending on the amount of administrative workload required) is also required. The minimum fee is about RM60 monthly.

You might also want to look at the Registration of Businesses Act 1956 (Revised 1978) that governs the registration of all businesses in Malaysia.

Summary of the Business Entities

	Sole Proprietorship	Partnership	Private Limited
Liability	Unlimited	Unlimited	Limited
Number of Directors	1	20 to 10	2 to 50
Setup Cost	Minimal, below RM100	Minimal, below RM100	Expensive, average RM2,300
Tax Rate	Personal	Personal	Corporate
Audit	No	No	Yes
Financial Info Public	No	No	Yes
Company Secretary	No	No	No
Life Span	Lifespan of Founder	Lifespan of Partners	No Limit
Enlisting New Partners	No	Yes	Yes
Profit and Loss Sharing	Sole	Equally Amongst All Partners	Based on Shareholding

Register a Private Limited Company (Sendirian Berhad)

Proposed Name for Company	(e.g. Keropok Lekor Sdn Bhd)
Contact Person
Contact Number
Director 1
Full name
NRIC
Mailing Address
Proportion (%) of shareholding
Director 2
Full name
NRIC
Mailing Address
Proportion (%) of shareholding
If more than 2 Directors, fill in the details for other directors.
Nature of business

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