SSM Registration in Malaysia: A Guide for New Businesses

In Malaysia, every business venture must undergo registration with the Companies Commission of Malaysia, known as Suruhanjaya Syarikat Malaysia (SSM). Registration of business not only confirms the legality of the entity but also ensures compliance with the country's regulations. It's a crucial requirement for conducting contracts with banks, government agencies, and non-governmental organizations, as well as for tax compliance and other regulatory matters.

In this blog, we'll cover the different types of entities recognized by SSM, the specific requirements for each type of business, the online portals used for registration, and provide an easy-to-follow walkthrough for SSM registration in Malaysia.

What is Suruhanjaya Syarikat Malaysia (SSM)?

In Malaysia, Suruhanjaya Syarikat Malaysia (SSM), or the Companies Commission of Malaysia, is a significant statutory body resulting from the merger of the Registrar of Companies (ROC) and the Registrar of Businesses (ROB). Established on April 16, 2002, SSM plays a pivotal role in regulating companies and businesses across the nation.

SSM serves as the primary agency responsible for incorporating companies and registering businesses. Its core functions include providing crucial company and business information to the public while ensuring compliance with business registration and corporate legislation. By conducting comprehensive enforcement and monitoring activities, SSM contributes to positive developments in Malaysia's corporate and business sectors.

What is SSM Registration in Malaysia?

SSM Registration in Malaysia refers to the process of registering a business or company with the Suruhanjaya Syarikat Malaysia (SSM), the statutory body responsible for the regulation of companies and businesses in Malaysia. This registration is mandatory for all businesses operating in Malaysia, ensuring legal recognition and compliance with Malaysian business laws.

SSM Registration Eligibility

The eligibility criteria for SSM registration are as follows

1. The owner or partner of the business must be a Malaysian citizen  or permanent resident.
2. The owner or partner must be at least 18 years old.
3. The business must operate in Peninsular Malaysia and the Federal Territory of Labuan.
4. The business must comply with relevant legislation, including the Companies Commission of Malaysia Act 2001, Companies Act 2016, Interest Schemes Act 2016, Registration of Businesses Act 1956, Limited Liability Partnerships Act 2012, Trust Companies Act 1949, or Kootu Funds (Prohibition) Act 1971.
5. The type/activity of the registered business must be appropriate to the business name, legal, and compliant with federal security, public order, or moral principles.
6. There are specific fees for different types of business registrations, including sole proprietorships, partnerships, branches, and business information.
7. Businesses must be registered not later than 30 days from the date of commencement.

Types of Legal Entities under SSM Registration

In Malaysia, there are several types of business entities that can be registered under the SSM:

Business Registration (Unlimited Liability)

There are two major registrations with unlimited liability on the owners of the entity

• Sole Proprietorships: This is the simplest form of business entity owned and operated by a single individual. It is suitable for small-scale businesses and requires minimal registration requirements.
• Partnerships: A partnership involves two or more individuals who agree to share the profits of a business. Partnerships are governed by the Registration of Businesses Act 1956.

You can register online using the Ezbiz Online platform.

Company

• Private Limited Companies (Sendirian Berhad or Sdn. Bhd.): These are the most common type of corporate business entities in Malaysia. They are limited by shares and offer limited liability to their shareholders.
• Public Limited Companies (Berhad or Bhd.): Suitable for large-scale businesses, these companies can raise capital by offering shares to the public. They are subject to more stringent regulatory requirements.
• Foreign Company Registration: Foreign entities looking to establish a presence in Malaysia can register as a foreign company under the Companies Act 2016.

MyCoID facilitates online applications for company registration with SSM.

Limited Liability Partnerships (LLPs)

Combining the features of partnerships and companies, LLPs offer limited liability to their partners and are governed by the Limited Liability Partnerships Act 2012. 

MyLLP offers the option for online applications as well.

Co-operative Establishment

An autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and independently-controlled enterprise.

Utilize the SKM Online Application System to submit applications digitally for co-operative establishments.

How to Register a Business or Company under SSM in Malaysia?

The registration process for various entities may vary depending on the specifics, but the major steps typically remain consistent. Specifically, the process for registering a business with SSM generally involves the following steps

1. Choosing a business name: You must propose a business name and get approval from the Registrar of Business. The name must comply with legal guidelines and should not be misleading or inappropriate.
2. Completing registration Form A (Borang A): This form includes details like business name, commencement date, addresses, information about owners and partners, and the type of business.
3. Attaching necessary documents: This includes a photocopy of the owner’s and partner's identity cards, relevant permits, licenses, or supporting letters for the business type.
4. Submission and payment of fees: Applications can be submitted online through EzBiz Online services or manually at SSM’s main office. The SSM business registration fees vary depending on the type of registration.
5. Compliance with the legal framework: The SSM operates under various acts and regulations, including the Companies Commission of Malaysia Act 2001, the Companies Act 2016, and the Registration of Businesses Act 1956.

Benefits of Business Registration with SSM

SSM registration in Malaysia offers several significant benefits to businesses and companies

• Legal identity and recognition: One of the primary benefits of SSM registration is that it grants legal identity to your business. This recognition is crucial for entering into legal contracts, opening a business bank account, and engaging in other business activities.
• Access to financing and grants: Only registered businesses have access to financial assistance from banks and financial institutions. Most grants and incentives are specifically targeted at businesses registered with SSM.
• Access to Services: Only legally registered businesses are eligible to access certain services and benefits, such as applying for Malaysia Payment Gateways like eGHL or ipay88. Protection of business name: Registration ensures that your business name is protected and cannot be legally used by another entity in Malaysia. 
• Compliance and Credibility: Being registered with SSM ensures that your business is compliant with Malaysian business laws and regulations. This compliance enhances the credibility of your business among customers, suppliers, and other stakeholders.
• Facilitation of audits and inspections: Registered businesses have a clearer structure and defined processes, which simplifies the audit and inspection procedures.
• Ease of doing business: With the introduction of services like EzBiz Online, the process of registering and managing business-related activities has become more efficient and user-friendly.
• Access to business information: SSM registration allows businesses to access a wealth of information and resources that can be instrumental in strategic planning and decision-making.

Consequences of not Registering Business in Malaysia

Conducting a business without registration is considered an offence under the Registration of Businesses Act 1956 (ROBA 1956). Upon conviction, the individual or entity may face penalties, including fines not exceeding RM 50,000 or imprisonment for up to two years, or both.

Conclusion

Registering a business with SSM is crucial for legal compliance, scalability, and ease of doing business in Malaysia. Choosing the appropriate form of entity, whether it's a proprietorship, partnership, company, or LLP, is crucial for structuring your business effectively.