Register Limited Liability Partnership ( LLP ) Online

Normally, professionals such as lower, companies secretary and chartered accountant are eligible to register or incorporate Limited Liability Partnership (LLP) in Malaysia.

No, foreigners cannot register a Limited Liability Partnership (LLP) in Malaysia, rather they are eligible to start a business by incorporating a Private Limited company.

An investor has to go through both pros and cons or advantages and disadvantages before starting a LLP in Malaysia. Both advantages and disadvantage of a LLP is described in this section:

a)   Advantages: 

1. Limited Liability Partnership (LLP) is a separate entity for which liability of a partner is limited to the share amount he holds. It protects the personal assets of members. 
2. This business concept is based on the mutual agreement which enables partners managing the business in a flexible and smooth manner. 
3. As a legal person, LLP can replace an individual to lease or buy a property and can be accountable if anything goes wrong. 
4. Corporate bodies can be the owners or members of the partnership.
5. Members at the different levels are eligible to be part of LLP business entities. 

b)   Disadvantages 

1. LLP requires financial accounts to be disclosed publicly even it is partially a partnership entity
2. The income from LLP is considered as personal income which requires higher tax relative to a private company
3. Realised profit has to be distributed among the partners rather than holding for the future unlike a company. 
4. The minimum number of shareholders has to be two. If it goes below two, LLP has to be dissolved. 

LLP has its own feature which differentiate it from sole trader, company or convention partners. The feature of LLP is discussed as follows:

1. LLP has a legal entity separated from the partners enabling it to borrow, lend, sue and buy & sell assets.
2. Though LLP has separate legal entities, both LLP and partners are taxed as partners. Members have to pay the tax from the income they receive from LLP.
3. The liability of LLP is limited to the share amount in the business, it does not affect the personal assets.
4. Management of LLP is flexible. It can be managed based on the agreement between partners.
5. Designated members of the LLP have specific responsibilities which are normally done by company directors or company secretaries.
6. LLP has a disclosure requirement. Few of its documents have to be disclosed to the public such as its name and documents such as websites, invoices, publications and business letters and orders.
7. LLP also is required to submit some documents to SSM such as annual return, financial accounts, notifications for changing members or registers address
8. LLP has choices to issue debentures which require fixed or flexible charges for its assets like company.  

LLP is a legal form of business organization in Malaysia which offers limited liability to its partners. An LLP is formed when two or more individuals agree to carry on a business together with a view to making profit. In an LLP, each partner is known as a "member". On the other hand, a sole proprietorship or partnership does not offer limited liability to its partners and therefore, the owners are fully liable for any losses and debts incurred by the business. 

Private Limited Company (Ltd) and Limited Liability partnership (LLP) are very similar to corporate vehicles. However, there are some of the salient differences between these two that you should take into consideration when setting up your business

Organizational Flexibility: Flexibility in the organizational structure is something that both an LLP and an Ltd enjoy. However, since a limited company is governed by the Companies Act 2016, LLP members are argued to possess greater organizational flexibility that allows them to have their own discretion in sharing profits, removing capital, decision-making and appointment of members. Therefore, it is fair to conclude that even though both corporate vehicles are free to decide on their organizational structure, an LLP enjoys a more significant share.

Confidentiality: LLP members also enjoy a greater extent of confidentiality since an LLP Members' Agreement is not publicly available at Companies House, unlike a limited company's Articles of Association. This agreement usually includes pertinent issues including profit and loss sharing, shares in capital, responsibilities in management, admission, expulsion and retirement of members and conflict resolution. 

 Tax Treatment: Regarding tax, an LLP's business is similar to a partnership, living up to the fact that it is a hybrid of a limited company and a partnership, which is tax transparent. The LLP members are taxable based on their profits and gains from the LLP. Since it is a separate entity for a limited company, it should pay corporation tax based on the company's gains, leaving the directors taxed on their paychecks and shareholders needing to pay income tax on dividends.

 Investment and Sale: Investors are more interested in limited companies because they can be detached from the administration and management responsibilities, whereas for LLP, investors are required to become a member. Selling and buying shares or stocks of an LLP are restricted and different from the limited company shares. Therefore, it is easier to manage and deal with shares of a limited company than LLP in terms of investment and sale.

 Share Capital: An LLP generally has no share capital, unlike a limited company which has capital maintenance requirements.

Incorporation and Setup: Both LLPs and limited companies are incorporated in the Malaysia Companies Commission (SSM). A company with a board of directors and shareholders is a business, whereas an LLP has only members. The Articles of Association and any relevant Shareholders' Agreement govern a firm, while an LLP is governed by the Members' Agreement. For additional information, see our articles on

Separate Legal Personality: Both a limited liability partnership and a business are legal entities that have the capacity to enter contracts, own property, and sue and be sued for their own funds. The process by which a director binds a limited company is comparable to how LLP members agree to enter into an agreement.

 Limited Liability: Limited Liability Partnerships are much like limited companies, but with one key difference: their members are only personally responsible for the debts and liabilities in exceptional circumstances such as fraud situations. The members of a limited company are solely liable for the unpaid amount of shares they own. In contrast, members of a limited liability partnership are only liable to the extent of capital contributed to the LLP.

 Filing Requirements: The Companies Commission (SSM) in Malaysia demands that both LLPs and limited companies submit annual accounts and a confirmation statement. Both corporate vehicles are also required to maintain a register of those with significant influence at Malaysia's Companies Commission. Owners should keep in mind that the Malaysian Companies Commission must be informed of any changes to the LLP or Company.

Fixed or Floating Charges: For security, the Companies (Northern Ireland) Order 1986 allows for fixed or floating charges over both LLPs and limited companies' assets.

According to the Malaysia Company Act 2016, it takes a minimum of 14 days to register an LLP. The exact process for registering an LLP will depend on the particulars of your business and will be overseen by the Companies Commission of Malaysia (CCM). Generally, you will need to submit the following documents to CCM in order to register an LLP:

• A completed Form 9 - Application for Registration of a Limited Liability Partnership.
• The name of your LLP and its registered address.
• Details of the partners in your LLP, including their full name, nationality and date of birth.
• The nature of your business activities.

According to the Malaysia Company Act, a LLP is formed with at least two directors and two shareholders. However, for the company to be registered, at least one of the shareholders must be a Malaysian citizen or permanent resident of Malaysia.

The minimum time required to process an LLP registration is three (3) working days. However, the processing time may be longer depending on the completeness of the application and supporting documents submitted.

Please note that the Companies Commission of Malaysia (CCM) will not commence processing of an application until all required documents have been received. Under the new Malaysia Company Act 2016 which came into effect on 1 March 2017, a Limited Liability Partnership is now known as a “Partnership”. 

All LLPs are required to file their annual accounts and an annual confirmation statement with the Companies Commission of Malaysia (CCM). LLPs are also required to maintain a register of those with significant influence over the LLP. Any changes to the LLP or to the partners in the LLP must be notified to the CCM.

The minimum paid-up capital for an LLP is RM2,000. However, this amount can be increased as per the partners' discretion and will be stated in the LLP Agreement.

No, there are no restrictions on foreign ownership when incorporating a LLP in Malaysia. All partners in a LLP can be foreigners. However, at least one of the partners must be a resident of Malaysia in order for the LLP to be registered.

Authorised capital: The registered capital is also known as authorised share capital or the nominal capital. It refers to the legal capital of a firm in Malaysia. The Private Limited Company's registered capital is the maximum amount for which shares may be issued by the company. Every business must declare its authorized stock when it is incorporated in Malaysia with the Malaysian Companies Commission (SSM).

The amount is mentioned in the Company's Memorandum of Association under the term "Capital Clause." This issue has already been resolved before the company was incorporated. By following prescribed procedures, the authorized capital of a firm may be increased at any time in the future. A company is no longer required to disclose its authorized capital according to the New Companies Act 2016.

 Paid-up Capital: This is the amount of capital injected into the company from the shareholders. Paid-up capital cannot be more than authorised share capital but can be less  or equal to authorised share capital. This is because the company is not allowed to issue shares more than the said authorised share capital. The minimum amount of paid-up equity is RM1. A company must notify its paid-up capital and any changes to it through the return of allotments under the Companies Act 2016 amendments.

The paid-up increment is the amount by which a company's capital exceeds its authorised capital. If the agreed business's authorized capital is RM100,000, then the paid-up increment will be only up to RM100,000. However, if the firm plans to increase its authorized capital beyond RM250,000, it must do so as per the Companies Act 2016.

The requirement of paid-up-capital for hiring foreign employees depends on nationality of ownership which are described as follows:

Local Ownership Company: Local Ownership private limited Company is fully controlled and invested by Malaysians. A local ownership Private Limited Company must have the minimum paid-up-capital RM 250,000 to be eligible to hire employees. 

 Joint Venture with Malaysian Partner: In a joint venture private limited company, a minimum of 50% control over the venture is maintained by foreign directors while the other half is managed and owned by Malaysian investors and trading partners. A joint venture ownership Private Limited Company must have the minimum paid-up-capital RM 350,000 to be eligible to hire employees. 

 Foreign-Owned Company: These companies are entirely owned and controlled by non-Malaysian nationals. A foreign ownership Private Limited Company must have the minimum paid-up-capital RM 500,000 to be eligible to hire employees. 

The late submission fee is RM50 per day for both the Annual Return and Audited Financial Statement, up to a maximum of RM5,000.

If an LLP fails to submit its Annual Return and Audited Financial Statements within the prescribed timeframes, the LLP's registration may be revoked by the Registrar of Companies. The LLP will then be struck off from the Register of Companies and will no longer exist as a legal entity. This may have serious consequences for the LLP's members, who may be held liable for the LLP's debts and liabilities.

You can check the status of your LLP's registration by searching for the LLP's name on the Companies Commission of Malaysia's (SSM) website. If the LLP is in good standing, its registration will be listed as "active". If the LLP is not in good standing, its registration will be listed as "not active".

If an LLP fails to submit its Annual Return and Audited Financial Statements within the prescribed timeframes, the LLP's registration may be revoked by the Registrar of Companies. The LLP will then be struck off from the Register of Companies and will no longer exist as a legal entity. This may have serious consequences for the LLP's members, who may be held liable for the LLP's debts and liabilities.

If you are unable to pay your LLP's debts, you may be held liable for the debt . This means that you may be required to pay the debt from your personal assets, such as your home or savings. If you are unable to pay the debt, you may be declared bankrupt and your assets may be seized to repay the debt.

If your LLP is struck off the Register of Companies, it will no longer exist as a legal entity. This means that the LLP will be dissolved and its assets will be distributed to its members. The LLP's members may be held liable for the LLP's debts and liabilities.

A LLP is taxed as a partnership and is not subject to tax at the corporate level. The partners in the LLP are taxed on their share of profits from the LLP at their individual tax rates.

You can deregister your LLP by submitting a notice of intention to deregister to the Registrar of Companies. The notice must be signed by all of the LLP's members and must be accompanied by the LLP's Financial Statements for the latest financial year.