05 Dec How to set up a Limited Liability Partnership (LLP) in Malaysia?
Limited Liability Partnership (LLP) is an alternative business vehicle which combines the characteristics of a private company and conventional partnership. LLP provides limited liability status to its partners and offers the flexibility of internal arrangement through an agreement between the partners.
It is most suitable for professionals such as lawyers, chartered accountants and company secretaries to conduct their professional practices. The advantages of LLP include lower set up costs coupled with limited liability for partners which make it a popular choice among startups and SMEs. Non-profit organizations cannot be registered as LLP. Those companies registered as LLP are not required to submit annually audited accounts’ reports and financial statements. Hence, the maintenance fees for LLP are definitely lower in comparison to Private Limited Company.
LLP can be formed by a minimum of two partners (wholly or partly, individuals or bodies corporate) for any lawful business with a view to profit in accordance with the terms of LLP Partnership Agreement (mandatory by Suruhanjaya Syarikat Malaysia, SSM).
The following information is required for registration of LLP (Registration fees for LLP is RM500, it does not include the certificate fees which costs RM20):
- Proposed name of LLP (RM30 for company name reservation, optional)
- Nature of business
- Address of registered office (This address shall keep at all times documents related to LLP registration including LLP Partnership Agreement, most recent Annual Declaration and accounting information)
- Name and details of partners
- Name and details of compliance officer
If LLP is formed for professional practice, it must:
- consist of natural persons of the same profession
- have in force professional indemnity insurance
- obtain approval letter from the profession’s governing body
Below are the steps to register LLP online via MyLLP portal:
- First, you need to create an account on the MyLLP portal via this link https://myllp.com.my/
- Once registration is complete, they’ll email you a User Registration Notification and request that you bring the following items to the nearest SSM office:
- A copy of your User Registration Notification Email
- Company secretary license or any professional body license (if any)
- SSM staff will verify your registration and provide your Login ID and Password for MyLLP portal
- Login to MyLLP portal and proceed with the registration of LLP online
- You will need to appoint at least one compliance officer who shall be:
- either one of the partners or a person who is qualified to act as a secretary under the Companies Act 1965;
- at least 18 years of age and citizen/permanent resident of Malaysia; and
- ordinarily resides in Malaysia
- A compliance officer shall be responsible for the doing of all acts, matters and things as required to be done under the LLP Act 2012 and the Limited Liability Partnerships Regulations 2012 (‘LLP Regulations 2012’).
- Once you have filled up all the details for the LLP registration in MyLLP portal, you can then make payment online through the same portal.
- SSM will email and notify you on your successful registration of LLP
LLP is required to keep all accounts’ records and other relevant ones so as to be able to have physical data to explain the transactions and financial position of the LLP. This also includes profit and loss accounts, balance sheets preparation from time to time which portrays a true and fair view of the state of affairs of the LLP at the LLP registered office. LLPs are also required to submit Annual Declaration (costs RM200) to SSM annually.