10 FAQs On Setting Up A Limited Liability Partnership In Malaysia

An average of 300 new Limited Liability Partnerships are registered each month and while it’s nowhere near the volume of Sdn Bhd incorporation, the MISHU team still receives quite a few enquiries about various aspects of LLP registration.

For your convenience, we’ve compiled answers to the ten most frequently asked questions on LLP registration in Malaysia.

Use the table of contents below to jump to questions on your mind. 

For more answers, check out the Limited Liability Partnerships Act 2012 or get in touch!

Let’s begin!

1. Should I choose an LLP or Sdn Bhd?

Considering 4,000 new Sdn Bhds are incorporated every month compared to just 300 LLPs, the former is the more versatile business entity. Without knowing your specific situation, we’d recommend a Sdn Bhd.

However, an LLP might be preferable in these situations:

• your business sector is restricted from forming a Sdn Bhd
• you want the benefit of limited liability without the compliance demands of a Sdn Bhd
• you have no plans to raise capital by offering equity in your business

This is why LLPs are the go-to entity for investment holding companies or law firms, to name a few examples. Check out our Sdn Bhd vs LLP guide for more details.

There’s obviously more to it, but that’s the main idea – we explain this at length in our Enterprise vs Sdn Bhd guide.

2. How much does LLP registration cost?

If you choose to register yourself, the registration fee with SSM is RM500.

If you engage professional services like MISHU, there will be an additional service charge. MISHU, for example, charges RM1,888 inclusive of the SSM fee.

3. Can I register an LLP myself online?

You can, and have two options:

• Register yourself via SSM’s MyLLP portal (you’ll need to register for an account).
• Engage a third party like MISHU to register on your behalf

If you’d like to register yourself, check out our 4-step guide to LLP registration.

We predict at some point you’ll decide it isn’t worth the hassle and engage us anyway!

4. What are LLP registration requirements?

You can register an LLP if you can meet the following conditions:

1. Minimum two persons (individual or body corporate) as partners
2. Minimum one Compliance Officer 
3. LLP agreement to outline relationship between partners
4. Have a valid Malaysian registered address
5. Have a valid business address 

Additionally, LLPs formed as part of a professional practice must meet three more criteria:

1. Consist of partners that belong to the profession
2. Obtain an approval letter from a governing body 
3. Have a valid professional indemnity insurance 

Seems pretty doable, right?

4.1. What information will SSM request?

As this is closely related to registration requirements, we’ll add it as a sub-question.

During registration, you will be asked to supply the following details:

• proposed name of LLP
• The LLP’s nature of business
• registered address
• partner particulars
• Compliance Officer particulars, and
• the approval letter (for professional practices)

5. What’s a Compliance Officer?

It is a mandatory appointment under Section 27(1) of the Limited Liability Partnerships Act 2012, who will be responsible for:

• advising you and your partners on matters of statutory compliance
• keeping and maintaining registers and records of the LLP, and
• notifying SSM of changes in particulars of the LLP

A Compliance Officer can be appointed from one of the LLP’s partners or a person qualified to act as a Company Secretary under the Companies Act 1965.

Unless you’re familiar with statutory compliance, we recommend going with the second option.

6. Any guidelines for an LLP name?

Yes – several, actually!

For starters, your proposed LLP name obviously cannot already be in use by another party, which you can verify via SSM’s MyLLP  portal during your registration.

Assuming the name isn’t already taken, here’s a few things a company name cannot do:

• contain unacceptable words
• be similar to a name already under reservation
• contain words directed not to be accepted by government bodies
• contain names of people not named as partners without justification

And that’s just getting started!

LLP naming conventions can get pretty detailed, and we highly recommend reading SSM’s LLP naming guidelines for a full picture.

4. Can foreigners register an LLP in Malaysia?

Yes, LLPs can be registered and fully owned by a foreigner, though the Compliance Officer must be someone who resides in Malaysia in addition to meeting the other requirements.

7. What is the tax treatment of an LLP?

LLPs are generally taxed similarly to Sdn Bhds at a standard rate of 24%. 

However, there are two differences compared to tax treatment of Sdn Bhds:

• LLPs with capital contributions of RM2.5 million or less benefit from a lower tax rate of 19% on the initial RM500,000 of their taxable income. 
• Profits distributed to partners within the LLP are not taxed as shareholder dividends are.

For details, check out LHDN’s full guide to LLP taxation.

8. How long for SSM to approve an application?

Assuming there are no issues, it typically takes SSM about five to seven working days.

However, during periods of high demand, it can take even longer, so be patient 🙂

Here’s a breakdown of the steps involved and their estimated time:

Steps Involved in LLP Registration	Time Taken
1. Name Reservation	Immediate
2. Preparing Documents	1-2 days
3. Obtaining Partner Signatures	1 day
4. SSM Submission	Immediate
5. Waiting for SSM Approval	Depends on SSM officer workload

9. What are compliance requirements of LLPs?

Brace yourself – and remember it doesn’t mean everything has to be done at once!

Obligations under Limited Liability Partnership Act 2012

• Publication of Name & Registration No
• Registers and documents to be kept at Registered Office
• Proper Accounting Records
• Annual Declaration (AD)
• Changes of Particulars of LLP

Duties of Compliance Officer / Partners

• Lodging or submitting of documents
• Registering changes in particulars
• Keeping registers and documents
• Publishing LLP’s name and registration number
• Compliance with Registrar’s requirements
• Keeping complete accounting records
• Completing and submitting income tax return form
• Providing estimates of tax payable
• Notifying changes of accounting period
• Partner compliance officer responsibility
• Personal liability of compliance officer

Employer obligations

• Registering with EPF Board
• Registering with SOCSO
• Registering Employer Tax File with IRB
• Registering with HRDF
• Registering with EIS

Obligations under the Income Tax Act

• Notification for LLP Tax Registration Number
• Preparation of complete accounting records
• Estimating Tax Payable
• Submission of revised estimate of tax payable
• Submission of income tax return

Obligations under the Goods and Services Tax (GST) Act

• Registering for GST

10. What happens after incorporating an LLP?

Though it depends on your specific business activity, here are the typical next steps:

• Open a business bank account
• Register with statutory bodies for tax and payroll deduction
• Hire employees, and
• Establish internal business processes

Once you do all that, keep at it for several decades, and then just maybe you’ll make your millions .

And if you’d let us, MISHU would love to journey with you every step of the way.

Let MISHU help register your LLP

MISHU’s team of licensed Company Secretaries and business consultants can serve as Compliance Officers if need be, and help you start, build, and grow your business, if you’d kindly let us!