How to set up Limited Liability Partnership
There are few types of business company you can set up:
1. Sole proprietorship
3. SDN BHD
4. Limited Liability Partnership
Our focus here will be No.4 Limited Liability Partnership. I will explain the reason behind why I opt for LLP.
Limited Liability Partnership is quite new in Malaysia and has been around since 2012, so it’s not heard before, but presently gaining momentum. It’s the cheapest, safest in terms of business liability protection and easiest to run for new startup.
Before drilling more into LLP, let us look at the other 3 types of company.
– Sole purpose is business under their own very name. But the company is directly intertwine with owner assets. So if any lawsuits charge to your company successfully, your debt payable will have no boundary, you would need to fork out your own personal assets, cash to pay off the company debts. Hence, anything happen to the company, your personal assets will be liable.
– No shares allocation
– Same as Sole Prop, just that you have another partner to share responsibility. 😉
– You can have multiple shareholders, as this company will have shares allocations and you can transfer share.
– It is much more costly, as you need to pay cost below to keep your company afloat with Malaysia guideline and policy.
- Company Secretary – to organise AGM & submission of annual return to SSM (RM1,100)
- Tax agent – to compute the tax figures & submission of form C to LHDN (Inland Revenue Board) RM1,200
- Auditors – to conduct audit on the management accounts & prepare audited financial statements. RM1,500
- Account person – to prepare full set management accounts for audit purposes RM1,800
Total estimation = RM5,600
The reason I choose LLP is therefore I am a cheap skate who doesn’t wish to pay too much to set up my startup company =P.
Moreover, LLP is a separate legal entity which protect my own personal assets. When my LLP company been sued or bankrupt, creditors cannot come after me. But for sole prop and partnership, creditor can come after you and they will hunt you down definitely.
Having LLP save lots of cost, You don’t need to submit audit to the government yearly.
Below is the breakdown of the cost to set up LLP:
– RM500 to register your company
– RM40 Certificate fees
– RM15 stamping on certificate fees
Total cost RM555
LLP only requires a secretary which the director appointed as one. And the company could set up in just few days, superbly easy!
I had just recently set up my company “Fintech LLP”,
Below will be the guideline for setting up LLP company, so do read on if you are interested.
1. Register at MYLLP
Just fill in your details
This will be the main page when you login
You will receive this email after successful registration. You would need to bring this with you to SSM. Don’t need to print this, just make sure your android or Iphone able to show them this email, will be good enough.
2. Head over to SSM
No 7, Jalan Stesen Sentral 5
Kuala Lumpur Sentral, 50623 Kuala Lumpur
Operating Hours: 8:15 AM – 5 :15 PM
Do remember to bring the necessary documents that listed in your email.
GO to the office take number wait for your call. Then register your company name with them.
3. Go home,rest and wait
Well, you can’t complete everything in one day, you would need to wait few days before the registration of your company has been official.
Next, when you receives notification that your company has been officially registered via email, you can start filling in the LLP info online.
Click on E-Froms –> Register LLP
You can start filling all the details for your new LLP company. First off search your company name and verify whether it is available, then fill in all the required details.
Then chose either one of you or your partner as Compliance Officer. Compliance officer will be the one who handle all the admin work, just like SDN BHD Secretary.
This is LLP, hence you would need partners to successfully set up this company, do add in details of your partner.
Business code will be the industry your company opt to run in, choose the right code for it.
Next, it will lead you to the end and you will have to make payment of RM500 through the net. Now you are RM500 poorer!
4. Complete Your certification document PDF
Do click the BUY NOW button
1. Insert company name in SEARCH
2. Click Add to Basket for CERTIFICATE OF REGISTRATION
3. CLICK LLP Current Profile and it will bring your to below picture
Click and input your company name
Click ADD to Basket
Click checkout proceed with payment for the certification
After payment completed, next click workspace and orders. It will show all the purchases.
Download the PDF document and you are fully equip to head to SSM office next few days.
5. Head back to SSM to certified your document
Now head back to level 17, get your certification all ready stamped by the officer.
Fill in the form below
Take your number and wait for your turn, then inform the officer that you want to get your certification all stamped. It will cost RM15 + GST = RM15.90. CASH ONLY payment.
In within 30 minutes, you can collect your certified document on that day. Now you are proudly the owner of a limited liability partnership company!
- Which bank should I apply for the company bank account?
– Do apply account with local banks, as I have tried inquire with oversea bank (OCBC and Standard chartered). They required you to put minimum RM50,000 in the company account, that’s a lot of money and not possible for a startup at all.
– Apply with local bank such as PBB and CIMB. This is the 2 banks I inquire that allows LLP bank account opening with online facility, with minimum of RM5000 in the company account.
- Do you know that there’s no share allocation for LLP?
When you get your certification copy, it will just state the partners name in the form, but doesn’t state the share allocation for each party. Hence it’s a very vague document for the partners.I would recommend that you get a lawyer and sign partnership agreement with each other to seal the deal. If you need any recommendations do PM me 🙂
- LLP is best for all business and most suitable for startup founder or freelancer like me!
If you have any questions, do leave a comment.