Business
Malaysia — Business: Limited Company (Sdn Bhd vs LLP)
Sdn Bhd (private limited company) liability is strictly limited to share capital, with mandatory annual audits, a company secretary, and formal board meetings. LLP (Limited Liability Partnership) partners have limited liability for business debts, but with an important exception: an LLP partner remains personally liable in tort without limit for their own professional negligence or wrongful acts (though other partners are not liable for that individual's negligence). LLPs are cheaper and less bureaucratic — no mandatory annual audit, no company secretary requirement, no separate board meetings — incorporating at ~RM500 versus RM2,500-3,000 for a Sdn Bhd. From YA 2026, LLP profit distributions exceeding RM100,000/year attract an additional 2% tax.
Key facts
- Sdn Bhd: liability strictly limited to share capital; mandatory audit, company secretary, board meetings.
- LLP: limited liability for business debts, but partners remain personally liable in tort for their own professional negligence.
- LLP is cheaper/simpler: ~RM500 incorporation, no mandatory audit/secretary/board meetings vs RM2,500-3,000 for Sdn Bhd.
- From YA 2026: LLP distributions exceeding RM100,000/year face an additional 2% tax.
Costs
- LLP incorporation cost: ~RM500
- Sdn Bhd incorporation cost: RM2,500-3,000
Common mistakes
- Assuming LLP liability protection covers professional negligence claims — partners remain personally liable in tort for their own wrongful acts, unlike Sdn Bhd's share-capital-limited liability.