private limited company

Single Person Company

Under New Companies ACT 2016
• A company can now be incorporated with only ONE director, also known as Single Person Company (“SPC”) / Single Director Sdn. Bhd.
• The shareholder can also be ONE person, that is, the same director carrying on business in that company.
• The previous Companies Act 1965 requires a minimum of two shareholders and two directors in carrying on business using Sdn Bhd. The new Companies Act 2016 is easy to operate and flexible

Director's Requirements
• An individual
• At least 18 years of old
• Principal place of residence in Malaysia
• Sole director CANNOT resign until a replacement is found via new appointment. Pursuant to Section 196(3) of the CA 2016, there is no age limit for the director to retire in a SPC

Separate Legal Entity
• A company is a legal entity separate from its directors and members. This is known as ‘separate legal entity’ concept
• A company carrying on a business can enter into contracts and it can therefore, sue and be sued
• Shareholder/s is/are not personally liable for the debts of the company. The creditors dealing with the company cannot seek recourse from the shareholders with regards to any commercial liabilities due to ‘separate legal entity’ concept
• Shareholder can be one or more than one person, who may or may not be the same director representing and operating the SPC

Comparison Between SPC and Minimum 2 Directors' Sdn. Bhd.
• The Companies Act 2016 permits ONE director to operate a Sdn Bhd
• The shareholder can be ONE or MORE than one individual
• The ONE shareholder may not be the SAME director

Perpetual Existence
A Sdn Bhd’s existence continues even though the shareholder/s may die or dispose his/her shares to other shareholder/s