Malaysian Company Types
Understanding Sdn Bhd vs Berhad Designations
Berhad (abbreviated as BHD) is a Malaysian business designation that indicates a public limited company. Here’s what it means:
- It’s equivalent to “Public Limited Company” (PLC) in the UK or “Inc.” in the US
- Companies with “Berhad” in their name are publicly traded on the Malaysian stock exchange (Bursa Malaysia)
- Berhad companies have limited liability protection, meaning shareholders’ liability is limited to their investment
- They must comply with stricter regulatory requirements including financial disclosures, annual reports, and auditing
- These companies can offer shares to the general public
- Examples include Maybank Berhad, Petronas Berhad, and AirAsia Berhad
The term comes from the Malay language, where “berhad” means “limited.”
There’s also a related designation called “Sendirian Berhad” (abbreviated as Sdn. Bhd.), which refers to private limited companies in Malaysia that cannot offer shares to the general public.
Ownership Structure
Maximum of 50 shareholders only
Financial Disclosure
Financial statements only accessible to shareholders and authorities
Share Trading
Shares cannot be freely traded; requires existing shareholders’ approval
Capital Requirements
Can be established with lower capital requirements
Regulatory Compliance
Subject to basic Companies Act requirements
Corporate Governance
More flexible governance structure
Fundraising Abilities
Cannot invite public to subscribe for shares or debentures
Ownership Structure
Unlimited number of potential shareholders
Financial Disclosure
Must make financial information publicly available with quarterly earnings calls
Share Trading
Shares can be publicly traded, especially on Bursa Malaysia
Capital Requirements
Generally requires higher capital to establish
Regulatory Compliance
Stricter regulations including Securities Commission oversight
Corporate Governance
Rigorous governance with independent directors and board committees
Fundraising Abilities
Can raise capital through share issuances, IPOs, and bond offerings
- Maybank Berhad
- Petronas Berhad
- AirAsia Berhad
- Genting Berhad
- Public Bank Berhad
- Tenaga Nasional Berhad
- Sdn Bhd: “Sendirian Berhad” or “Sdn Bhd”
- Berhad: Just “Berhad” or “Bhd”
- Both indicate limited liability
- Names must be unique and approved
This corporate structure reflects Malaysia’s business framework, which is derived from British company law but adapted to the local business environment. Understanding these distinctions is crucial for entrepreneurs, investors, and business professionals operating in Malaysia, as each structure offers different advantages and comes with specific obligations and opportunities.
