Private and Public Limited Companies

A private limited company is a company where the liability is limited to the value of the shares issued. Unlike a sole trader, the liability is unlimited. This means that any debts are debts of the company, and not of the owners.


Like a private limited company, a public limited company has shares, but the key difference is that these shares can be bought by anyone freely on a stock exchange. Public limited companies have shares on the stock market and can be bought and sold by any member of the public. This way the company can raise further capital and expand their resources. Both these types of limited companies have limited liability, which means the owners of the business are only liable for the amount they invested in the business (unless the debt is so large that the business has to be sold to repay the debt).

Supermarket chains, pharmaceutical, gas, oil and telecommunication companies etc. that foresee the needs to expand in the future, would be suitable for this type of ownership.

Unlike sole proprietorships or partnerships, companies have continuity of succession, as it is unaffected by the death or incapacity of one or more of its members.

A company must have minimum of two members, but a private limited company is limited to 50 members (public limited companies have no member limit). A minimum paid-up capital of only RM2 is needed to start a private limited company, while public limited companies need a paid-up capital of not less than RM60 mil (if it seeks to be listed on the Kuala Lumpur Stock Exchange (KLSE) Main Board) or not less than RM40 mil (if it seeks to be listed on the KLSE Second Board).

A company must have a registered office in Malaysia of which all books and accounts that are required under the Companies Act 1965 should be kept. The register of members, register of directors, managers and secretaries and register of charge (if applicable) and register of interest holders (if applicable) have to be kept and changes thereto have to be filed with the Registrar of Companies.