What is an LLP in Malaysia and how is it different from a Sdn Bhd?
A limited liability partnership (LLP) is a body corporate registered under the LLP Act 2012. It needs at least two partners (a shortfall is allowed for six months) and a compliance officer who is a Malaysian citizen or permanent resident living in Malaysia. It runs on a partnership agreement, not a board. A Sdn Bhd has directors, shares and heavier governance under the Companies Act 2016.
An LLP combines a partnership's flexibility with limited liability. It is registered with SSM under the Limited Liability Partnerships Act 2012, not the Companies Act 2016, and is a body corporate with its own legal personality (s.3).
Main features (LLP Act 2012)
- At least two partners, who can be individuals or companies (s.6). An LLP may carry on business with fewer than two partners for up to six months, or longer if the Registrar allows (s.7).
- A written LLP agreement setting out how the partners deal with each other.
- At least one compliance officer, chosen from the partners or from persons qualified to act as secretaries. The compliance officer must be a Malaysian citizen or permanent resident and ordinarily reside in Malaysia (s.27). If none is appointed, all partners are treated as compliance officers.
- No shares: ownership is by partnership interest, so it is awkward for raising investor capital.
SSM fees (LLP Regulations 2012): RM500 to register, RM30 to reserve a name and RM200 for the annual declaration.
Compared with a Sdn Bhd
- A Sdn Bhd has directors, shareholders and a licensed company secretary; an LLP has partners and a compliance officer.
- A Sdn Bhd can issue different classes of shares; an LLP cannot.
- Some professions may be restricted from one structure or the other, so check with the relevant professional body.
- Both must keep filing with SSM each year.
- The LLP (Amendment) Act 2024, phased in from 31 January 2025, added corporate rescue provisions and beneficial ownership reporting for LLPs. It did not change the two-partner or compliance officer rules.
LLPs suit small, partner-run firms. If you expect investors, employees with shares or a later sale of the business, a Sdn Bhd is usually easier.
Legal basis
- Limited Liability Partnerships Act 2012, ss.3, 6, 7 and 27
- Limited Liability Partnerships Regulations 2012, Schedule
- Companies Act 2016, s.9
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- What business structure should I choose in Malaysia: sole proprietorship, partnership, LLP or Sdn Bhd?Pick based on liability, who owns it and how credible you need to look. A sole proprietorship or partnership is cheapest but the owners are personally liable; an LLP or a Sdn Bhd gives a separate legal entity. A Sdn Bhd is the usual choice once you hire staff, sign larger contracts or bring in investors.
- What is the difference between a sole proprietorship and a Sdn Bhd in Malaysia?A sole proprietorship is not a separate legal person, so you are personally liable for all business debts. A Sdn Bhd is its own legal person and shareholders are generally liable only for unpaid share capital. A Sdn Bhd costs more to set up and carries more yearly filing duties.
- Can one person be the only director and shareholder of a Sdn Bhd?Yes. A company needs at least one member and one director, and one person can be both. A private company must have at least one director who ordinarily lives in Malaysia. You still need a licensed company secretary, and you cannot act as both director and secretary where the law needs both.
- What is the minimum paid-up capital for a Sdn Bhd in Malaysia?The Companies Act 2016 sets no minimum amount; a company needs at least one share. Shares no longer have a par value. Many Sdn Bhds start with RM1 to RM1,000, but regulators, banks and immigration can expect more depending on your activity or foreign ownership.
- Is a company constitution compulsory for a Sdn Bhd in Malaysia?No. Under the Companies Act 2016 a company may choose to adopt a constitution by special resolution. Without one, the Act's default rules apply. If you do adopt one, you must lodge it with SSM within 30 days. A company limited by guarantee must have a constitution.