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Articles of Organization
I need Articles of Organization for a new limited liability company (LLC) in Malaysia, detailing the company's name, registered office address, purpose, and management structure, including the appointment of a local director and the allocation of member shares.
What is an Articles of Organization?
Articles of Organization establish the legal foundation of a Limited Liability Company (LLC) in Malaysia under the Companies Act 2016. This key document outlines your company's basic structure, including its name, registered address, business activities, and details about its members and directors.
When you file Articles of Organization with the Companies Commission of Malaysia (SSM), your LLC officially becomes a separate legal entity. This gives you crucial liability protection and helps define how your company will operate. The document must align with Malaysian corporate law and includes specific requirements like your company's constitution and shareholding structure.
When should you use an Articles of Organization?
You need Articles of Organization when starting a new Limited Liability Company (LLC) in Malaysia. This crucial document must be filed with the Companies Commission of Malaysia (SSM) before your business can legally operate, accept investments, open bank accounts, or enter into contracts as an LLC.
Many entrepreneurs file Articles of Organization when transitioning from sole proprietorship to LLC status, seeking investment capital, or expanding operations internationally. The timing often aligns with business growth milestones, such as adding new partners, launching significant projects, or establishing a more formal corporate structure to protect personal assets.
What are the different types of Articles of Organization?
- Articles Of Non Profit Organization: Specially designed for charitable organizations, religious bodies, and social enterprises in Malaysia, with specific provisions for non-profit governance and tax-exempt status requirements.
- Articles Of Association And Bylaws: A comprehensive version that combines both foundational structure and detailed operational rules, commonly used by larger companies or those needing more complex governance frameworks.
Who should typically use an Articles of Organization?
- Business Founders: File Articles of Organization to establish their LLC and protect personal assets. They define initial ownership structure and management roles.
- Company Directors: Ensure compliance with stated objectives and governance rules outlined in the document. They're legally responsible for maintaining its requirements.
- Corporate Secretaries: Prepare and file the Articles with SSM, maintain records, and handle amendments when company structure changes.
- Legal Advisors: Draft and review Articles to ensure compliance with Malaysian law and protect client interests.
- Shareholders: Bound by the Articles' provisions regarding voting rights, profit distribution, and transfer of shares.
How do you write an Articles of Organization?
- Company Details: Gather your proposed company name, registered address, business activities, and share capital structure.
- Director Information: Compile details of all directors including MyKad/passport numbers, residential addresses, and contact information.
- Shareholder Structure: Document each shareholder's name, identification, shareholding percentage, and class of shares.
- Company Secretary: Appoint a licensed company secretary to help prepare and file documents with SSM.
- Constitution Details: Define your company's governance rules, voting procedures, and transfer of shares policies.
What should be included in an Articles of Organization?
- Company Name: Full legal name approved by SSM, with "Sendirian Berhad" or "Sdn Bhd" suffix.
- Business Objectives: Clear statement of permitted business activities and scope of operations.
- Share Capital: Details of authorized share capital, types of shares, and rights attached to each class.
- Management Structure: Rules for appointing directors, their powers, and decision-making procedures.
- Shareholder Rights: Voting procedures, dividend policies, and share transfer restrictions.
- Meeting Procedures: Rules for conducting annual general meetings and extraordinary general meetings.
What's the difference between an Articles of Organization and an Articles of Incorporation?
Articles of Organization often get confused with Articles of Incorporation in Malaysia's legal landscape. While both establish a business entity, they serve different purposes and apply to different company structures.
- Legal Entity Type: Articles of Organization create Limited Liability Companies (LLCs), while Articles of Incorporation form corporations (Berhad companies).
- Management Structure: LLCs offer more flexible management options and fewer formal requirements, whereas corporations must maintain strict board structures and formal meeting protocols.
- Regulatory Requirements: Articles of Organization typically require less detailed information and have simpler filing requirements with SSM compared to Articles of Incorporation.
- Tax Treatment: LLCs can choose their tax treatment method, while corporations face mandatory corporate tax structures and more complex reporting requirements.
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