Guidelines On Setting Up A Berhad Limited by Guarantee

GUIDELINES ON COMPANY LIMITED BY GUARANTEE
These Guidelines are issued pursuant to section 20C of the

Companies Commission of Malaysia Act 2001.
A. INTRODUCTION
1. A company limited by guarantee (CLBG) is a public company

incorporated with the principal liability of its members limited by the
constitution to such amount as the members undertake to
contribute to the assets of the company if the company is wound
up.
2. Activities of a CLBG must be in line with the objects as

specified in paragraph 5. A CLBG may only hold any land or property
if it is issued with a license by the Ministry of Domestic Trade,
Cooperatives and Consumerism (Minister).
3. There are two types of CLBG under the Companies Act 2016
(CA 2016):
(a) CLBG without the word "Berhad" or "Bhd"; and
(b) CLBG with the word "Berhad" or "Bhd".
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B. INCORPORATION UNDER SECTION 45 CA 2016
4. A CLBG may be incorporated by lodging an application to the

Registrar together with a constitution.
5. A CLBG can only be formed for the following objects:

(a) providing recreation or amusement;
(b) promoting commerce and industry;
(c) promoting art;
(d) promoting science;
(e) promoting religion;
(f) promoting charity;
(g) promoting pension or superannuation schemes; or
(h) promoting any other objects useful for the community or
country, such as:
(i) environment;
(ii) health;
(iii) education;
(iv) research;
(v) social; or
(vi) sports.
6. For avoidance of doubt, no other company can be formed for

purposes specified under paragraph 5.
7. If any Ministry, Government Agency or authorities intends to

incorporate a CLBG, an approval letter from the Ministry,
Government Agency or authorities is required to be submitted
together with the application to incorporate the CLBG.
2
Requirement of founder or director
8. A founder or director of a CLBG must be a person who is fit

and proper and is not disqualified under the CA 2016.
9. For the purposes of determining whether a person is fit and

proper, the Registrar may:
(a) consider the experience, qualification and competency
of the founder or director which would assist him in
carrying out his duties as director of the CLBG;
(b) consider the reputation, character and integrity of the
founder or director;
(c) conduct a security vetting on the potential founder or
director,
and a safety filter (security vetting) for the potential founder or
director shall be conducted by the Royal Malaysian Police and/or
other agencies.
Appointment of director
10. The Registrar may, if he is satisfied that the applicant is fit and
proper and competent to perform the duties of a director under this
Act, approve the applicant as a director of a CLBG.
Requirement as to constitution
11. Unlike any other company, a company limited by guarantee is

required to have a constitution with the following requirements:
(a) the name of the company;
(b) the objects of the company;
3
(c) the amount up to which the member undertakes to
contribute to the assets of the company in the event of
its being wound up;
(d) the full names, addresses and occupations of the
subscribers; and
(e) a statement that the subscribers are desirous of being
formed into a company in pursuance of the constitution.
12. A CLBG shall submit its constitution to the Registrar upon an

application for incorporation. The CLBG may adopt the model
constitution prepared by the Registrar.
Amendment of constitution
13. Prior approval from the Registrar must be obtained to amend

the constitution of a CLBG.
Segmental Reporting
14. The Registrar may require a CLBG to submit a segmental

reporting together with its financial statements.
General prohibitions
15. A CLBG must ensure that none of its members or directors

uses the company or its financial resources to conduct any form of
political or unlawful activities.
Other general requirements
16. Unless prior approval has been obtained from the Registrar, a
CLBG:
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(i) is prohibited to appoint new directors;
(ii) is prohibited from paying any fees, salaries, fixed
allowances or any benefits to its directors;
(iii) must use the profits and other income for the purposes
stated in the objects of the company;
(iv) is prohibited to solicit any contribution or donation or make
any money collection from the public; and
(v) is required to comply at all times with all the provisions set
forth in the constitution, other than the conditions
mentioned above.
C. LICENCE TO OMIT THE WORD “BERHAD” OR “BHD”
17. A CLBG may apply to the Minister for a licence to omit the
word “Berhad” or the abbreviation “Bhd” from its name. However,
any CLBG intending to use the words “Yayasan” or “Foundation”
must omit the word “Berhad” or “Bhd” from its name.
18. Subject to paragraph 21, the Minister may impose terms and
conditions as he thinks fit in approving the application.
19. If a CLBG fails to comply with any of such terms and

conditions, the license may be revoked.
D. OMITTING THE WORD ”BERHAD” OR ”BHD” AT THE END

OF THE EXISTING CLBG UNDER SECTION 45(3) CA 2016
20. A CLBG which had been incorporated for a period of three (3)
years may also apply to omit the word “Berhad” or “Bhd”.
5
21. The basis to support the approval of omitting the word
”Berhad” or ”Bhd” is that the CLBG must have a fund amounting to
RM1 million cash. The CLBG is required to get all of the cash has
been pledged by potential contributors within six (6) month after it
is established.
22. A CLBG with the word “Berhad” or “Bhd” could omit the said
word subject to the approval of the Minister and the terms and
conditions of licence as provided in paragraph 21.
23. The CLBG must provide an information with comments on the

financial position at least for the last three (3) years and the latest
financial statements for the period of three (3) years, audited and
presented at the annual general meeting.
24. A licence under section 45(3) or (4) CA 2016 is issued once

the application obtains the approval of the Minister.
E. LICENCE TO HOLD, DISPOSE OR CHARGE LAND OR

PROPERTY UNDER SECTION 45(4) CA 2016
Application to hold, dispose or charge land or property
25. A CLBG shall not hold, acquire, charge, mortgage, sell, lease
or dispose, a land or property unless a licence has been obtained
from the Minister.
26. A CLBG shall hold, acquire, charge, mortgage, sell, lease or

dispose, the land or property subject to the approval of the Minister
and the terms and conditions of licence as provided in paragraph
27.
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Terms and Conditions of licence to hold, dispose or charge
land or property
27. The Minister may impose special terms and conditions relating
to the holding, acquiring, charging, mortgaging, selling, leasing or
disposing the land or property as he thinks fit.
F. SUBMISSION OF APPLICATIONS TO SSM
28. For ease of reference, a checklist of items to be submitted

when making any applications pursuant to this Guidelines is
attached in Checklist 1 to 7. An application may be rejected for
failure to meet the requirements in Checklist 1 to 7.
29. Where necessary, the Registrar and the Inland Revenue Board
may be in liaison when processing any application.
G. CLBG INCORPORATED PRIOR TO THE COMMENCEMENT

OF THE COMPANIES ACT 2016
Object clause which falls outside the scope of Guidelines
30. For the avoidance doubt, in the event that any CLBG
incorporated pursuant to corresponding previous written law have
objects that fall outside the list provided for in paragraph 5, such
CLBG shall be deemed to have been properly incorporated under the
Companies Act 2016.
31. Any licences issued by the Minister pursuant to corresponding

provisions under the Companies Act 1965 are still valid until
7
otherwise revoked. Similarly, CLBG which are issued with the
licences are bound by the terms and conditions attached with those
licences.
REGISTRAR OF COMPANIES
COMPANIES COMMISSION OF MALAYSIA
31 January 2017
Checklists 1 to 7
Examples 1 to 4
Sample of CLBG Constitution
8
CHECKLIST 1
SECTION 45(3) COMPANIES ACT 2016 (CA 2016)
LODGEMENT OF APPLICATION FOR THE MINISTER’S APPROVAL
- LICENCE TO OMIT THE WORD “BERHAD” OR THE

ABBREVIATION “BHD” FROM A CLBG’s NAME
(i) For new incorporation of a CLBG; or
(ii) From an existing CLBG
A. APPLICATION FEES
1. A payment of RM700 as the required fee for:
 Using a gazetted word

 Omission of the word Berhad/Bhd
 Perusal of the Constitution
OR
A payment of RM400 as the required fee for:
 Omission of the word Berhad/Bhd

2. Payment can be made to Suruhanjaya Syarikat Malaysia (SSM) by

cash/ money order/ bank draft/ banker’s cheque.
B. DOCUMENTS TO BE ENCLOSED
3. Application letter
Contents of the application letter:
 Justification and purpose for:
 Using the word ‘Yayasan/Foundation/Institute’.
CHECKLIST 1 PAGE 1
 Omission of the word Berhad/Bhd.
 Reasons for incorporating the CLBG under CA 2016 and not
under the Societies Act 1966.
 State two categories of the CLBG based on the objects under
section 45(1) CA 2016.
4. Explanation and justification by the promoter for the use of the

proposed name. Any supporting letter from any government agency
for the use of the proposed name (if applicable).
5. Detailed activities to be carried out.
6. Statutory Declaration by the promoter and proposed director

confirming whether such an application has been made under the
Societies Act 1966. If yes, to provide the supporting documents.
7. A copy of Application and Reservation for Availability of Name / Form

13A (Companies Act 1965).
8. A draft copy of Constitution.
9. A copy of I.C/ passport of the promoter and proposed director.
10. Biodata, qualification and experience in charitable activities for each

proposed director and promoter. Please refer to the format in
Example 3.
11. A letter of consent to act as a promoter from each promoter.
12. A letter of consent to act as a director from each director.
13. Information on the contributor/donor confirming the financial

contribution of RM1 million to be made within 6 months from the
date of incorporation. A contributor can be either an individual or a
company. Please follow the respective procedure below.
(a) Individual who acts as a contributor/donor
The supporting documents are:

 A Statutory Declaration by the individual contributor and the
amount that the contributor has agreed to contribute; and
CHECKLIST 1 PAGE 2
 The latest bank statement OR fixed deposit receipt.
(b) Company which acts as a contributor/donor
The supporting documents are:

 A resolution by the company the contents of which should
among others include the amount that the company has agreed
to contribute;
 Latest bank statement of the company; and
 Latest Audited Financial Statement of the company.
14. For new CLBG incorporation, an estimated/forecasted income and

expenditure for a period of 2 years from the establishment of the
CLBG. Estimated income and expenditure statement should show the
contribution from the donor. Please refer to the format in Example
4.
15. For existing CLBG which intends to omit the word Berhad/Bhd, the
CLBG must provide its Audited Financial Statements for the last 3
years which have been laid at its annual general meeting.
C. LODGEMENT
16. The documents are required to be lodged with the payable fees at the
address below:
SURUHANJAYA SYARIKAT MALAYSIA

LEVEL 17, MENARA SSM@SENTRAL
NO. 7, JALAN STESEN SENTRAL 5
KUALA LUMPUR SENTRAL
50623 KUALA LUMPUR
CHECKLIST 1 PAGE 3
CHECKLIST 2
SECTION 45 (1) COMPANIES ACT 2016 (CA 2016)
LODGEMENT OF APPLICATION FOR THE REGISTRAR’S APPROVAL
- FORMATION OF A COMPANY LIMITED BY GUARANTEE (CLBG)

WITH THE WORD BERHAD
A. APPLICATION FEE
 Approval by Registrar


 Reasons for incorporating the CLBG under the CA 2016 and
not under the Societies Act 1966.
 State 2 categories of the CLBG based on the objects under
section 45(1) CA 2016.
4. Explanation and justification by the promoter for the use of the

proposed name. Any supporting letter from the relevant government
agency for the use of the proposed name (if applicable).
CHECKLIST 2 PAGE 1
5. Detailed activities to be carried out.
6. Statutory Declaration by the promoter and proposed director

confirming whether such an application has been made under the
Societies Act 1966. If yes, to provide the supporting documents.
7. A copy of Form 13A (Companies Act 1965) / a notification letter by

SSM under reservation of name.
8. A draft copy of Constitution.
9. A copy of I.C/ passport of the promoter and proposed director.
10. The biodata, qualification and experience in charitable activities for

each proposed director and promoter. Please refer to the format in
Example 3.
11. A letter of consent to act as a promoter from each promoter.
12. A letter of consent to act as a director from each director.
13. An estimated/forecast income and expenditure for a period of two

years within the establishment of the CLBG. Please refer to the format
in Example 4.
C. LODGEMENT
address below:

50623 KUALA LUMPUR
CHECKLIST 2 PAGE 2
CHECKLIST 3
SECTION 45 COMPANIES ACT 2016 (CA 2016)
LODGEMENT OF APPLICATION FOR THE MINISTER’S /

REGISTRAR’S APPROVAL
- APPOINTMENT OF DIRECTOR / TRUSTEE OF A COMPANY

LIMITED BY GUARANTEE (CLBG)
A. APPLICATION FEE
1. Payment of the required fee of either:

(a) RM300 - Approval by Minister – only applicable to CLBGs with
license conditions issued by the Minister pursuant to section 24(3)
of the Companies Act 1965 (CA 1965); or
(b) RM100 - Approval by Registrar – applicable to all other CLBGs
which do not fall under category 1(a) above.

 Reasons for the appointment of the new director.
 Main activities of the CLBG.
CHECKLIST 3 PAGE 1
4. A copy of the Notice of Registration / Certificate of Incorporation
(Form 8) under CA 1965
5. A copy of Constitution.
6. A copy of the licence under section 45(1) CA 2016 / a copy of licence

pursuant to section 24(1) CA 1965 (Form 15) and the licence
conditions issued under section 24(3) of CA 1965.
7. A copy of I.C/ passport of the proposed director.
8. The biodata, qualification and experience in charity activities for each

of the proposed director. Please refer to the format in Example 3.
9. A copy of the Director’s Resolution pertaining to the approval for the

appointment of the new director to be signed by a Director and a
Company Secretary.
10. A statutory declaration from a person before appointment as a

director pursuant to section 201 CA 2016 / Form 48A (CA 1965).
11. A copy of approval letter from the Director General of the Inland
Revenue Board of Malaysia for tax exemption under subsection 44(6)
of the Income Tax Act 1967.
C. LODGEMENT
address below:

50623 KUALA LUMPUR
CHECKLIST 3 PAGE 2
CHECKLIST 4

- AMENDMENT OF CONSTITUTION FOR COMPANY LIMITED BY

GUARANTEE (CLBG)
A. APPLICATION FEE

license conditions issued by the Minister pursuant to section
24(3) of the Companies Act 1965 (CA 1965); or

 The purpose and reasons for amendment of the Constitution.
 The main activities of the CLBG.
 To notify whether any amendment has been made before.
4. A copy of the Certificate of Incorporation (Form 8) / Notice of

Registration.
5. A copy of the Constitution.
CHECKLIST 4 PAGE 1
6. A copy of the licence under section 45(1) CA 2016 / a copy of the
licence pursuant to section 24(1) CA 1965 (Form 15) and the licence
conditions issued under section 24(3) of CA 1965 (if applicable).
7. A copy of the Resolution/Minutes signed by each member pertaining

to the approval for the amendment of the Constitution to be
acknowledged by a Director and a Company Secretary.
8. A copy of Appendix A. Please refer to the format in Example 1.
9. A copy of Appendix B. Each amendment is required to be clarified

by taking into account the following:
 Purpose / Reason
 Justification
 The impact before and after the amendment
 Contradiction with CA 2016.
Please refer to the format in Example 2.
10. One compact disc (CD) containing Appendices A & B in Microsoft

Words format.
11. A copy of letter from the Inland Revenue Board of Malaysia pertaining
to an application by the CLBG on amendment of M&A/constitution
under Tax Exemption under subsection 44(6) Income Tax Act 1967.
12. A copy of approval letter from the Director General of the Inland
Revenue Malaysia for Tax Exemption under subsection 44(6) Income
Tax Act 1967.
C. LODGEMENT
address below:

50623 KUALA LUMPUR
CHECKLIST 4 PAGE 2
CHECKLIST 5
SECTION 45 (4) COMPANIES ACT 2016 (CA 2016)
LODGEMENT OF APPLICATION FOR THE MINISTER’S APPROVAL
- TO HOLD, ACQUIRE, CHARGE, MORTGAGE, SELL, LEASE OR

DISPOSE LAND OR PROPERTY BY A COMPANY LIMITED BY
GUARANTEE (CLBG)
A. APPLICATION FEE

 approval by the Minister; and
 each land / property.

 Reasons or purpose to hold, acquire, charge, mortgage, sell,
lease or dispose the land / property.
 If the transaction is for the holding of land / property, to explain
the source of funds, the manner of land / property settlement
and payment arrangement.
 Price/value of the land / property.

(Form 8) under the Companies Act 1965 (CA 1965).
CHECKLIST 5 PAGE 1
7. List of lands / properties that the CLBG currently owns pursuant to

section 45(4) CA 2016 / 19(2) CA 1965. An explanation on the current
status of each land / property, the current usage and the development
that has been made over the land / property.
8. Description of the land / property in both Malay and English

languages. This description must be similar with the information
contained in the agreement / deed of gift / master title / strata title
/ other supporting documents.
9. A copy of the agreement / deed of gift / master title / strata title /

other supporting documents relevant to the land / property
transaction.
10. Audited Financial Statements for the last two years.
11. Financial impact to the CLBG if it holds, acquires, charges,

mortgages, sells, leases or disposes the land / property.
12. A copy of the Director’s Resolution pertaining to the approval to hold,

acquire, charge, mortgage, sell, lease or dispose the land / property.
13. A statement on Arm’s Length Transaction by all directors/trustees

confirming that they do not have any interest in the land / property
transaction.
C. LODGEMENT
14. The documents together with the payable fees are required to be
lodged to the address below:

50623 KUALA LUMPUR
CHECKLIST 5 PAGE 2
CHECKLIST 6

- SOLICITATION OF DONATION FROM THE PUBLIC BY A

COMPANY LIMITED BY GUARANTEE (CLBG)
A. APPLICATION FEE



 The purpose and reasons for solicitation of donation from the
public.

(Form 8) under the CA 1965.
CHECKLIST 6 PAGE 1
7. A copy of the proposal for the solicitation of donation:

Contents of proposal:
 Objectives and procedures of the donation solicitation.
 Activities planned for the solicitation of donation.
 Targeted audience for the solicitation of donation.
 Targeted maximum and minimum collections.
8. A copy of the donation process which among others should contain

the donation procedure, process flow-chart, funds management and
handling, funds recording manner and cash flow, funds processing
and the persons in charge of managing the whole donation process.
9. Statutory Declaration by the director/trustee confirming adherence to

the relevant requirements as per Example 5.
10. A copy of the Directors’ Resolution pertaining to the approval for

solicitation of donation to be signed by a Director and a Company
Secretary.
11. The latest Audited Financial Statements of the CLBG.
12. A copy of approval from the Director General of the Inland Revenue
Board of Malaysia for Tax Exemption under subsection 44(6) of the
Income Tax Act 1967.
C. LODGEMENT
13. The documents together with the required fees are to be lodged at
the address below:

50623 KUALA LUMPUR
CHECKLIST 6 PAGE 2
CHECKLIST 7

- PAYMENT OF SALARIES, FEES, FIXED ALLOWANCES & OTHER

BENEFITS TO THE DIRECTOR OF A COMPANY LIMITED BY
GUARANTEE (CLBG)
A. APPLICATION FEE

(b) RM100 - Approval by Registrar – applicable to all other
CLBGs which do not fall under category 1(a) above.

 The purpose and reasons for the relevant payment to the
director.
4. A copy of the Certificate of Incorporation (Form 8) / Notice of

Registration.
CHECKLIST 7 PAGE 1
6. A copy of the licence under section 45(1) CA 2016 / a copy of

licence pursuant to section 24(1) CA 1965 (Form 15) and the
licence conditions issued under section 24(3) of CA 1965 (if
applicable).
7. List of the directors/independent directors.
8. List of the full time staff, position and the job scope of the staff.
9. Current benefits of each director.
10. The job scope, duties and expertise of each director.
11. An agreement between the director and the CLBG for the payment of
such salaries, fees, fixed allowances and other benefits to the director
which contains:.
 Amount of the salary, fee, fixed allowances and other benefits;
 A confirmation by the CLBG the proposed amount of the
salaries, fees, fixed allowances and other benefits are
reasonable.
12. An acceptance letter from each director agreeing to receive the

salaries, fees, fixed allowances and other benefits in the CLBG.
13. Members’ Resolution from each member pertaining to the approval

for such payment of salaries, fees, fixed allowances and other
benefits to the director and confirming that such payment to the
director is for the purpose of achieving the object of the CLBG.
14. Audited Financial Statements for the last three (3) years.
15. 3 years of yearly estimated/forecasted income and expenditure after

such salaries, fees, fixed allowances and other benefits have been
paid.
16. A copy of an approval letter from the Director General of the Inland
Revenue Board of Malaysia for tax exemption under subsection 44(6)
of the Income Tax Act 1967.
CHECKLIST 7 PAGE 2
C. LODGEMENT
17. The documents are required to be lodged together with the payable
fees at the address below:

50623 KUALA LUMPUR
CHECKLIST 7 PAGE 3

Guidelines On Setting Up A Berhad Limited by Guarantee

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GUIDELINES ON COMPANY LIMITED BY GUARANTEE

These Guidelines are issued pursuant to section 20C of the

1. A company limited by guarantee (CLBG) is a public company

2. Activities of a CLBG must be in line with the objects as

4. A CLBG may be incorporated by lodging an application to the

5. A CLBG can only be formed for the following objects:

6. For avoidance of doubt, no other company can be formed for

7. If any Ministry, Government Agency or authorities intends to

8. A founder or director of a CLBG must be a person who is fit

9. For the purposes of determining whether a person is fit and

11. Unlike any other company, a company limited by guarantee is

12. A CLBG shall submit its constitution to the Registrar upon an

13. Prior approval from the Registrar must be obtained to amend

14. The Registrar may require a CLBG to submit a segmental

15. A CLBG must ensure that none of its members or directors

Other general requirements

C. LICENCE TO OMIT THE WORD “BERHAD” OR “BHD”

19. If a CLBG fails to comply with any of such terms and

D. OMITTING THE WORD ”BERHAD” OR ”BHD” AT THE END

23. The CLBG must provide an information with comments on the

24. A licence under section 45(3) or (4) CA 2016 is issued once

E. LICENCE TO HOLD, DISPOSE OR CHARGE LAND OR

Application to hold, dispose or charge land or property

26. A CLBG shall hold, acquire, charge, mortgage, sell, lease or

F. SUBMISSION OF APPLICATIONS TO SSM

28. For ease of reference, a checklist of items to be submitted

G. CLBG INCORPORATED PRIOR TO THE COMMENCEMENT

Object clause which falls outside the scope of Guidelines

31. Any licences issued by the Minister pursuant to corresponding

SECTION 45(3) COMPANIES ACT 2016 (CA 2016)

LODGEMENT OF APPLICATION FOR THE MINISTER’S APPROVAL

- LICENCE TO OMIT THE WORD “BERHAD” OR THE

1. A payment of RM700 as the required fee for:

 Using a gazetted word

A payment of RM400 as the required fee for:

 Omission of the word Berhad/Bhd

2. Payment can be made to Suruhanjaya Syarikat Malaysia (SSM) by

4. Explanation and justification by the promoter for the use of the

5. Detailed activities to be carried out.

6. Statutory Declaration by the promoter and proposed director

7. A copy of Application and Reservation for Availability of Name / Form

8. A draft copy of Constitution.

9. A copy of I.C/ passport of the promoter and proposed director.

10. Biodata, qualification and experience in charitable activities for each

11. A letter of consent to act as a promoter from each promoter.

12. A letter of consent to act as a director from each director.

13. Information on the contributor/donor confirming the financial

(a) Individual who acts as a contributor/donor

The supporting documents are:

(b) Company which acts as a contributor/donor

The supporting documents are:

14. For new CLBG incorporation, an estimated/forecasted income and

SURUHANJAYA SYARIKAT MALAYSIA

SECTION 45 (1) COMPANIES ACT 2016 (CA 2016)

LODGEMENT OF APPLICATION FOR THE REGISTRAR’S APPROVAL

- FORMATION OF A COMPANY LIMITED BY GUARANTEE (CLBG)

1. A payment of RM200 as the required fee for:

2. Payment can be made to Suruhanjaya Syarikat Malaysia (SSM) by

Contents of the application letter:

4. Explanation and justification by the promoter for the use of the

6. Statutory Declaration by the promoter and proposed director

7. A copy of Form 13A (Companies Act 1965) / a notification letter by

8. A draft copy of Constitution.