In the last few decades, there has been a paradigm shift towards setting up a business or being an entrepreneur. There are many reasons for this sudden shift, the most common one being an individual’s aspiration to become a hirer and not a hiree. Speaking of one particular country, investors are showing great interest in company registration in Malaysia due to advantages like low income tax exposure, an easier process to get a loan, etc.
But setting up a company in Malaysia can be quite tedious, given the elaborate process for the same. One such process is to register a company name in Malaysia. And as the saying goes, the journey of a thousand miles begins with the first step – while forming a company in Malaysia the first step is to get the trade name of your company reserved and registered.
Now, if you already have a name in mind for your company, the process can be dropped down to just a few steps, but if you are a foreigner and do not have much idea about the whole process of choosing a company name then do not fret on it much. We are here for you!
Principles of Company Nomenclature in Malaysia
In Malaysia, the Companies Act 1965 provides that before a company or its change of name is registered, the Minister of Domestic Trade and Consumer Affairs or the Registrar of Companies must first approve the name or the new name of the company, respectively and accordingly. Without the consent of the Ministry, a company cannot register its name that, in the opinion of the registrar, is undesirable or is a name, or a kind of name, that the Minister has directed the Registrar not to accept for registration.
- The name should have the official language and should be correctly spelled
- In case if the name contains words which are not in Malay or English then the meaning of such words must be given
- The name should not contain a blasphemy or contain offensive words to any member of the public
- The name should not resemble any elements of a religion
- One has to clearly state the meaning of the name to the officials
- The name should not be an acronym to any global giants, like PNB, ICI, IBM, etc.
- The usage of individual names shall be from the names of the directors and to be named in the Memorandum or Articles of Association. However, individual names can be considered if such names are from the names of immediate family members of the director or the promoter; for example, the names of children, father, wife, grandfather or grandmother. Proof of family relationship must be given. If the name of the company is from the individual name of a group of companies in existence, a consent letter must be obtained from the group of companies which have such individual names.
Words Prohibited by Virtue of the Direction of the Minister
- The name should not suggest any connection with the royal family or patronage including words like Royal, King, Queen, Prince, Princess, Crown, Regent, or Imperial.
- The name should not suggest any connection with a State or Federal government department, a statutory body, government agency, or municipality, including words like State, Federal, and National.
- The name should not suggest any connection with any political party, society, trade union, or building.
- The name should not suggest any connection with any ASEAN, Commonwealth or foreign government, or with the United Nations including words like ASEAN, UNESCO, NATO, EEC, OPC, etc.
- The names that are misleading as to the identity, nature, objects, or purpose of a company.
- The names including words like Bank, Banker, Banking, Bumiputra, Bureau, Chamber of Commerce and Industry, Chamber of Manufacturers, Chartered, College, Consumer, Council, Credit, Exchange, Executor, Fair Price, Finance, Foundation, Fund, Guarantee, Institute, Insurance, Investment, Leasing, Made in Malaysia, Prime, Registry, Treasury, Trust, Unit Trust, University, etc.
If an applicant or the owner of a company has justification to use the names or words contained in the aforesaid points for company registration in Malaysia, the applicant or the owner has to apply to the Minister through the Registrar of Companies, stating the reasons or justifications for using such names or words as part of the proposed name by the company, together with a payment of RM 150.
There is more to this than the aforementioned list and it is highly recommended that you consider enlisting company secretarial services, due to complex and continuous processes in which many factors come into play. Just to be on the safer side and abide by the rules and regulations of the Ministry, an individual should look for a professional consultant to make things easier. Business Setup Worldwide is a platform to help businesses set up their company in Malaysia. For any queries or advice, you can contact us – we’d be happy to be of assistance.