Malaysia Limited Liability Partnership (LLP) functions as Perkongsian Liabiliti Terhad (PLT), combining partnership flexibility with company restricted liability features. Strategically, the hybrid business model creates benefits for entrepreneurs and professionals who want efficient business management together with asset protection.
The Limited Liability Partnership operations in Malaysia fall under the jurisdiction of the Limited Liability Partnerships Act 2012, which receives oversight from Suruhanjaya Syarikat Malaysia - SSM through its regulatory functions. The legal framework governing LLPs creates an organized business environment that simultaneously protects both the organization and its partner participants.
Every LLP operating in Malaysia needs to select and maintain one Compliance Officer. The following requirements define the position description for the Compliance Officer role:
The Compliance Officer fulfills essential duties by making sure the LLP meets both its statutory requirements of annual disclosure submissions and maintains sufficient recordkeeping.
The law recognizes an LLP as its entity, which maintains separation from the partners who formed it. This means the LLP can
People who operate as partners in an LLP gain defensive liability status, which protects their assets from business liabilities. The investors in an LLP protect their assets since their financial liability extends only to their initial capital amount.
The existence of an LLP continues even when its partnership members experience changes in their composition. An LLP maintains its continuous operations after any changes in its partnership status because of new joining partners and retired or deceased partners.
LLP partners have the advantage of directly managing their business operations since there is no requirement for a board of directors as in corporations. Inside, LLPs operate under an agreement that defines partner roles together with their responsibilities and profit distribution methods.
Pass-through taxation provides LLPs with an advantage because profits are taxed at the individual partner level instead of being profits to corporate-level double taxation. The framework of this structure produces meaningful tax advantages for its partners.
To form an LLP, the following procedures are usually taken:
A Limited Liability Partnership (LLP), known in Malaysia as Perkongsian Liabiliti Terhad (PLT), is a business structure that combines the flexibility of a traditional partnership with the limited liability features of a company. It is governed by the Limited Liability Partnerships Act 2012 (Act 743).
LLPs in Malaysia are regulated by the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia - SSM), which oversees the registration, administration, and compliance of LLPs.
LLPs enjoy pass-through taxation, where profits are taxed at the individual partner level, avoiding double taxation. Additionally, LLPs with a capital contribution of RM2.5 million or less benefit from a preferential tax rate of 20% on the first RM500,000 of chargeable income, with the remaining income taxed at a flat rate of 24%.
No, LLPs are exempt from mandatory financial statement audits, reducing compliance costs and administrative burdens.
Yes, existing partnerships or private companies can convert to an LLP, subject to the provisions of the Limited Liability Partnerships Act 2012. Upon conversion, all assets, liabilities, and obligations are transferred to the LLP, and the previous entity is deemed dissolved.
The Compliance Officer is responsible for ensuring that the LLP complies with the provisions of the Limited Liability Partnerships Act 2012. This includes maintaining proper records, submitting annual declarations, and notifying the Registrar of any changes in the LLP's particulars.
Yes, LLPs must include the words "Perkongsian Liabiliti Terhad" or the abbreviation "PLT" at the end of their business name to denote their status as an LLP
Malaysia
