Friday, 28 July 2017

Setting Up Limited Liability Partnership (LLP) in Malaysia

To set up a Limited Liability Partnership (LLP or Perkongsian Liabiliti Terhad in BM), you can follow the steps described by Mr-Stingy.
Here's a complete MyLLP Portal Registration User Guide for more details.

SSM KL Sentral Level 17

*This is for non-member of Professional Body. I have compiled information I gathered from various sources and my own experience. 
MyLLP Portal Registration
  • Register a new account on Register as "Verified User" who can perform more tasks.  A "General User" can only log a complaint and perform name availability search.
  • Once you’ve successfully registered on the system, you will receive a Registration Notification email which has to be printed out.
  • Bring the printed email and original IC to the SSM Office at KL Sentral to get your account verified. Take the lift to Level 17
  • Take your number and wait for your turn. Pass the email you printed and your IC to the person at the counter to verify your registration. 
  • Then you will receive an email that says your account has been activated. Use the same login and password you entered during registration. 
LLP Registration
  • Login to MyLLP. Click on "Check LLP Name Availability" - To check if the name you want has been taken or not.
  • Go to "E-Forms" -> "Register LLP". Click on the Direct Registration checkbox and Continue if you have not reserved LLP Name (which is optional)
    • Enter your LLP name. The system will add PLT after the name (example: Sunshine Service PLT)
    • Enter Your LLP Details (Address can be your physical/ virtual office, home, PO Box)
    • Enter Compliance Officer Details (example: yourself)
    • Add Your Partner(s) Information (example: you and your husband)
    • Enter Your Business Code(s). (Up to 3 only)
    • Make Payment: RM500 by credit card or online bank transfer
  • You will then receive an email - Approved (LLP is successfully registered) or Rejected (with reason and next course of actions)
Purchase LLP Documents
Login to MyLLP. Click "Buy Now!". Enter LLP Name and Search. You can add the documents you want to the shopping basket (Price is before GST). The documents are required for other applications such as bank account, tax file, etc.
  • Direct Register LLP - Registration of LLP: RM5 or RM15 (certified copy)
  • Certification of Registration: RM20
  • Certificate of Good Standing: RM50
  • LLP Current Profile: RM20
  • etc
You will receive an email that says "A product order has been received and processed. Please go to 'My Orders' on your Customer Portal workspace to download the referenced product. The product order will be available within 7 days from the date of product purchase." Now you don't have to collect the documents at SSM, they will be automatically sent to your 'Orders' to be downloaded.

Note: There will be no notification that informs you the products are ready for download. So you have to check 'Workspace'->'Orders'. The products will be removed after 7 days. 

I purchased the LLP Certificate and Profile, checked the Orders after the purchase but could not see anything there. So I called SSM after 7 days. After the 8th call (the person on the phone asked me to call another number), I finally got to the person in charge. This is the number: 03-2299 4744. She sent me the documents. 
LLP Agreement: The limited liability partnership agreement shall be in the national language or
English language, and shall consist of the following particulars:
(a) the name of the limited liability partnership;
(b) the nature of business of the limited liability partnership;
(c) the amount of capital contribution by each partner; and
(d) that the partners have agreed to become partners of the limited liability partnership
In the absence of an LLP agreement the Second Schedule of the LLP Act 2012 shall apply. (Search for Second Schedule Clauses)

How to Open a Bank Account for Your Limited Liability Partnership. [Mr-Stingy]

LLP Obligations:
  • Register your LLP for a Tax File at a nearby LHDN branch:  Use Form CP 600PT. (Tarikh Mula Akaun is the incorporation date. Tarikh Tutup Akaun is the Accounting period end date. You can leave the Maklumat Ejen Cukai blank if you don't have one).
  • You’ll also need to submit copies of your LLP certificate and stamped LLP agreement. Can stamp LLP agreement at any LHDN branch costs RM 10
  • You will be given income tax no. PT xxxxx xxxxx (10 digit number)
  • File your LLP’s Income Tax Estimate: Use Form CP204. If you’re an SME (less than RM 2.5 million paid-up capital, and not related to a company > RM 2.5 million capital), you don’t need to fill up the tax estimate portion for the first 2 years. Have to fill submit Form CP204 anyway, but leave sections 2 and 6 blank. Tempoh Asas is the business commencement date till the end of accounting period. I was told that all CP204 or LLP related matters are handled by the Bangi branch. If you submit the form somewhere else, they will eventually send the form to Bangi for processing, go to Bangi directly if you want it fast.
  • OPTIONAL: IF YOU HAVE EMPLOYEES-  EPF — within 7 days of hiring an employee. SOCSO — within 30 days.
EMPLOYER’S FILE (Borang Daftar Majikan) & EMPLOYER’S RETURN FORM (Borang E)
  • All LLPs have to register for an Employer’s File which can be done online here: to get the E number in 3 days. My application got approved in 2 days. Partners are not considered as employees. 
  • Submit Employer’s Return Forms (Borang E, example E-2018) by 31st March every year even you don't have any employees, starting from the following year of LLP registration. 
  • Online: According to LHDN, LLP (PLT) can fill out the Borang E online, Login to Select E-filing > e-Borang > e-E (The Borang E for the year will only be available on 1st of March).
  • For offline: To download the form go HERE. Select Borang Majikan and the year of taxation. 
ANNUAL DECLARATION (can be done online here) - first annual declaration needs to be done within 18 months from your LLP’s registration date. For subsequent years, it needs to be done within 90 days from the end of your LLP’s financial year. Example: Registration date: 12th July 2017.
  • Financial year: 1st Jan – 31st Dec
  • First accounting period: 12th July 2017 – 31st Dec 2018
  • First Annual Declaration: 12th July 2017 + 18 months = by 11th Dec 2018
  • Future Annual Declaration: 31st Dec + 90 days = by end March every year
  • Submission of Tax Declaration: 31st Dec + 7 months = by end July every year
Information required: Capital Contribution of each partner, enter 0 if no contribution.
Fiscal Year End, Financial indicators (in RM): Assets, Liabilities, Revenue, Profit/ Loss

  • Submit Within 7 months from the end of your accounting period. For example, 1st Jan to 31st Dec, you need to submit your tax declaration by end July.
  • Manual process. submit Form PT 20xx (BM version) to LHDN by post/hand to Bangi branch.
  • You can download the form HERE - Borang: "Selain Syarikat & Selain Individu" and select year of taxation.
Tax Declaration Terms:
  • Pendapatan Kasar (Gross Income)
  • Pendapatan Larasan (Adjusted Income/ Loss): Gross income minus allowable expenses
  • Elaun Modal (Capital Allowance): Money spent on business assets such as car, machine, furniture, office equipment
  • Pendapatan Berkanun (Statutory Income): Adjusted Income minus Capital Allowance
  • Pendapatan Agregate (Agregate Income): if there are more than one businesses in the company, all the statutory income will be accumulated
  • Pendapatan dikenakan cukai (Chargeable Income): After all adjustments are made, the company tax can be calculated from this amount
  • [Source]
  • Pelupusan aset (Asset disposal) is the act of selling an asset usually a long term asset that has been depreciated over its lifespan like machine.
  • Cukai pegangan (Withholding tax or Retention tax) is an income tax to be paid to the government by the payer of the income instead of the payee. The tax is withheld or deducted from the income to be paid to the payee. For example, employment income.
  • Tempoh asas (basis period) is the period the partnership pays tax each year and is usually the same as the accounting period.
  • Amaun diserap (amount absorbed) - manufacturing costs (variable and fixed overhead costs) that have been assigned to the units of goods produced example: materials, direct labor, rent, and insurance