Updated: Jan 30, 2022
Tailoring a shelf company
A person wishing to set up a new company in Malaysia has the following options:
they can incorporate a new company in accordance with the Companies Act 2016 (CA 2006), which is tailored to meet its specific requirements upon incorporation (a tailor-made company), or
they can purchase a ready-made company 'off-the-shelf' (i.e., a company that has already been incorporated but which has never traded, or a ‘shelf company’) from a company formation agent and tailor that company to its requirements.
Shelf companies are companies that have been incorporated in advance, typically by a company formation agent, and kept dormant. The original intention of shelf companies, when incorporation could take a number of days, was to provide a quick incorporation method.
The timeframes for incorporating companies has reduced in recent years with the arrival of a days incorporation service by Companies Commission of Malaysia (SSM) and electronic incorporation, meaning that companies can be incorporated at relatively low cost and in days. This has meant that the use of shelf companies has reduced, as there is no longer a significant time saving in using a shelf company.
Common reasons why a person may wish to acquire a shelf company are that they:
do not have time to comply with the incorporation requirements themselves
need to obtain a company more urgently than SSM timeframes or opening hours would allow, or
require a company with a particular incorporation date or accounting reference date
Purchasing a shelf company
To purchase a shelf company, the purchaser will need to instruct a company formation agent, or firm of solicitors (an agent).
Certain steps must be taken to tailor the shelf company after it is acquired, which is typically undertaken in one board meeting and, if required, a shareholders' general meeting.
For a fee, Bestar will provide a shelf company to the purchaser, together with the following comprehensive services covering:
Transferring subscriber shares
Appointing new directors
Appointing a company secretary
Terminating the appointment of the agent's directors and secretary
The registered office
Change of name
Changing the Constitution
The accounting reference date
For our assistance in purchasing a shelf companies, contact us.