# Who Counts as a Beneficial Owner in Malaysia?

> The six SSM criteria for identifying a beneficial owner, worked through real Malaysian ownership shapes — holding chains, family nominees, trust-held shares and control without shares.

- Category: company-secretary
- Language: en
- Status: published
- Updated: 2026-07-20
- Canonical: https://negaraku.md/en/company-secretary/who-is-a-beneficial-owner

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The hard part of beneficial ownership reporting is not the filing. It is
standing in front of a shareholding structure and deciding whose name goes in
the box.

SSM publishes the six criteria. What it does not publish — and what no
Malaysian competitor page publishes either — is what those criteria do when
applied to the ownership shapes that actually exist here: the holding-company
chain, the shares parked in a spouse's name, the family trust, and the
patriarch who gave everything away on paper and still decides everything.

## The rule before the examples

Section 60A defines a beneficial owner as a natural person who ultimately owns
or controls a company, and includes a person who exercises ultimate effective
control over a company.

For a company limited by shares, the SSM Guidelines set out six criteria. An
individual is a beneficial owner if they meet **one or more**:

| | Criterion |
| --- | --- |
| **A** | Holds directly or indirectly not less than 20% of the shares |
| **B** | Holds directly or indirectly not less than 20% of the voting shares |
| **C** | Has the right to exercise ultimate effective control, formal or informal, over the company, its directors or its management |
| **D** | Has the right or power, directly or indirectly, to appoint or remove directors holding a majority of voting rights at board meetings |
| **E** | Is a member who, under an agreement with another member, alone controls a majority of the voting rights |
| **F** | Holds less than 20% of shares or voting shares but exercises significant control or influence over the company |

Shares means ordinary shares. All six must be assessed — you do not stop at the
first hit. For a company limited by guarantee, only C, D and E apply.

Two absolutes frame everything below. A beneficial owner is always a natural
person, so a corporate entity can never be named. And a nominee is never the
beneficial owner: the Act's definition of beneficial owner in relation to
shares expressly excludes a nominee of any description.

## Shape 1: the holding-company chain

*Maju Teknologi Sdn Bhd is wholly owned by Maju Holdings Sdn Bhd. Maju Holdings
is owned 60% by Encik Rahman, 25% by Puan Aminah and 15% by Mr Lim.*

You do not name Maju Holdings. You trace through it and compute each
individual's **effective interest** in Maju Teknologi:

| Person | Interest in Holdings | Effective interest in Teknologi | Beneficial owner? |
| --- | --- | --- | --- |
| Encik Rahman | 60% | 60% × 100% = 60% | Yes — Criteria A and B |
| Puan Aminah | 25% | 25% | Yes — Criteria A and B |
| Mr Lim | 15% | 15% | Not on A or B — assess C to F |

Mr Lim falls below the threshold on ownership. That is not the end of his
analysis: if he is the person whose recommendations the Maju board invariably
follows, Criteria F brings him back in.

Now make it harder. Suppose Maju Holdings owns only 30% of Maju Teknologi.
Encik Rahman's effective interest becomes 60% × 30% = 18% — under the
threshold. Multiply through every layer; do not assume that control of the
parent means 20% of the subsidiary.

## Shape 2: shares in a family member's name

*Datin Sarah holds 100% of the shares in Sarah Enterprise Sdn Bhd on the
register of members. In substance the shares were paid for by her husband, who
signs the bank mandates, negotiates the contracts and instructs her how to
vote.*

The register of members says Datin Sarah. The register of beneficial owners
says her husband — and, depending on the facts, both.

This is the arrangement the nominee exclusion exists to reach. Where an
individual holds shares for another, the beneficial owner is the person behind
the holding. The Guidelines are explicit that Criteria A and B include joint
interests, joint agreements and nominees.

Two practical points. First, the arrangement need not be documented to be real
— Criteria C reaches control that is informal. Second, the company cannot
resolve this by inference alone: it must issue the s.60C(1) notice to Datin
Sarah, and if she answers that she is not the beneficial owner, she is required
to name the person who is.

## Shape 3: trust-held shares

*20% of Warisan Sdn Bhd is held by a trustee under a family trust for the
benefit of three adult children.*

Look at who genuinely controls the shares and who ultimately benefits. Where
the trustee holds as a nominee-like intermediary, the individuals with the
beneficial entitlement come into view; where the trustee exercises real
discretion over voting, the individuals controlling the trustee may meet
Criteria C.

Where the trustee is a trust company registered under the Trust Companies Act
1949, the trust company is itself a company subject to the beneficial ownership
framework in its own right. SSM has stated that a separate set of
guidelines will govern beneficial ownership of legal arrangements, so trust
companies will eventually sit under two frameworks. Until that is published,
the position for a discretionary trust with no vested beneficiary is the
weakest point in the current guidance, and it is flagged in
`verificationNeeded` on this page rather than guessed at.

What you can do now is document the analysis, issue the s.60C(2) notice to the
trustee, and keep the reply. Evidence of a reasoned attempt is what the
framework asks for.

## Shape 4: the person holding no shares at all

*Encik Faisal founded Bina Jaya Sdn Bhd. In 2019 he transferred every share to
his two children. He holds no shares and is not a director. He attends every
board meeting, and the board has never once decided against his view.*

Encik Faisal is a beneficial owner under Criteria C.

The Guidelines say an individual exercises ultimate effective control when the
recommendation made by them is always followed by the members holding a
majority of the voting rights — and, after the January 2025 revision, by the
majority of the board of directors. The individual need not be a member or a
director, but consistently exercises dominant influence or is regularly
consulted for the decisions of the board.

Paragraph 26 puts it beyond doubt: the individual who has ultimate effective
control is not necessarily someone who holds shares in the company or holds any
position in it.

This is the limb Malaysian family businesses fail. The shares moved for estate
or tax reasons; the authority never did. If the honest answer to "who actually
decides?" is a name that appears nowhere in your statutory registers, that name
belongs in the register of beneficial owners.

## Where the line stops: professional advice

Paragraph 34 provides that an individual who gives advice, recommendations or
proposals **in a professional capacity** is not to be treated as having the
right to exercise significant influence or dominant control.

Your company secretary, auditor, tax agent and solicitor do not become
beneficial owners because the board follows their advice. The distinction is
capacity, not frequency.

## Recording the answer

Once identified, thirteen particulars must be obtained for each beneficial
owner, including full name, usual residential address, nationality, date of
birth, race, gender, NRIC or passport number, the type and criteria of
beneficial owner, and the date they became one.

Where an individual meets more than one criterion, **each criterion must be
recorded**. A 60% individual shareholder who also controls board appointments
is recorded against A, B and D — not just A.

If the analysis genuinely produces no identifiable beneficial owner, the
company names a natural person in senior management in place of one, and keeps
working on the identification.

## Common mistakes

- **Naming the corporate shareholder.** The most common error in the whole
  framework. Trace through to a human being.
- **Stopping at Criteria A.** All six must be assessed. Ownership and control
  are different questions with different answers.
- **Treating the register of members as the answer.** It is the starting
  document, not the conclusion — that is the entire point of Division 8A.
- **Counting preference shares** towards the 20%. Only ordinary shares count.
- **Ignoring the founder who gave the shares away.** Criteria C and F exist
  precisely for that person.
- **Recording only one criterion** where several are met.
- **Multiplying the chain wrongly** — 60% of a parent holding 30% of the
  subsidiary is 18%, not 60%.

## What's next

Once you have the names, the mechanics take over: the particulars go into the
register within 14 days of receipt under
[keeping the BO register](/en/company-secretary/bo-register), and the lodgement
runs from the register entry, not from the identification — see
[filing BO information through e-BOS](/en/company-secretary/ebos-filing).

Where the analysis stalls because a shareholder will not answer, the escalation
path is set out in
[when the beneficial owner will not respond](/en/company-secretary/bo-non-cooperation).

## Sources

- Guidelines for the Reporting Framework for Beneficial Ownership of Companies (Revised 10 January 2025) — https://www.ssm.com.my/Pages/Legal_Framework/Document/Guideline%20BO%20(Revised)%202025%20fair.pdf (SSM)
- Companies (Amendment) Act 2024 [Act A1701] — https://www.ssm.com.my/Pages/Legal_Framework/Document/A1701%20BI.pdf (SSM)
- FAQ — Beneficial Ownership Reporting Framework of Companies — https://www.ssm.com.my/Pages/Legal_Framework/FAQs%20on%20BO%20(English).pdf (SSM)
- Case Studies and Illustrations of the Guidelines for the Reporting Framework for Beneficial Ownership of Companies — https://www.ssm.com.my/Pages/Legal_Framework/Document/02_Case%20Studies%20&%20Illustrations%20(Post%20T&P)%20Final%20Uploaded%20Version.pdf (SSM)

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