Berhad (Bhd) — Public Limited Company

Bahasa Malaysia: Berhad · English: Public Limited Company · 中文: 大众有限公司

When you see “Bhd” at the tail of a Malaysian company’s name — Maybank’s Malayan Banking Berhad, Public Bank Berhad, Tenaga Nasional Berhad — you are looking at a company that is allowed to sell its shares to strangers. That single permission is what separates a Berhad from the far more common Sdn Bhd, and it is why a Berhad lives under a heavier set of rules.

“Berhad” is simply the Malay word for “limited”. It marks a public limited company under the Companies Act 2016 (Act 777), the statute administered by the Companies Commission of Malaysia (SSM). Like its private cousin, a Berhad is a separate legal person that can own property, sign contracts, and sue or be sued, and its members’ liability is limited to what remains unpaid on their shares.

What makes a company a “Berhad” rather than a “Sdn Bhd”?

The Companies Act 2016 draws the line at one question: can the company invite the general public to become shareholders? A private company (Sendirian Berhad) cannot. Section 42(1) defines a private company as one limited by shares with no more than 50 members, and section 42(2) requires it to restrict the transfer of its shares. Section 43(1) goes further — a private company may not offer its shares or debentures to the public, nor invite the public to deposit money with it.

A public company carries none of those restrictions. It has no statutory ceiling on the number of members, its shares are freely transferable, and it may raise money from the public. In exchange, it answers to tougher governance requirements.

Feature	Sdn Bhd (private)	Berhad (public)
Name ends in	”Sendirian Berhad” / “Sdn. Bhd."	"Berhad” / “Bhd.”
Maximum members	50 (s42(1))	No limit
Offer shares to the public	Prohibited (s43(1))	Permitted
Transfer of shares	Restricted (s42(2))	Freely transferable
Minimum directors	1 resident director (s196(1))	2 resident directors (s196(1))
Can be listed on Bursa Malaysia	No	Yes (if it meets the criteria)

Both forms need at least one member to incorporate — the Companies Act 2016 requires every company to have one or more members (s9(b)), a requirement that applies identically to public and private companies — and both must appoint a licensed company secretary. The structural differences flow from who is allowed to hold the shares.

Why would a company become a Berhad?

Most Malaysian businesses never need to. The Sdn Bhd is the default vehicle precisely because its private character keeps ownership tight and compliance lighter. A company converts to — or is incorporated as — a Berhad when it wants something a private company cannot legally do: raise capital from a wide pool of outside investors, or list on a stock exchange.

Going public is not a name change alone. A private company that converts to a public company generally passes a members’ special resolution, adopts a name ending in “Berhad”, and lodges the required documents with SSM. From that point the company must run two or more resident directors, publish more, and prepare for the far more demanding process of a public offering if it intends to raise money.

It is worth stressing a point that trips people up: a Berhad is not automatically a listed company. Plenty of public companies — subsidiaries within large groups, holding companies, and firms that raised money privately — carry “Bhd” without ever trading on Bursa Malaysia. Listing is a further, separate step.

What does it take for a Berhad to list on Bursa Malaysia?

Only a public company can be listed. For a Main Market listing, the Securities Commission Malaysia (SC) reviews and approves the listing proposal under section 212 of the Capital Markets and Services Act 2007, checking it against the SC’s Equity Guidelines and vetting the directors and substantial shareholders. Any offer of shares to the public must be made through a prospectus: for a Main Market IPO the SC registers the prospectus, while for an ACE Market IPO Bursa Malaysia has registered it since 1 January 2022. Bursa Malaysia then admits the company and enforces its Listing Requirements on an ongoing basis.

The company must also clear financial and shareholding thresholds. A Main Market applicant typically qualifies under one of two tests:

Main Market admission test	Threshold
Profit test — aggregate after-tax profit (3–5 financial years)	At least RM20 million
Profit test — after-tax profit in the most recent year	At least RM6 million
Market capitalisation test — total market cap at listing	At least RM500 million
Public shareholding spread	At least 25% of listed shares, at least half of it allocated to Bumiputera investors
Minimum public shareholders	At least 1,000, each holding 100 shares or more
Minimum IPO price (Main Market)	RM0.50 per share

Smaller and earlier-stage companies raise capital on Bursa’s ACE Market. Since 1 January 2022, Bursa Malaysia — not the SC — has been the one-stop centre for ACE Market IPOs, reviewing and registering their prospectuses, and the ACE Market applies lighter admission criteria than the Main Market. In every case the entity that lists is a public company — a Berhad.

Who regulates a Berhad?

Two bodies matter, and they cover different ground:

• Suruhanjaya Syarikat Malaysia (SSM) — the Companies Commission of Malaysia — administers the Companies Act 2016. It governs incorporation, the “Berhad” name, directors, the annual return, and the corporate-law obligations that apply to every company, listed or not.
• The Securities Commission Malaysia (SC) and Bursa Malaysia take over once a Berhad wants to offer securities to the public or list. The SC regulates the capital market and approves Main Market listings under the Capital Markets and Services Act 2007; Bursa runs the exchange and its Listing Requirements, and since 1 January 2022 is also the approving authority for ACE Market IPOs and the registrar of their prospectuses.

A public company that never goes to market answers only to SSM. The moment it seeks public money, the SC and Bursa join in.

What’s next

• Compare the two forms side by side in Sdn Bhd — the private limited company that most Malaysian businesses use.
• Read how the Securities Commission Malaysia polices the capital market and approves listings.
• If you are investing rather than incorporating, see the guide to investing in Bursa Malaysia.
• For the capital side of any company, the paid-up capital entry explains what those share figures actually mean.