# LLP (Perkongsian Liabiliti Terhad): the body corporate that files like a partnership

> Perkongsian Liabiliti Terhad — a body corporate under the LLP Act 2012 that gives partners limited liability without a company secretary or a statutory audit, and the narrow set of cases where it genuinely beats an Sdn Bhd.

- Category: glossary
- Language: en
- Status: published
- Updated: 2026-07-24
- Canonical: https://negaraku.md/en/glossary/llp

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**Bahasa Malaysia:** Perkongsian Liabiliti Terhad · **English:** Limited Liability
Partnership · **中文:** 有限责任合伙

Two things about the Malaysian LLP surprise almost everyone who meets the term
for the first time. It is not a partnership — section 4 of the Limited Liability
Partnerships Act 2012 switches the Partnership Act 1961 off entirely. And it is
not tax transparent: Malaysia taxes the LLP itself, then exempts what it pays
out to partners.

What it actually is: a body corporate with separate legal personality and
perpetual succession under s.3, whose internal affairs are governed by an LLP
agreement instead of a constitution and a board. Its name must end with
"Perkongsian Liabiliti Terhad" or **PLT** (s.13).

## In practice

Registration is with SSM through the MyLLP portal for a fee of **RM500**,
against RM1,000 to incorporate a company. It needs at least two partners —
individuals or bodies corporate, with no upper limit — and at least one
compliance officer who is a citizen or permanent resident ordinarily residing
in Malaysia, drawn from the partners or from people qualified to act as a
company secretary (s.27).

The ongoing load is deliberately light: an annual declaration lodged by any two
partners stating whether the LLP appears able to pay its debts as they fall due,
within 90 days of the financial year end and, for the first one, within 18 months
of registration (s.68). Accounting records must give
a true and fair view and be kept seven years (s.69), but audit is not required
unless the LLP agreement says so (s.69(5)).

## When an LLP beats an Sdn Bhd — and when it doesn't

| Situation | Better fit |
|---|---|
| Two or more principals sharing profits, no outside capital | LLP |
| Chartered accountants, advocates and solicitors, secretaries in practice | LLP — the First Schedule recognises these professional practices |
| You want to avoid a company secretary and a statutory audit | LLP |
| One founder, no partner | Sdn Bhd — an LLP needs two |
| Raising equity, granting share options, planning an exit | Sdn Bhd — an LLP has capital contributions, not shares |
| More than 20% of capital contributed by foreigners or foreign companies | Neither is automatic; para 2E of Schedule 1, ITA 1967 removes the LLP's reduced rate bands |

## Common mistakes

- **Assuming the LLP shields you personally.** Section 21(3) preserves your own
  liability in tort for your own wrongful act. That is precisely why s.8 makes
  professional indemnity insurance a condition for a professional-practice LLP.
- **Letting partner numbers fall to one.** Section 7 allows up to six months
  (extendable by the Registrar to a year); past that, a partner who knew or ought
  to have known becomes personally liable, jointly and severally with the LLP, for
  obligations incurred after that period.
- **Calling it tax transparent.** The LLP is taxed on its own chargeable income;
  profits paid, credited or distributed to partners are exempt under Schedule 6,
  para 12C of the Income Tax Act 1967.

## Related terms

- [Sdn Bhd](/en/glossary/sdn-bhd)
- [Paid-up Capital](/en/glossary/paid-up-capital)

## What's next

For the full decision, including which professions have no other limited-liability
option, read [LLP vs Sdn Bhd](/en/business/llp-vs-sdn-bhd). To set one up, see
[registering an LLP in Malaysia](/en/business/register-llp-malaysia); for the rate
bands and filing form, see [LLP taxation](/en/taxation/llp-taxation).

## Sources

- Limited Liability Partnerships Act 2012 (Act 743) — https://www.ssm.com.my/Pages/Register_Business_Company_LLP/LLP/LLP-Document/LLP-ACT-2012-For-Portal-new.pdf (Suruhanjaya Syarikat Malaysia (SSM))
- Starting a Limited Liability Partnership (LLP) — https://www.ssm.com.my/Pages/Register_Business_Company_LLP/LLP/Starting-a-Limited-Liability-Partnership-(LLP).aspx (Suruhanjaya Syarikat Malaysia (SSM))
- Comparison of Business Entities in Malaysia — https://www.ssm.com.my/Pages/Register_Business_Company_LLP/Business/Business-Document/Comparisons-of-business-entities-in-Msia.pdf (Suruhanjaya Syarikat Malaysia (SSM))
- Income Tax Act 1967 (Act 53), reprint as at 1 November 2023 — https://lom.agc.gov.my/ilims/upload/portal/akta/outputaktap/1822739_BI/ACT%2053%20AS%20AT%201.11.2023%20(REPRINT%20ONLINE%20VERSION)%20FINAL.pdf (Attorney General's Chambers of Malaysia)

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