PLT vs Sdn Bhd in Malaysia: Which Business Structure Should You Choose?

Reviewed by a Licensed Practitioner

Shahrul Nizar Ghazali

Executive Director, SASCO · Chartered Accountant & Licensed Company Secretary

MIA No: 39799 · SSM Practising Certificate No: 201908001424

When starting a business with a partner, the two most commonly discussed structures in Malaysia are a PLT (Limited Liability Partnership, LLP) and a Sdn Bhd. Most people default to Sdn Bhd simply because the name is familiar, without realising a PLT can actually be a cheaper, simpler structure to set up and maintain — while still giving its owners limited liability protection.

This guide explains what a PLT actually is, how it differs from a Sdn Bhd in terms of fees, tax, and compliance obligations, so you can decide based on your actual business needs rather than habit.

What Exactly Is a PLT (Limited Liability Partnership)?

A Limited Liability Partnership (LLP), known locally as Perkongsian Liabiliti Terhad (PLT), is a business vehicle registered under the Limited Liability Partnerships Act 2012 and regulated by the Companies Commission of Malaysia (SSM) via the MyLLP portal. It blends features of a conventional partnership with the limited liability protection of a company — a PLT is a separate legal entity from its partners, so partners are not personally liable for the LLP’s debts (except for their own wrongdoing or negligence).

• A PLT requires a minimum of 2 partners to register — these can be individuals or corporate entities, and there is no maximum number of partners.
• A single person cannot register a PLT alone — a key difference from a Sdn Bhd, which can be incorporated with just 1 shareholder.
• Every PLT must appoint a Compliance Officer who must be a Malaysian citizen or permanent resident — unlike a Sdn Bhd’s Company Secretary, this role does not require a special licence.
• The official SSM registration fee for a PLT is RM500. If you engage an agent or professional firm to handle registration, a separate service fee typically applies on top of this.

PLT vs Sdn Bhd — Key Comparison

How Is a PLT Taxed?

A PLT is taxed as an entity, similar to a company — not like a conventional partnership where each partner is taxed individually at their personal tax rate.

• The standard PLT tax rate is 24% of chargeable income.
• A PLT that qualifies as a Small and Medium Enterprise (SME) — meaning total capital contribution not exceeding RM2.5 million at the start of the basis period, gross business income not exceeding RM50 million a year, the PLT is tax resident in Malaysia, and it is not more than 50% owned by (or does not own more than 50% of) another company — enjoys a tiered rate: 15% on the first RM150,000, 17% on the balance up to RM600,000, and 24% on the remainder.
• Profit distributed to partners is fully exempt from tax in the partners’ hands, with no withholding tax on the distribution — so there’s no double taxation issue.

When Does a PLT Make Sense, and When Is Sdn Bhd Better?

A PLT tends to make more sense when:

• The business is started by two or more partners who don’t need to raise significant outside capital.
• You’re in a professional partnership — for example accounting, legal, engineering, or consulting firms.
• You want lower setup and annual compliance costs, without a statutory audit requirement.

A Sdn Bhd tends to make more sense when:

• You plan to issue shares to outside investors or venture capital in the future.
• Corporate credibility matters for winning tenders or large contracts with government agencies or corporates.
• You need a formal governance structure with a board of directors and room to bring in more shareholders over time.

Process & Documents to Register a PLT

PLT registration is done entirely online via the MyLLP SSM portal. Basic requirements include:

1. A PLT name approved by SSM (name search can be done in advance).
2. Identity documents (IC or passport) of all partners and the appointed Compliance Officer.
3. A registered address for the PLT in Malaysia.
4. A Partnership Agreement — not mandated by SSM, but strongly recommended to spell out profit-sharing, responsibilities, and how a partner exits later.
5. Payment of the official SSM registration fee of RM500.

Further Reading

• SASCO Company Incorporation & Company Secretary Services
• What Is a Cosec? Company Secretary and E-Secretary Explained
• Strike Off vs Winding Up Malaysia: How to Close Down Your Sdn Bhd
• SSM Official Page — Perkongsian Liabiliti Terhad (PLT)

How SASCO Can Help

Our team at SASCO has experience handling company incorporation as well as ongoing secretarial and compliance services for various business structures in Malaysia. Whether you’ve already decided which structure suits you, or you still need advice comparing a PLT against a Sdn Bhd based on your actual business situation, we can help you understand the process, documents, and annual compliance requirements so your business starts on the right footing.

Don’t let confusion over business structure delay your next step — get the right advice from the start.

Frequently Asked Questions

Can one person register a PLT alone?

No. A PLT requires at least 2 partners (individuals or companies) to be registered — a single person cannot register a PLT alone. This differs from a Sdn Bhd, which can be incorporated with just 1 shareholder.

Does a PLT need to be audited?

No. A PLT is not subject to a statutory audit requirement like a Sdn Bhd. However, accounting records must still be kept for at least 7 years for tax and compliance purposes.

What is the tax rate for a PLT in Malaysia?

The standard rate is 24% of chargeable income. A PLT that qualifies as an SME (capital contribution not exceeding RM2.5 million, gross business income not exceeding RM50 million a year) can enjoy tiered rates of 15% and 17% before the balance is taxed at 24%.

What happens if a PLT is late in filing its Annual Declaration?

SSM can impose a compound of up to RM20,000, plus a continuing penalty of up to RM500 per day if the failure continues after conviction.

Can a PLT be converted into a Sdn Bhd later?

Yes, conversion is allowed under SSM’s framework, but it involves its own procedures and documentation — different from incorporating a new Sdn Bhd from scratch.