If you’re new to the Malaysian business environment, you may get confused when hearing the term Sendirian Berhad (SDN BHD) and Berhad (BHD). In short, Bhd and Sdn Bhd is one of the two types of business models that can be registered by locals or even foreigners in Malaysia. Sendirian Berhad refers to a private limited company, whereas Berhad is a public limited company.
Before starting a business in Malaysia, here are the major differences between Sdn Bhd and Bhn or Sendirian Berhad and Berhad, compiled from Investopedia, and Simrahman.com.
Definition of Sdn Bhd and Bhd
What is Sdn Bhd (Sendirian Berhad)?
As noted before, referring to its name, Sendirian Berhad—usually abbreviated as Sdn Bhd—can be identified as a private limited company. These types of companies commonly have a Pte Ltd in the end of their company name.
What is Bhd (Berhad)?
In Malaysia, the suffix Bhd which stands for Berhad, is used to indicate a public limited company (PLC). Companies that belonged to the Berhad category are typically signified with a BHD, Bhd, or Berhad term behind the company’s name. Unlike the Sendirian Berhad, Berhad companies have the possibility of owning an unlimited number of shareholders and compliance with rigid financial reporting requirements.
5 Main Differences between Sdn Bhd vs Bhd
Now that you’re familiar with the term Sdn Bhd and Bhd, let’s discuss the differences between these two types of companies:
1. Number of Shareholders
The first aspect that differentiates Bhd and Sdn Bhd is the number of shareholders one company could own. Sendirian Berhad companies can have two to 50 shareholders maximum. On the other hand, Berhad companies can hold an unlimited quantity of shareholders, with a minimum of two shareholders at least.
2. Strictness in Financial Report
Financial reports are among one of the requirements that companies must present to their shareholders. When it comes to financial reports, Berhad companies tend to be more strict about their financial report guidelines, since their financial reports must be accessible to the public. Meanwhile, Sendirian Berhad firms have less stringent financial reporting requirements. But even so, Sendirian Berhad’s more flexible financial reporting standards doesn’t mean that the company can dismiss the standards that have been set by Malaysia’s general Financial Reporting Standards (MFRSs).
3. Company Size
Another key difference between Sdn Bhd and Bhd is the size of the company. Typically, Sendirian Berhad companies consist of small or midsize enterprises (SME). Berhad firms are commonly much bigger in size than Sendirian berhad companies—they’re mainly recognized as the largest enterprises in Malaysia.
4. Public Information
Since Berhad is a public limited company (PLC), they’re required to disclose certain information to the public, for example, information about their financial reports. This gives the Berhad company greater access to capital than Sdn Bhd companies because they can access public equity and debt financing when they require funding. In addition, Berhad also has the responsibility to answer any inquiries from their shareholders.
5. Accessibility to Public Shares
Perks of public companies like Berhad is their shares are allowed for purchase to the general public. This is different from Sendirian Berhad, in which its shares are restricted only to officially signed shareholders.
Example of Sdn Bhd and Bhd Companies in Malaysia
As a popular business entity in Malaysia, there are numerous Bhd and Sdn Bhd firms throughout the country. Some enterprises are even acknowledged globally under the Forbes Global 2000 list. Below are examples of companies classified as Sdn Bhd and Bhd, according to Tarc Education and Investopedia:
List of Bhd Companies
- Axiata Group Bhd
- Ambank Group Bhd
- CIMB Group Holdings Bhd
- Genting Bhd
- Hong Leong Financial Group Bhd
- Maxis Bhd
- Maybank Bhd
- Petronas Chemicals Group Bhd
- Public Bank Bhd
- RHB Bank Bhd
- Sime Darby Plantation Bhd
- Tenaga Nasional Bhd
List of Sdn Bhd Companies
- ASK Resources Sdn Bhd
- •BDS Creative Sdn Bhd
- Digi Telecommunications Sdn Bhd
- Foodpanda Malaysia Sdn Bhd
- 99 Speed Mart Sdn Bhd
- Golden Screen Cinemas Sdn Bhd
- Bufori Motor Car Company (M) Sdn Bhd
- Panasonic Malaysia Sdn Bhd
- Dell Global Business Center Sdn Bhd
- Coway (Malaysia) Sdn Bhd
- Metronic Industries Sdn Bhd
- Rakuten Malaysia Sdn Bhd
Anyone interested in navigating the Malaysian corporate landscape needs to understand the differences between Sdn Bhn and Bhn, the two company types. Depending on your business goals, size, and long-term vision, both Sdn Bhd and Bhd comes with its own benefits. Bhd corporations are a good choice for public investments and expansion on a larger scale, while Sdn Bhd corporations are a lot flexible and private for smaller enterprises.
