Companies Commission of Malaysia issues revised Guidelines on Company Limited by Guarantee

25 July 2025

1. The provisions in the 2021 Guidelines that deal with the application by a Company Limited by Guarantee (“CLBG”) to the Minister for a licence to omit the word “Berhad” or “Bhd.” from the CLBG’s name (“Name Licence”) have been replaced with provisions that refer to the Name Licence Regulations (Paragraphs 25 and 26 of the 2025 Guidelines). 
2. The 2025 Guidelines introduce the following new provisions: 

• a requirement for the Registrar to re-insert the word “Berhad” or “Bhd.” at the end of the name of a CLBG if its Name Licence has been revoked by the Minister (Paragraph 27 of the 2025 Guidelines); and 
• provisions that prohibit a CLBG from applying for a new Name Licence within 24 months of its Name Licence being revoked and that permit a CLBG to re-apply for a Name Licence after the expiry of the aforesaid 24-month period (Paragraphs 28 and 29 of the 2025 Guidelines). 

3. Under the 2021 Guidelines, an applicant may apply for a Name Licence as part of the process of incorporating a CLBG. This is no longer permitted under the 2025 Guidelines as paragraph 4 of the 2025 Guidelines stipulates that a CLBG shall be incorporated with the word “Berhad” or abbreviation “Bhd.” at the end of its name pursuant to section 11(2) and section 25(1)(a) of the Companies Act 2016 (“CA 2016”). 
4. Paragraph 28 of the 2021 Guidelines which requires a CLBG to be incorporated for at least two years befor applying for a Name Licence has been omitted from the 2025 Guidelines. This means that a CLBG may now apply for a Name Licence at any time after its incorporation, subject to its fulfilment of the conditions set out in regulation 2(2) of the Name Licence Regulations.  
5. The provisions in the 2021 Guidelines that deal with the application by a CLBG to the Minister for a licence to hold land (“Land Holding Licence”) have been replaced with provisions that refer to the Land Holding Licence Regulations (Paragraphs 30 to 32 of the 2025 Guidelines). 
6. A significant change from the 2021 Guidelines is that apart from the application for the Land Holding Licence which must be submitted to the Minister (who is the approving authority under section 45(4) of the CA 2016 and the Land Holding Licence Regulations), all applications by a CLBG for approval to charge, mortgage, lease, subdivide, partition, dispose or transfer land are to be dealt with by the Registrar and not the Minister (see paragraph 32 of the 2021 Guidelines and paragraph 32 of the 2025 Guidelines). Whilst paragraph 34 of the 2021 Guidelines made it clear that the Minister had the discretion to impose special terms and conditions relating to the holding, acquiring, charging, mortgaging, selling, leasing or disposing of land, the 2025 Guidelines do not expressly confer discretion on the Registrar to impose terms and conditions in approving an application by a CLBG to charge, mortgage, lease, subdivide, partition, dispose or transfer land under paragraph 32 of the 2025 Guidelines – thus, this point remains uncertain.¹ 
7. In place of the requirement to include a statement in the constitution that the subscribers are desirous of being formed into a company pursuant to the constitution (paragraph 13(f) of the 2021 Guidelines), the 2025 Guidelines require a statement to be included in the constitution on the number of members with which the company proposes to be incorporated (paragraph 14(vi) of the 2025 Guidelines). Further, paragraph 14(vii) of the 2025 Guidelines permits a company to include any other matters as it wishes in the constitution. 
8. The restrictions on payment of fees, salaries and fixed allowances to directors in paragraph 24(c) of the 2025 Guidelines remain substantially the same as in paragraph 23(c) of the 2021 Guidelines except for the following: 

• the period of prohibition from making such payments has been reduced from three years to two years after the CLBG has been incorporated (paragraph 23(c)(i) of the 2021 Guidelines and paragraph 24(c)(i) of the 2025 Guidelines); and 
• the restriction on the maximum amount payable of 30% of the total assets of the CLBG (paragraph 23(c)(iii) of the 2021 Guidelines) has been reduced to a maximum of 30% of the current assets of the CLBG (paragraph 24(c) of the 2025 Guidelines). 

9. Paragraph 10 of the 2025 Guidelines imposes a new requirement that a secretary for a CLBG must have successfully completed a training course focussed on CLBG under the CA 2016 organised by the Companies Commission of Malaysia, within three years from the issuance date of the 2025 Guidelines. Secretaries who have attended such training in the two years preceding the issuance date of the 2025 Guidelines are exempted from the foregoing requirement. 
10. Paragraph 35 of the 2021 Guidelines states that an application submitted under those guidelines may be rejected for failure to meet the requirements of the applicable checklist that accompanies an application. This requirement has been enhanced in paragraph 34 of the 2025 Guidelines to state that an application submitted under the 2025 Guidelines shall be rejected for failure to meet the requirements in the applicable checklist. 
11. A new paragraph 35 has been introduced in the 2025 Guidelines to provide that upon the winding up of a CLBG, its surplus assets shall be transferred in accordance with section 45(2)(c) of the CA 2016 to another body or CLBG which has (i) objects similar to the transferor CLBG; or (ii) objects of promoting charity and anything incidental or conducive to such objects.