Articles Of Association For Company Limited By Guarantee Template for Malaysia

When establishing a non-profit organization in Malaysia, you need Articles of Association for a Company Limited by Guarantee to create your legal foundation under the Companies Act 2016. This document serves as your organization's constitution, outlining how your company will operate, be governed, and fulfill its charitable, educational, or public benefit objectives. Unlike traditional companies with shareholders, members of your guarantee company commit to contribute a predetermined amount if the company is wound up, typically ranging from RM1 to RM100.

When do you need this document?

You require Articles of Association when incorporating any non-profit organization in Malaysia that operates for charitable, educational, religious, or community purposes. This includes establishing foundations, NGOs, educational institutions, trade associations, professional bodies, clubs, and religious organizations. The document is mandatory for registration with the Companies Commission of Malaysia (SSM) and must accompany your incorporation application. You also need updated articles when making significant changes to your organization's structure, objectives, or governance procedures that require SSM approval.

Key legal considerations

Your articles must clearly define the company's objects and powers, ensuring they align with non-profit purposes to maintain tax-exempt status under the Income Tax Act 1967. Include specific provisions limiting members' liability to their guaranteed amount and prohibiting distribution of profits to members. Establish clear membership criteria, admission and termination procedures, and voting rights to prevent disputes. Define the board composition, director qualifications, appointment procedures, and decision-making processes in accordance with the Malaysian Code on Corporate Governance. Include provisions for asset distribution upon dissolution, typically requiring assets to be transferred to similar charitable organizations rather than distributed to members.

Legal requirements in Malaysia

Under the Companies Act 2016, your articles must comply with specific statutory requirements including minimum membership numbers, typically seven members for guarantee companies. The document must be in the prescribed format acceptable to SSM and include mandatory clauses such as the company's name, registered office address in Malaysia, objects clause, and liability limitation provisions. Ensure compliance with Section 44 of the Companies Act 2016 regarding prohibited company names and Section 198 covering director duties and responsibilities. If seeking tax-exempt status, your articles must include specific charitable purpose clauses and asset distribution restrictions required by the Inland Revenue Board of Malaysia. The articles must be signed by each initial member in the presence of a witness and submitted with the incorporation application to SSM along with required fees and supporting documents.