BHD is a suffix for Berhad, used in Malaysia to identify a public limited company. When you see Berhad (BHD) or Bhd after a company’s name, it signifies that the entity is a Malaysian public limited company (PLC). Conversely, the suffix Sendirian Berhad (SDN BHD) denotes that a company is a private limited corporation.
Key Takeaways
- Berhad (BHD) is used in Malaysia to signify a public limited company. Sendirian Berhad (SDN BHD) identifies a private limited company.
- SDN BHD companies are typically small or midsized enterprises. BHD companies are among the largest corporations in Malaysia.
- BHD companies adhere to stricter financial reporting standards compared to SDN BHD companies, as they must disclose their financial statements publicly.
- While most BHD companies list their shares and trade on a stock market, they can also choose to remain unlisted.
Share Issue and BHD
Both BHD and SDN BHD companies in Malaysia issue shares, constituting the most common type of business entity. Such companies have a limited number of shares, and shareholders’ liability is restricted to the amount unpaid on their shares.
Other corporate structures in Malaysia include companies limited by guarantees, such as nonprofit organizations, public societies, and unlimited liability corporations (ULC).
BHD Versus SDN BHD
A BHD company must have a minimum of two shareholders, with no upper limit; an SDN BHD company allows for two to 50 shareholders. SDN BHD companies are typically small or midsized enterprises (SME), while BHD companies represent the largest corporations in Malaysia. BHD companies must disclose their financial statements publicly, adhering to strict financial reporting standards. BHD firms have greater access to capital due to their ability to access public equity and debt financing.
Although both BHD and SDN BHD companies undergo similar incorporation processes, an SDN BHD company faces specific restrictive stipulations in its Articles of Association. These include restrictions on share transfers, a maximum limit of 50 shareholders, a prohibition on public subscriptions to the company’s shares or debentures, and on collecting public deposits. Despite most BHD companies listing their shares on stock markets, it is not mandatory for them to do so.
Real-World Example
In 2018, the Forbes Global 2000 list featured 13 Malaysian BHD companies. Based on a combination of sales, profits, assets, and market value, the largest companies in Malaysia included:
- Maybank Bhd (#394)
- Tenaga Nasional Bhd (#503)
- CIMB Group Holdings Bhd (#620)
- Public Bank Bhd (#646)
- Petronas Chemicals Group Bhd (#1268)
- RHB Bank Bhd (#1448)
- Axiata Group Bhd (#1508)
- Sime Darby Bhd (#1535)
- Hong Leong Financial Group Bhd (#1568)
- Sime Darby Plantation Bhd (#1624)
- Maxis Bhd (#1779)
- Genting Bhd (#1811)
- AmBank Group Bhd (#1911)
Related Terms: PLC, SDN BHD, limited liability, public company, market value.
