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What Is BHD (Berhad)?
BHD, short for Berhad, is a suffix used in Malaysia to designate a public limited company (PLC), signaling limited liability for shareholders, much like LLCs or LTDs elsewhere. It distinguishes publicly traded firms from Sendirian Berhad (SDN BHD) companies, which are private limited entities.
BHD companies must meet stricter reporting and listing requirements to trade shares on Malaysian exchanges, and they play a major role in the country’s economy. Examples include Petronas Gas Berhad and Telekom Malaysia Berhad.
Key Takeaways
- BHD (Berhad) identifies a public limited company in Malaysia, similar to a PLC in the U.K.
- SDN BHD denotes a private limited company, typically smaller in size compared to BHD companies.
- BHD companies must disclose their financial statements to the public and have stricter financial reporting standards.
- Shareholders in both BHD and SDN BHD companies have liability limited to their unpaid shares.
- Despite most BHD companies trading on a stock market, they can choose to remain unlisted.
How Share Issuance Relates to BHD Companies
Both BHD and SDN BHD companies are classified as those that issue shares, which is the most common type of business entity in Malaysia. Such companies have a limited number of shares, and the liability of their shareholders is restricted to the amount specified on their unpaid shares.
Other types of companies in Malaysia are companies limited by guarantees, such as nonprofit organizations, public societies, and unlimited liability corporations (ULC).
Comparing BHD and SDN BHD Companies in Malaysia
A BHD company must have a minimum of two shareholders, and the maximum is unlimited; an SDN BHD company can have two to 50 shareholders. SDN BHD companies are typically small or midsized enterprises (SME) while BHD companies are the largest companies in Malaysia. BHD companies have stricter financial reporting standards than SDN BHD companies because they must disclose their financial statements to the public. BHD firms also have greater access to capital than SDN BHD companies because they can access public equity and debt financing when they require funding.
The incorporation process is similar for both types, but SDN BHD has stricter Articles of Association. These include limits on share transfers, a maximum of 50 shareholders, and bans on public share subscriptions and deposit collections. Although most BHD companies list their shares and trade on a stock market, it is not a mandatory requirement. Therefore, they can choose to stay unlisted.
Examples of Leading BHD Companies in Malaysia
In 2018, the Forbes Global 2000 list included 13 Malaysian BHD companies. According to the Forbes ranking—which is based on a combination of sales, profits, assets, and market value—the largest companies in Malaysia include:
- 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)
The Bottom Line
BHD denotes a public limited company subject to stricter disclosure rules and broader shareholder access, while SDN BHD identifies private firms with restricted share transfers and no public fundraising.
BHD companies are usually larger and more transparent, and though many list on the stock exchange, listing isn’t required. Their scale and regulatory obligations reflect their economic performance.
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