What Is BHD (Berhad)?

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What Is BHD (Berhad)?

Let me explain what BHD means—it's a suffix for Berhad, used in Malaysia to mark a public limited company. When you see Berhad, BHD, or Bhd after a company's name, know that it's a Malaysian public limited company (PLC), whereas the full suffix Sendirian Berhad (SDN BHD) points to a private limited company.

Key Takeaways

You should note that Berhad (BHD) is the suffix for public limited companies in Malaysia, and Sendirian Berhad (SDN BHD) is for private ones. SDN BHD companies are usually small or midsized businesses, while BHD companies represent the largest in the country. BHD firms face stricter financial reporting because they disclose statements publicly. And while most BHD companies list shares on a stock market, they don't have to—they can stay unlisted.

Both BHD and SDN BHD companies issue shares, making them the most common business entities in Malaysia. These companies have a limited number of shares, and shareholders' liability is capped at the unpaid amount on their shares. Other company types in Malaysia include those limited by guarantees, like nonprofits or public societies, and unlimited liability corporations (ULC).

BHD Versus SDN BHD

A BHD company needs at least two shareholders with no upper limit, but an SDN BHD can have two to 50. SDN BHDs are typically small or midsized enterprises, whereas BHDs are Malaysia's biggest companies. BHDs have tougher financial reporting standards since they must make statements public. They also get better access to capital through public equity and debt. The incorporation process is similar for both, but SDN BHDs have strict rules in their Articles of Association, like limits on share transfers, a 50-shareholder cap, no public subscriptions for shares or debentures, and no public deposits. Most BHDs list and trade on stock markets, but it's not required—they can remain unlisted.

Real-World Example

Take the 2018 Forbes Global 2000 list, which featured 13 Malaysian BHD companies. This ranking, based on sales, profits, assets, and market value, shows the largest in Malaysia as follows.