Registration & Governance
Society, company limited by guarantee or incorporated trustees: which structure fits your NPO?
Reference material, not legal or tax advice. Confirm with LHDN or your own advisor before acting.
On this page
The short answer
At a glance
| Society | Company limited by guarantee (CLBG) | Incorporated trustees | |
|---|---|---|---|
| Registrar | Registrar of Societies (ROS / JPPM) | Companies Commission of Malaysia (SSM) | Minister, Prime Minister's Department (BHEUU) |
| Governing law | Societies Act 1966 (Act 832, Revised 2021) [1] | Companies Act 2016, s.45; SSM Guidelines on CLBG, 15 Jul 2025 [2] | Trustees (Incorporation) Act 1952 (Act 258) [5] |
| Separate legal person? | No — property is held by trustees or the governing body, not the society itself [1, s.9] | Yes — a body corporate [2, para 1] | Yes — the trustees become a body corporate [5, s.2(3)] |
| Liability | Not applicable in the corporate sense; the Act shields members from personal enforcement of a judgment against the society [1, s.9(e)] | Each member's liability limited to the amount they undertake to contribute on winding up [2, para 1] | Body corporate is a separate person, but trustees personally remain "answerable and accountable for their own acts" [5, s.6] |
| Governing body | Committee of office-bearers (president, secretary, treasurer, etc.) [1, s.2] | Board of directors, vetted "fit and proper" including a police security check [2, paras 11–12] | The named trustees, appointed under the underlying body's own rules [5, s.5] |
| Audit | Constitution must appoint one or more auditors; Registrar can compel "duly audited" accounts [1, Sch I(1)(k); s.14(4)] | Public company — SSM's private-company audit exemption doesn't apply to it [4, cl.12(b)] | Annual accounts audited by the body's own auditor "if any" [5, s.15(3)] |
| Annual filing | Annual return with accounts to ROS within 60 days of the AGM (or year-end) [1, s.14(1)] | Under the Companies Act's annual return/financial statement regime — see Annual filing deadlines for NPOs | Annual accounts to the Minister within 14 days of being made out [5, s.15(3)] |
| Name | Refused if misleading, identical to an existing society, or "undesirable" [1, s.7(3)(d)] | Must include "Berhad"/"Bhd" unless separately licensed to omit it [2, para 4; paras 25–29] | Must include the words "trustees" and "registered" [5, Schedule] |
| Typical users | Temples, clan/alumni associations, committee-run community groups | Larger charities/foundations wanting corporate governance and institutional donors | Religious bodies and endowments holding property, often alongside an existing society |
| Converting later | No statutory conversion to a CLBG — confirm with ROS/SSM and your own counsel | No statutory conversion from a society — you incorporate new and transfer/wind down | Peninsular Malaysia only [5, s.1(2)] — not available in Sabah/Sarawak |
The rest of this article takes each row in turn. Founders usually default to whatever they already know — a society because that's what the temple committee down the road uses, or a CLBG because a donor asked for an "SSM company" — without knowing these come with different regulators, different reporting duties, and no fast conversion between them later.
Is your organisation a person of its own?
This is the question that actually drives everything else, and it's the one founders skip. A society is not a separate legal entity — it's a club, association or body of seven or more persons [1, s.2] whose movable property is deemed to sit with its governing body, with immovable property held by trustees or registered in the society's name only via a mechanism involving three office-bearers [1, s.9(a)–(b)]. It can sue and be sued, but only through a registered public officer or office-bearer [1, s.9(c)] — a procedural workaround, not full legal personality.
A CLBG is different in kind: a public company incorporated under section 45 of the Companies Act 2016, with the "principal liability of its members limited by the constitution to such amount as the members undertake to contribute... if the company is wound up" [2, para 1]. It is a body corporate from incorporation.
Incorporated trustees land in between. Once the Minister grants a certificate, "the trustees shall thereupon become a body corporate... and shall have perpetual succession and a common seal and power to sue and be sued" [5, s.2(3)] — but section 6 immediately takes back the protection you might expect: trustees "shall be chargeable for such property as shall come into their hands, and shall be answerable and accountable for their own acts, receipts, neglects and defaults... in the same manner and to the same extent as if no such incorporation had been effected" [5, s.6]. Incorporation here protects the organisation's property and continuity across a change of trustees — it does not give the trustees personal limited liability the way a CLBG gives its members.
Practical tip: if a bank, landlord or corporate donor is asking "who is legally responsible for this", that question has three different answers depending on which of the three you've chosen — get it in writing from whichever regulator applies before you sign anything large.
Who runs the organisation, and who's on the hook personally
A society's governing body is its committee of office-bearers — president, secretary, treasurer and committee members, defined broadly to include anyone "responsible... for the management of any of the affairs" of the society or a sub-committee [1, s.9A(7)]. Someone is disqualified if convicted and fined at least RM2,000 or jailed at least a year, subject to a bankruptcy or security-related restriction order, or of unsound mind [1, s.9A(1)].
A CLBG's board is vetted more heavily going in: the Registrar checks that a promoter or director is "fit and proper" — experience, competency, reputation, character and integrity — and may run a police security vetting [2, paras 11–12]. Directors can't be appointed, or paid fees, salaries or fixed allowances, without the Registrar's prior approval [2, para 24(b)(ii)–(iii)].
Incorporated trustees carry a similar disqualification list — conviction, a security-related restriction order, bankruptcy, or unsoundness of mind [5, s.6A] — but trustees are individually named, and any appointment must be notified to the Minister within a month with a bankruptcy search on the new trustee [6, reg. 6; Fifth Schedule].
Practical tip: whichever structure you choose, keep the disqualification list somewhere your nominating committee actually checks before proposing a new office-bearer, director or trustee — all three regulators can force the person out later, but by then you may have already given them signing authority.
What you'll have to show an auditor every year
A society's constitution must provide for "the appointment of one or more auditors" and "the keeping of accounts... and the publication of such accounts to its members annually" [1, Sch I, para 1(j)–(k)]. The Registrar can also order a society to furnish "duly audited accounts" at any time [1, s.14(2)(d), s.14(4)].
A CLBG is incorporated as a public company [2, para 1]. SSM's Practice Directive No. 10/2024 (16 December 2024), which sets the qualifying criteria for audit exemption, states plainly that the exemption "will not be applicable to ... a public company including listed company" [4, cl. 12(b)] — so budget for an annual audit as a CLBG regardless of size. A CLBG must also disclose any donation or contribution it gives or receives in the notes to its financial statements, alongside operational expenses, and keep a running list of who gave or received what and when [2, paras 20–21]. SSM can additionally demand a Financial Information Form at any time [2, para 23].
Incorporated trustees must keep "full and true accounts of all money received and paid" and, by 30 June each year, prepare an account of the previous calendar year's income, balances and money owed [5, s.15(1)–(2)]. That account must be certified by the trustee(s) and "audited by the auditor of the said body or association, if any" [5, s.15(3), emphasis added] — so an incorporated-trustee body's accounts are only audited if it already has an auditor; the Act doesn't itself force one to be appointed. Confirm with BHEUU whether a later regulation has changed this.
A CLBG may also carry a separate beneficial-ownership reporting duty under the Companies Act 2016's wider 2024 amendments (lodged through SSM's e-BOS system) — this article hasn't verified whether or how that applies to a CLBG specifically, so confirm your obligation with SSM directly.
None of the three routes tells you the actual filing deadlines or the penalties for missing them — that's covered, without duplicating it here, in Annual filing deadlines for NPOs.
Naming your organisation
ROS must refuse a society's name if it's misleading, too close to or identical to an existing society's name, or simply "in the opinion of the Registrar, undesirable" [1, s.7(3)(d)]; changing a registered name later needs the Registrar's prior approval [1, s.11(1)].
A CLBG's name carries "Berhad" or "Bhd" by default [2, para 4]. To drop it, a CLBG applies to the Minister for a licence, in accordance with the Companies Regulations (Licence for Omission of "Berhad" or "Bhd.") 2025 [P.U.(A) 213/2025] — a separate instrument this article hasn't independently verified [2, paras 25–26]. The Minister can revoke the licence for non-compliance, and a CLBG then can't reapply for 24 months [2, paras 27–29].
An incorporated-trustee body's title must, by law, include the words "trustees" and "registered" [5, Schedule, item 4]. Changing it later is a fresh Minister application (RM50) with a justification, resolution and amended trust deed [6, reg. 4; Second Schedule].
Raising money from the public: the one that surprises people
Founders often assume that incorporating with SSM gives them more room to fundraise than staying a society. It's the opposite for a CLBG: unless approved by the Registrar, SSM's Guidelines prohibit a CLBG from soliciting "any contribution or donation from the public" [2, para 24(b)(iv)] — and SSM separately publishes a list of CLBGs it has approved to solicit donations, confirming this isn't a dead-letter rule [3]. Apply for that approval early if you plan public campaigns; don't assume incorporation covers it.
Neither the Societies Act nor the Trustees (Incorporation) Act contains an equivalent blanket prohibition for the entity itself — but fundraising still isn't unregulated: street and door-to-door collections need a licence under a separate 1947 Act, and online giving carries its own rules regardless of entity. See Fundraising rules in Malaysia for the full landscape.
Holding land and property
A society's movable property, if not vested in trustees, sits with the governing body; immovable property can be registered in the society's own name via three authenticated office-bearers [1, s.9(a)–(b)]. Every registered society must have one or more trustees, appointed by member resolution [1, s.25].
A CLBG cannot hold or acquire land without a licence from the Minister of Domestic Trade and Consumer Affairs [2, paras 30–31], and cannot charge, mortgage, lease, subdivide, partition, dispose of or transfer land it holds without the Registrar's prior approval [2, para 32].
Holding property with continuity across a change of personnel is the whole reason the Trustees (Incorporation) Act exists: incorporation vests "all property, movable or immovable... belonging to or held by any person in trust" for the underlying body directly in the new body corporate [5, s.3], and future gifts of land "take effect as if the same had been made to... the body corporate" [5, s.11]. This is why many temples pair an existing society (day-to-day governance) with incorporated trustees (holding the land).
Changing your mind later
There is no statutory procedure in either Act for converting a registered society directly into a CLBG, or the reverse — they sit under entirely different registrars and statutes. In practice, a growing society that wants CLBG-style governance registers a new CLBG and transfers its activities, contracts and assets across, while the original society is wound down. A society dissolves by consent of three-fourths of members recorded in an instrument of dissolution, or by Registrar cancellation [1, s.36], with surplus assets applied under its own rules or, failing that, a scheme prepared by the winding-up officer and approved by the High Court [1, s.17(1)(b)]. An incorporated-trustee body dissolves by a trust-deed event or the trustees' unanimous decision with the underlying body's consent [5, s.18], with assets vesting in a newly appointed trustee or, failing that, Amanah Raya Berhad in trust [5, s.19]. Treat a change of structure as a legal project with its own timeline, not a form to file — confirm the mechanics for your facts with ROS, SSM or BHEUU and your own counsel.
What this means for your organisation
- Decide what "separate legal person" buys you. If a bank, landlord or major donor needs to contract with an entity that isn't personally your committee, a CLBG or incorporated trustees answer that; a society doesn't.
- Budget for the audit that comes with your choice. A CLBG's public-company status means an annual audit regardless of size; a society and an incorporated-trustee body tie the requirement to their own constitution or existing arrangements — check yours.
- Going the CLBG route and planning public donations? Apply for that approval early — don't assume incorporation alone covers it.
- Check your proposed name against each regulator's rules — "Berhad" isn't optional by default for a CLBG, and "trustees"/"registered" are compulsory for incorporated trustees.
- Outgrowing your current structure? Start the transfer conversation months, not weeks, ahead — there's no fast-track conversion between any of the three.
- Your 44(6) tax-exempt status is a separate application regardless of structure — see What is s44(6) approval?.
Common questions
Can our society own the building we operate from?
Yes: immovable property can be registered in the society's own name if the instrument is executed by three authenticated office-bearers and sealed with the society's seal [1, s.9(b)]. Many societies instead vest property in appointed trustees.
Do we need SSM's permission to run a public fundraising campaign as a CLBG?
Yes — SSM's Guidelines prohibit a CLBG from soliciting donations from the public without the Registrar's prior approval [2, para 24(b)(iv)]. SSM publishes a list of CLBGs approved for this [3].
Why would a temple register incorporated trustees as well as a society?
Because the Trustees (Incorporation) Act exists to let a small group hold land with continuity across a change of personnel [5, s.3, s.11]. This is a common pairing, not a requirement — confirm what fits your facts with BHEUU or your own counsel.
Are our committee members personally liable for the organisation's debts?
It depends on the structure. A CLBG limits each member's liability to what they've undertaken to contribute on winding up [2, para 1]. Incorporated trustees remain personally answerable for their own acts even after incorporation [5, s.6]. A society isn't a separate legal person at all, so the question is different in kind — get specific advice for your circumstances.
Can we convert our society into a CLBG later without starting over?
Not under a statutory procedure — neither Act provides for it. In practice this means incorporating the new entity and transferring assets and activities across, while winding down the old one under its own rules [1, s.36; s.17]. Confirm the mechanics with ROS, SSM and your own counsel before starting.
Does our choice of structure change whether donors can claim a tax deduction?
No — subsection 44(6) approval is a separate application to LHDN, available regardless of which of the three structures you've chosen, subject to LHDN's own conditions. See What is s44(6) approval?.
Sources
- 1.Laws of Malaysia, Societies Act 1966 (Act 832, Revised 2021), revised up to 14 November 2021, published by the Commissioner of Law Revision. https://www.mdi.gov.my/wp-content/uploads/2025/06/Akta-832-Akta-Pertubuhan-1966.pdf — s.2, s.7(3)(d), s.9, s.9A, s.11, s.14, s.17(1)(b), s.25, s.36, First Schedule 1(j)–(k).
- 2.Suruhanjaya Syarikat Malaysia (SSM), Guidelines on Company Limited by Guarantee, revised 15 July 2025 (replaces the 27 September 2021 version). https://www.ssm.com.my/bm/Pages/Legal_Framework/document/03_Revised%20CLBG%20Guidelines_15%20July%202025.pdf — para 1 nature of a CLBG; para 4 naming; paras 11–12 vetting; paras 20–21 donation disclosure; para 24(b) director/fundraising rules; paras 25–32 Berhad omission, land.
- 3.Suruhanjaya Syarikat Malaysia (SSM), CLBG services page, accessed 28 September 2026. https://www.ssm.com.my/Pages/Services/Registration-of-Company-(ROC)/CLBG/CLBG.aspx — confirms SSM publishes a list of CLBGs approved to solicit public donations.
- 4.Suruhanjaya Syarikat Malaysia (SSM), Practice Directive No. 10/2024: Qualifying Criteria for Audit Exemption for Certain Private Companies in Malaysia, 16 December 2024 (replaces Practice Directive No. 3/2017). https://ssm.com.my/Pages/Legal_Framework/Audit-Exemption.aspx — clause 12(b): exemption excludes a public company (a CLBG).
- 5.Laws of Malaysia, Trustees (Incorporation) Act 1952 (Act 258), reprint as at 1 March 2013. https://i-lib.imu.edu.my/pluginfile.php/583/mod_page/content/4/Trustees%20(Incorporation)%20Act%201952%20%20Act%20258.pdf — s.2 permitted purposes; s.3 property vesting; s.6 trustee liability; s.11 gifts vest in body corporate.
- 6.Attorney General's Chambers, Federal Government Gazette, Trustees (Incorporation) Regulations 2025, P.U.(A) 67, gazetted 19 February 2025. https://strapi.bheuu.gov.my/uploads/3_PERATURAN_PEMEGANG_AMANAH_PEMERBADANAN_7fe2e05fc8.pdf — reg. 3 certificate application; reg. 4 name change; reg. 5 beneficial-owner register; reg. 6 new-trustee notice; reg. 7 five-year retention.
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