BHD (Berhad) Definition

What Does BHD (Berhad) Stand For?

BHD is a suffix for Berhad, which is the name given to a public limited corporation in Malaysia. After a firm's name, the suffix Berhad, BHD, or Bhd implies that it is a Malaysian public limited company (PLC), whereas the extended suffix Sendirian Berhad (SDN BHD) denotes that it is a private limited company.

KEY TAKEAWAYS

• In Malaysia, the suffix Berhad (BHD) is used to identify a public limited business. A private limited corporation is identified by the suffix Sendirian Berhad (SDN BHD).

• Small and midsized businesses make up the majority of SDN BHD firms. Malaysia's BHD firms are the country's largest.

• Because they must publish their financial statements to the public, BHD corporations have higher financial reporting criteria than SDN BHD enterprises.

• Although the majority of BHD enterprises publish their shares and trade on a stock exchange, they have the option of remaining unlisted.

BHD and Share Issue

Companies that issue shares, which is the most popular kind of business entity in Malaysia, are classed as BHD and SDN BHD. These businesses have a limited number of shares, and their shareholders' responsibility is limited to the sum listed on their unpaid shares.

Nonprofit organisations, public societies, and corporations with unlimited liability are examples of other forms of companies in Malaysia (ULC).

BHD vs. SDN BHD (BHD vs. SDN BHD)

The minimum number of shareholders for a BHD business is two, while the maximum number is infinite; an SDN BHD firm can have two to 50 shareholders. SDN BHD firms are primarily small or medium-sized businesses (SMEs), whereas BHD companies are Malaysia's largest corporations. Because they must publish their financial statements to the public, BHD corporations have higher financial reporting criteria than SDN BHD enterprises. BHD enterprises also have more financial access than SDN BHD firms since they can take use of public equity and debt financing when they need it.

Although the incorporation process for both types of businesses is similar, Similarly, the Articles of Association of an SDN BHD firm have certain rigorous provisions. These limits include a limit of 50 shareholders on share transfers, a prohibition on public subscriptions to the company's shares or debentures, and the collection of public deposits. Although most BHD firms list and trade their shares on a stock exchange, it is not a necessity. As a result, they have the option of remaining unlisted.

Example from the Real World

In 2018, 13 Malaysian BHD enterprises were listed in Forbes' Global 2000 list. The largest firms in Malaysia, according to Forbes' list (which is based on a mix of sales, earnings, assets, and market value), are:

1. Maybank Bhd (#394) is a Malaysian bank.

2. (#503) Tenaga Nasional Bhd

3. CIMB Group Holdings Bhd (#620) is a Malaysian company.

4. Public Bank Sdn Bhd (#646) is a company based in Malaysia.

5. Petronas Chemicals Group Bhd (#1268) is a Malaysian chemical company.

6. RHB Bank Bhd (#1448) is a Malaysian bank.

7. Axiata Group Bhd (#1508) is a company based in Malaysia.

8. Sime Darby Bhd (#1535) is a company based in Malaysia.

9. Hong Leong Financial Group Bhd (#1568) is a company based in Malaysia.

10. Sime Darby Plantation Bhd (#1624) is a company based in Malaysia.

11. Maxis Bhd (#1779) is a company based in Malaysia.

12. Genting Bhd (#1811) is a company based in Malaysia.

13. AmBank Group Bhd (#1911) is a Malaysian bank.