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Formalities & Statutory Requirements

The information provided below is intended to act as a general guideline. It is your responsibility to check that you have fulfilled ALL the necessary statutory requirements for the setting up of your legal practice.
 
BAR COUNCIL RULINGS
 
OTHER STATUTORY REQUIREMENTS
 
SIJIL ANNUAL AND PRACTICING CERTIFICATE REQUIREMENTS
 
MERGING YOUR FIRM / CHANGES TO YOUR FIRM

 

BAR COUNCIL RULINGS

The Rules and Rulings of The Bar Council Malaysia must be complied with prior to setting up a firm.
All Bar Council Rules and Rulings can be found on the Malaysian Bar Council website
 

Step 1: Informing The Bar Council


You should write a notice of intention to set up a firm to the Bar Council if you intend to start a practice. This notice must be executed by the intending sole proprietor or all partners (if applicable).

 
Ruling 7.06 – Setting Up of A New Firm
The notice to Bar Council should contain the following particulars:
1. Proposed name;
2. Proposed address;
3. Proposed date of commencement;
4. Telephone, facsimile numbers and email address of the new firm.
 
The Bar Council may then issue either a letter of objection/no objection pursuant to Ruling 7.06(3).
Ruling 7.06 (3)(a) – Letter of Objection
If the proposed name is already a registered name of another law firm or is not in accordance with Section 85, LPA, the intending sole proprietor or the partners shall be required to submit a fresh name for approval.
 
Ruling 7.06 (3)(b) – Letter of No Objection
Bar Council may issue a letter of no objection subject to the following conditions:
1. The intending sole proprietor/partners is/are in possession of a valid Sijil Annual and Practising Certificate; and
2. Sole proprietor/partners have obtained the required mandatory Professional Indemnity Insurance (PII) cover.
Ruling 7.06 (3)(c)– Record in the System
Upon the issuance of the letter of no objection, the new firm and its particulars shall be recorded in the Bar Council Membership Department system.
 

Step 2: Choosing A Firm Name


 
When choosing a firm name, the following must be taken into account:
 
The firm’s name must be identified, and
Requirements of Section 85, Legal Profession Act 1976 (LPA 1976) must be complied with.
 
Section 85 of the LPA 1976 stipulates that no firm name shall be registered without a certificate from the Bar Council. It allows the Bar Council to refuse a certificate for registration on the grounds that the proposed firm name is likely to be confused with a registered firm name or is likely to mislead the public. 
 
The Bar Council has also issued the following rulings governing firm names:
 
Ruling 2.01 (1) – Variant Spelling
Advocate & Solicitor may not use variant spelling of his own name that does not appear in identity card.
 
Ruling 2.01 (4) – Surname
Firm name may include the surname of an Advocate & Solicitor who is a partner or sole proprietor.
 
Ruling 2.02 – Vernacular Language
Firm name in vernacular language to be approved.
Vernacular language of a name requires the approval of Bar Council.
 
Ruling 2.03 – Restrictions
Descriptions which are not permitted in firm name.
It is not permitted to include academic qualifications, awards and title in a name.
 

Step 3: Locating Your Legal Practice


 
Deciding on the premises of your legal practice involves more than deciding on which office space you should rent out, the size of the space and the exact location. It is pertinent that following Bar Council rulings are taken into account before you decide on the location of your premises.
 
Ruling 7.01(3) – Person in charge of Advocate and Solicitor’s Office
No office of an Advocate and Solicitor or law firm shall be manned solely or left under the supervision of a person not holding a valid practising certificate
 
Ruling 7.01(6) – Operating Hours
The office must be open during usual office hours and at least five days a week
 
Ruling 7.02 – Not to carry on practice in client’s office
It is impermissible to maintain an office or carry on your legal practice in a client’s office which includes a housing developer’s office.
 
Ruling 7.03 – Sharing Office
Sharing of office premises, whether with another Advocate and Solicitor or not, may be allowed provided that the office or premises is partitioned off with separate and distinct entrances, with no connecting door between the two offices or premises.
 
Ruling 7.04 – Advocate and Solicitor may practise from his residence
While it is permitted to operate from your residence, it is advisable to see your clients somewhere else.
 
You should note that if you intend to carry out practice from your residence, you must check if your home can be used for a commercial/business purpose.
Arrangements should also be made to protect clients’ confidentiality.
 

Step 4: Displaying Your Nameplate, Signboard and Letterheads


Rulings related to the display of nameplates and signboard

Ruling 2.04 – Display of nameplate and signboard
 
No nameplate of a law firm shall be placed at the main entrance of an Advocate and Solicitor’s residential premises unless his firm is located at such residence.
 
Your name plate and signboard must not be placed on any road leading to or on any road in the vicinity of the law firm.
 
Any arrows or signs indicating direction to the law firm is not permitted as well, unless there may be a difficulty in locating such a law firm. However, the arrows/pointers or other signs must be discreet, unobtrusive and compatible with the dignity of the legal profession.
 
Ruling 2.05 – Lighted nameplate and signboards
 
Lighted nameplates and signboards are permitted only if these are not incompatible with the dignity of the legal profession.
 
Rulings related to your letterhead
 
Ruling 3.01 – Use of colours in letterhead
The use of colours is permitted provided that it is compatible with the dignity of the legal profession.
 
Ruling 3.02 – Names on letterhead and stationery
1. The name of the sole proprietor or every partner must be stated on the letterhead
2. Names of legal assistants must be distinguished from the sole proprietor or partners of the firm and listed in categories. A person can only be described as a legal assistant unless he is an Advocate or Solicitor holding a valid practising certificate.
3. A Syariah practitioner may only be a sole proprietor, partner, consultant or a legal assistant only if he is an Advocate and Solicitor, holding a valid PC.  Only then can the name of the Syariah Practitioner appear on the letterhead and stationery of the law firm.
4. An Advocate and Solicitor who has left the firm shall not have his name appear on any letterhead or stationery of the firm.
5. An Advocate and Solicitor who is temporarily not practising shall not be described as being “on leave”
6. Any person who is not an Advocate and Solicitor shall not have his name on the letterhead and stationery of a law firm
7. A registered patent agent who is not an Advocate and Solicitor may not have his name appear on the letterhead and stationery of a law firm.
 
Ruling 3.03 – “Managing Partner” allowed on firm’s letterhead.
The inclusion of the designation “managing partner” on a law firm’s letterhead and stationery is permitted.
 
Ruling 3.04 – Descriptions or statements not permitted on letterhead and stationery
The following descriptions or statements are not permitted on the letterhead or stationery of a law firm:
1. “Articled clerk”
2. “Counsel”
3. “High Court lawyer” or any other similar vernacular laudatory description of an Advocate and Solicitor
4. “Senior Advocate and Solicitor”
 
Ruling 3.05 – Logo, elaborate or decorated script or style permitted
The use of any logo, insignia, seal of the firm and any elaborate or decorated script or style on a law firm’s letterhead and stationery is permitted provided that it is in a manner which is unobtrusive and not incompatible with the dignity of the legal profession.
 
Ruling 3.06 – Chinese seal
The use of a Chinese seal is permitted provided it is limited to the name of the law firm and is discreet, unobtrusive and not incompatible with the dignity of the legal profession
 
Ruling 3.07 – Chinese character (Da)
The Chinese character (Da) which connotes “big” shall not be included on a law firm’s letterhead, stationery or signboard.
 
Ruling 3.08 – Telephone and facsimile numbers
The telephone and facsimile numbers of a law firm must be stated in the firm’s letterhead
 
Ruling 5.14 – Company or Corporation’s letterhead
The name of an Advocate and Solicitor may be printed on the letterhead and stationery of a company or corporation, provided that he may not be described as an Advocate and Solicitor.

 

OTHER STATUTORY REQUIREMENTS


The Inland Revenue Board of Malaysia (IRBM)


 
Things you need to do:
1. Write to the IRBM that you are no longer a tax payer under the employee category. NB: Ensure that you inform BOTH the assessment branch and the collection branch.
2. Register a "Partnership" File (P File) if applicable. This file will have reference beginning with the alphabet "D xxxxxxxxx"
3. Register an "Employers Remuneration File" (commonly referred to as the E File) regardless of whether you have any employee/s. As a business owner, you will be required to submit your yearly reports on remuneration matters before 30 March each year. Failure to do so will result in heavy penalties being imposed.
 

The Royal Malaysian Customs and Excise Department


Note: Remember

You must register for a service tax licence.  
The RM150,000 threshold for professional, consultancy and management services has been abolished.
Professional services that are subject to service tax are accounting, legal, engineering, architecture, survey, valuation appraisal and real estate agency.
It is an offence to provide a taxable service without a service tax licence.
Do not issue an invoice without obtaining your Service Tax Licence.
Refer to Group G, Second Schedule, Service Tax Regulations 1975.
 
IMPORTANT: Once the Goods and Services Tax Act 2009 comes into force, legal firms may no longer be required to charge service tax. This is subject to the registration requirement which provides that businesses with annual sales turnover exceeding RM500,000 are required to register. 
 

Personal Data Protection Act 2010


 
The Personal Data Protection Act 2010 (PDPA 2010) was passed in 2010 and came into force on 15 November 2013.
By virtue of Section 14(1) of the PDPA 2010 and the Schedule 2(9) of the Personal Data Protection (Class Of Data Users) Order 2013, a company registered under the Companies Act 1965 or person who has entered into partnership under the Partnership Act 1961 carrying out legal services is required to register as a data user.
Your application for registration should be accompanied with the prescribed registration fee and the Form 15(1)
The registration form can be obtained from the Jabatan Perlindungan Data Peribadi’s website.
The flowchart below briefly explains the registration process
 
PDPA-flowchart.jpg
 
 
The following methods of payment are acceptable and should be addressed to “Pesuruhjaya Perlindungan Data Peribadi and crossed out with “A/C Payee only”.
Kiriman Wang (need to find English translation for this)
Postal Order
Bank Draft
Cheque

The above should be posted or presented to the following address:
Kaunter Pendaftaran
Bahagian Pendaftaran dan Operasi
Jabatan Perlindungan Data Peribadi
Aras 6, Kompleks Kementerian Komunikasi dan Multimedia
Lot 4G9, Persiaran Perdana, Presint 4
Pusat Pentadbiran Kerajaan Persekutuan
62100 Putrajaya
 
Currently, sole proprietors do not have to register with the Commissioner. 
 
Please note that whilst registration is only compulsory for legal practices under the Partnership Act 1961, compliance with the Act is compulsory for ALL Members of the Malaysian Bar.
 
For more information, please refer to the Personal Data Protection Department’s website at www.pdp.gov.my and the Malaysian Bar Council’s Circular No 023/2014.

 


SIJIL ANNUAL "SA" AND PRACTISING CERTIFICATE "PC"

Section 36(1) & 37 of the LPA stipulates that an Advocate & Solicitor is only permitted to practice if he is in possession of a valid PC, failing which, he is deemed to be an unauthorised person.
 
Section 29 of the LPA provides that an Advocate & Solicitor’s PC must be renewed annually.
 
Both SA and PC applications are processed by the Bar Council secretariat. Note that the:
  • SA is issued by Bar Council; but
  • PC is issued under the hand and seal of the Registrar of the High Court.
The Advocate & Solicitor may obtain the SA application form by the following means:
  • Downloading from the Malaysian Bar website here
  • Collecting a copy from the respective State Bar Committees or Bar Council Secretariat.
The SA Application Checklist available here will provide some information on the type of documents needed and fees imposed when applying for SA.
 
Once the PC is ready for collection, the Bar Council Secretariat will send a letter to the firm informing as such. Only authorised representatives will be allowed to collect the PCs. Hence your chosen representative is required to bring along a letter from the firm evidencing that the person is authorised to collect the PCs.
 
It is prohibited for an Advocate or Solicitor to practise without possessing a valid PC. In the event a complaint is received against any Member, the Bar Council may:
 
  • Refer the complaint to the Disciplinary Board;
  • Commence injunction proceedings to prohibit the Member from practising; and
  • Institute contempt proceedings against the Member concerned for breach of order imposed by the Disciplinary Board prohibiting the lawyer from practice.
To avoid such action being taken, the lawyer concerned should immediately cease practice and notify Bar Council in writing, undertaking not to practice pending the issuance of a valid SA or PC.
 

MERGING YOUR FIRM/ CHANGES TO YOUR FIRM

If you are merging your firm or making a change to the name of your firm, you need to obtain a “Letter of No Objection” from the Bar Council.
 
You are also required to notify the Scheme Brokers of the changes to your firm. 
 
Information on Professional Indemnity Insurance (PII) formalities with regard to mergers and changes to your firm can be found here
 
Note: The information above is extracted from "Setting Up Practice". For more information, please contact the PII and Risk Management Department.