What paid-up capital is required for an AJL licence?

Capital requirements vary by licence category and have changed over time. The current figure should be confirmed with KPDN for the specific category being applied for.

Can an AJL application be made before products are finalised?

Not sensibly. Products and pricing form part of what is assessed, and the price structure must reconcile with the marketing plan. A provisional product list usually produces queries.

Is there a maximum payout for an MLM compensation plan?

The assessment question is whether the payout is fundable from product margin and sustainable as the network grows, rather than whether it falls under a fixed percentage.

Requirements – AJL License

Q: What must a buy-back policy contain?

It sets out how a company repurchases unsold, resaleable stock from sellers who leave, on what terms and within what period. It is submitted with the application.

Requirements checklist

Tick what you already have. Nothing is sent anywhere and nothing is stored: this is for your own reading.

Your readiness

0 of 16 complete

The company

Incorporated in MalaysiaA Sdn Bhd. Sole proprietorships and partnerships cannot hold the licence. Shareholding settledOwnership and any foreign holding resolved, since it is assessed with the application. Directors appointed and availableThey will need to explain the plan at interview, not just sign the forms. Business scope covers direct sellingThe registered scope should match what you are applying to do.

The marketing plan

Compensation model decidedMLM, single-level, mail order or combined. This sets the licence category. Plan documented in fullRanks, qualifications, bonuses and conditions written down, not held in conversation. Payout modelled against marginEvidence the plan is fundable from product margin as the network grows. Plan justification draftedThe written argument that income follows sales rather than recruitment.

Products and pricing

Product list finalisedProducts are assessed as part of the application and tied to the licence. Costs and margins knownNeeded before any payout percentage can be defended. Price structure preparedFormat A, line by line, reconciling with the marketing plan. Any sector approvals identifiedSome product categories carry their own regulatory requirements.

Documents

Borang AJL-1 completedThe application form itself, filled against the final structure. Company information and performanceCorporate particulars, directors, shareholding and trading record. Direct sales contract draftedContaining what the Act requires, cooling-off terms included. Buy-back policy draftedYour undertaking on repurchasing unsold stock from sellers who leave.

Start ticking to see where you stand. Discuss the gaps

This checklist covers the substance of an application. It is not the KPDN form checklist and does not replace advice on your specific case.

The requirements that catch people out

Four that are easy to read past and expensive to get wrong.

The licence must come before trading

Section 4 makes carrying on direct sales business without a valid licence an offence. That includes signing up distributors and taking deposits during a pre-launch. It is not a technicality, and it surfaces during assessment.

Only an incorporated company can hold it

Sole proprietorships and partnerships are not eligible. If you are trading as an enterprise now, the structure has to change before the application makes sense.

Products are part of the licence

Your approved product list is tied to the licence. Adding products later needs approval before they are distributed, not after.

The documents are read together

Price structure, marketing plan and contract are assessed as one set. A commission rate that differs between two of them is a contradiction, not a typo.

Common questions

What paid-up capital is required?

Capital requirements vary by licence category and have changed over time, so we confirm the current figure with KPDN for your specific category rather than quoting one that may be out of date. It is one of the first things settled in the structure review.

Do directors have to be Malaysian?

Director and shareholding requirements are assessed as part of the application and depend on your structure. We review yours against current practice before anything is drafted.

Can I apply before my products are finalised?

Not sensibly. Products and their pricing form part of what is assessed, and the price structure has to reconcile with the marketing plan. Filing with a provisional product list usually produces queries that cost more time than waiting would have.

What does the buy-back policy have to say?

It sets out how you repurchase unsold, resaleable stock from sellers who leave, on what terms and within what period. It is submitted with the application and is one of the documents assessors read closely, because it is where a sales business and a recruitment scheme look most different.

Does my compensation plan have a maximum payout?

The question assessors are really asking is whether the payout is fundable from your product margin and sustainable as the network grows. We model it rather than aiming at a single number, because a plan can be under any given percentage and still be structurally unsound.

AJL licence requirements in Malaysia