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I have seen both, but I am not sure which one to use when speaking.

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Both mean "to have", but "mempunyai" is rather formal. 

In addition to "ada" being used in spoken Malay, ada can also be used like these English equivalents:

1. there is/are/was/were ...  (Ada kemalangan di simpang - There is an accident at the junction)

2. to be (only when talking about location of something/someone) - (Abu ada di bilik - Abu is in the room)​

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