Business Entity
Company Formation & Corporate Structuring
Meet Your Needs
符合您的需求
When you set up a business, the most important thing is to choose the business
entity that meets your needs. Business entity will influence the
tax you need to pay, as well as the paperwork you need to handle your business and the
risk management of individuals and businesses.
In Malaysia, SMEs can choose from the following four business
entities:-
1. Sole-proprietor
2. Partnership
3. Private Limited Company
(Sdn. Bhd.)
4. Limited Liability Partnership (LLP)
当您成立一个生意时，其中最为重要的是选择符合您的需求的生意个体。生意个体将影响您所需要缴付的税务，同时也影响您生意运作时所需处理的文书工作以及个人与生意的风险管理等。
在马来西亚，中小型企业者可以选择以下四种生意个体：
1.
独资经营/个人企业
2. 合伙经营/合伙企业
3.
有限公司
4. 有限合伙经营/有限合伙企业
| Sole proprietorship | Partnership | Limited Liability Partnership | Private Limited Company | |
|---|---|---|---|---|
| Entity name | Choice of Trade Name subjected to ROB approval | Choice of Trade Name subjected to ROB approval | Company name ended with the word “PLT” (Perkongsian LiabilitiTerhad) | Company name ended with the word “Sdn Bhd” (Sendirian Berhad) |
| Capital contribution | Own contribution | Partners contribution | Partners contribution | Share capital |
| Legal owner(s) of the business | Sole proprietor | Partners | LLP (Partners have a share in capital and profits of the LLP) | Shareholders |
| Legal Status | Not a separate legal entity | Not a separate legal entity | Separate legal entity | Separate legal entity |
| Party that is liable for debts of the business | Sole proprietor | Partners | LLP | Company |
| Responsibility for management of business | Sole proprietor | Partners | Partners | Board of Directors |
| Personal liability | Unlimited liability which can extend to personal assets of the sole proprietor | Unlimited liability (Jointly and severally liable with the partnership) which can extend to personal assets of the partners | No personal liability of partner, except for own wrongful act or omission or without authority liabilities borne by the partners are jointly and severally with the LLP to the extent of unpaid share capital only |
No personal liability of individual director or shareholder Liabilities borne by the directors or shareholders are to the extent of unpaid shares only |
| No. of shareholders/partners | Sole proprietor only | 2 to 20 partners (Except for partnerships for professional practice with no maximum limit) | Minimum 2 and no maximum limit | Minimum 1 and maximum 50 in private company |
| Company secretary / compliance officer | N/A | N/A | Compliance officer or partner of the LLP | Qualified company secretary |
| Statutory Audit Requirement | No audit required | No audit required | No compulsory unless it is provided in the partnership agreement | Required to be audit |
| Annual compliance | Must lodge on annual declaration and solvency statement with CCM (The 1st within 18 months from the date of registration and thereafter, 90 days from the end of the financial year) | Must file annual return and financial statements every calendar year | ||
| Annual submission to SSM | Annual declaration | Annual return with audited / unaudited financial statement | ||
| Annual fee to SSM |
Trade name (RM60 per year) Personal Name (RM30 per year) |
Trade name (RM60 per year) | RM200 | RM200 |
| Income tax status / income tax rates | Tax on sole proprietor from 0% to 28% | Tax on partners from 0% to 28% |
Tax on LLP On the first RM500K at 18% (SMEs) After RM500K at 24% |
Tax on Company On the first RM500K at 18% (SMEs) After RM500K at 24% |
| Rules & Regulations | Registration of Businesses Act 1956 (RBA) | Registration of Businesses Act 1956 (RBA) | Limited Liability Partnership Act 2012 (LLP), Limited Liability Partnership Regulations 2012 | Company Act 1965 (CA) |
| Advantages & Disadvantages | - Less paperwork & additional formalities (registration is easy, fast and fewer documents are needed) | - Less paperwork & additional formalities (registration is easy, fast and fewer documents are needed) | - Less paperwork & additional formalities (registration is easy, fast and fewer documents are needed) | - More paperwork & more expensive |
| Advantages & Disadvantages | - Unlimited liability | - Unlimited liability | - Limited liability | - Limited liability |
| Advantages & Disadvantages | - Simple administration (Not compulsory for statutory audit) | - Simple administration (Not compulsory for statutory audit) | - Simplest administration (Not compulsory for statutory audit) | - Complexity in administration (Statutory audit, AGM, board resolution and etc) |
| Advantages & Disadvantages | - Lower compliance cost | - Lower compliance cost | - Lower compliance cost | - Higher compliance cost |
| Advantages & Disadvantages | - Local resident compliance officer is required to setup LLP | - One local resident director are required to setup a company | ||
| Advantages & Disadvantages | - Suitable for newly start up business with low entry cost | - Suitable for newly start up business with low entry cost | - Suitable for newly start up business with low entry cost | - Suitable for business affordable to maintain business with higher operation cost |
| Advantages & Disadvantages | - Not required to disclose financial statements to the public | - Not required to disclose financial statements to the public | - Not required to disclose financial statements to the public | - Public will have access to financial affairs of the company |
| Advantages & Disadvantages | - Perpetual succession | |||
| Advantages & Disadvantages | - The changes status of the partners will not affect the existence of the LLP corporation |