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Business Entity and Classification of Company - Coggle Diagram
Business Entity and Classification of Company
Sole Proprietorship
Not a separate legal entity
Unlimited liablity exist, and owner should liable for all the business debts
Less regulated because do not have specific rules for this
Only a trading license is required
Section 8 prohibits him from enforcing business contracts he formed or engaged into. However, can be sued and must fulfil his contract responsibilities.
Limited Partnership
Types of Partners
Limited Partner
Limited partners have limited business debt liability. If they have paid their partnership agreement contributions, they are not liable for offshore limited partnership debts or obligations.
General Partner
Manage the firms
available in Labuan only
Partnership
Not a separate legal entity
Joint-entity holder with two or more persons carrying out a
legal business in Malaysia.
A business partnership with the agreement that earnings will be shared.
The law of partnership governed by the Partnership Act 1961
Registration
Sarawak
Sarawak Cap.64 and Cap.33
Peninsular
Registration of Business Act 1956
Company
Section 2 defines company as a company incorporated under the Companies Act 2016 or any relevant former law.
Since it has a personality, the company can contract. Its name can be sued and sued.
Separate legal entity
Classification of Company
Public Company
Public company must hold AGM
Bursa Malaysia Securities Berhad only lists public firms having share capital.
Public companies must disclose related party transactions, important shareholders, director service contracts, and more.
Unlimited Company
Section 10(4): an unlimited liability company.
Share capital is optional. If there is no share capital in the constitution, members are responsible for all corporate obligations and liabilities.
Section 11(3): limitless companies must be private or public.
Section 435(3): any director, past or present, whose responsibility is limitless shall be responsible to make further contribution as if he were a member of an unlimited business in addition to his regular member liability.
Private Company
Private companies can convene AGMs under their constitutions.
Private business members' meetings may have more prepared resolutions and fewer disclosures.
Section 42(2) : A private company shall restrict the transfer of its shares.
Section 42(1): A company limited by shares having not more than fifty
shareholders may be registered as a private company.
Section 43 (1): Private companies are prohibited to offer shares or debentures or invite to deposit money.
Limited Company
Limited By Shares
Section 10(2): the liability of its members is limited to the amount, if any, unpaid on shares held by the members.
Companies whose members' liability is restricted by their unpaid shares.
Limited Both By Shares and Guarantee
Section 12: no company shall be formed as, or become, a
company limited by guarantee with a share capital.
Limited By Guarantee
Companies whose members' liability is restricted by their unpaid shares.
This type of company promotes charity or other community-beneficial activities without profiting.
Exempt Private Company
An exempt private corporation must use "Sendirian Berhad" or "Sdn. Bhd."
Section 2: a private firm with no benefit interest in its shares and no more than twenty members, none of whom are corporations.
Holding and Subsidiary Companies
According to Section 4(1), a business is only a subsidiary of another business (sometimes known as its holding company) if:
a) The parent company chooses the subsidiary board.
c) The holding company owns over half of the subsidiary's share capital.
b) The controlling company controls over half the subsidiary's voting power.
d) Any corporation that is a subsidiary of the holding company owns the subsidiary firm.
Section 6: If it has no members other than:
(b) A wholly-owned subsidiary of that other corporation or its nominee.
(a) That other corporation of its nominee
Foreign Company
Incorporated outside Malaysia but registered under CA 2016 in Malaysia
Foreign companies wanting to do business in Malaysia must submit documentation and a fee to the ROC.
.
The Registrar then registers the company and paperwork. It must have a Malaysian registered office
Comply with Section 561-579 of Company Act 2016.
Limited Liability Partnership
LLPs are hybrid businesses governed by the Limited Liability Partnerships Act 2012.
LLP has unlimited capacity, can sue and be sued in its own name, own assets, and do other things bodies corporate can legally do.
LLPs have perpetual successions, thus changes to their partners will not impact their existence, rights, or obligations.
LLPs have perpetual successions, therefore partner changes do not affect their existence, rights, or liabilities.