Please enable JavaScript.
Coggle requires JavaScript to display documents.
TYPES OF BUSINESS AND THEIR DIFFERENCES
i. SOLE PROPRIETORSHIP
ii.…
TYPES OF BUSINESS AND THEIR DIFFERENCES
i. SOLE PROPRIETORSHIP
ii. PARTNERSHIP
iii. PRIVATE LIMITED COMPANY
NUMBERS OF OWNERS
-
PARTNER SHIP
Minimum 2 individual partners, maximum 20
PRIVATE LIMITED COMPANY
Minimum 2 members, maximum 50 (but allows another company to wholly own 100% of the private company).
STARTUP COSTS
-
-
PRIVATE LIMITED COMPANY
Higher – incorporation fee costs about RM2,500.
ANNUAL OPERATING COST
SOLE PROPRIETORSHIP
Low – business renewal, tax and accounting fees.
PARTNERSHIP
Low – business renewal, tax and accounting fees.
PRIVATE LIMIED COMPANY
Higher – accounting, audit, tax and secretarial services fees as well as annual filing fees.
-
-
OWNER'S LIABILITY
-
PARTNERSHIP
Unlimited liability (jointly and severally liable with the partnership) which can extend to personal assets of the partners.
PRIVATE LIMITED COMPANY
Limited liability – shareholders are not personally liable for the company debts.
Liabilities borne by the shareholders are to the extent of unpaid shares only.
LIFE OF BUSINESS
-
PARTNERSHIP
Death or bankruptcy of a partner will result in dissolution of the partnership (except otherwise provided in a partnership agreement)
PRIVATE LIMITED COMPANY
Death or bankruptcy of a shareholder will not affect the continuity of the business.
ADVANTAGES
SOLE PROPRIETORSHIP
The sole proprietor has complete control and decision-making power over the business.
PARTNERSHIP
Partnering with someone can give you access to a wider range of expertise for different parts of your business.
PRIVATE LIMITED COMPANY
If the company undergoes financial distress because of whatsoever reasons, the personal assets of members will not be used to pay the debts of the Company as the liability of the person is limited.
DISADVANTAGES
SOLE PROPRIETORSHIP
While having complete control is a benefit, the sole proprietor alone is responsible for the successes and failures of the business, which can add an extra layer of pressure and stress.
-
PRIVATE LIMITED COMPANY
are legally restricted from issuing their shares through an initial public offering. As such, they cannot trade their shares on a stock exchange.
GOVERNING LAW
PRIVATE LIMITED COMPANY
Governed by Companies Act 1965 (“CA”) therefore subject to stricter regulations.
-
-
-