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BUSINESS ENTITY, TYPES OF BUSINESS ENTITIES MALAYSIA, 1 Owner, Easy and…
BUSINESS ENTITY
SOLE PROPRIETORSHIP
BENEFITS
LIMITATIONS
Private Limited Company (SDN. BHD.)
BENEFITS
LIMITATIONS
COOPERATIVES
BENEFITS
Co-owned and democratically controlled by members
Meeting shared economic/social needs
Seperate legal entity
Member profit/returns are usually limited
LIMITATIONS
Limited capital
Management problems if there is a lack of experience
Profit incentives may be low
Member cooperation can be disrupted by conflict
LIMITED LIABILITY PARTNERSHIP (LLP)
BENEFITS
At least 2 partners
Seperate legal entity
Partner liability is more protected
Business continuity continues
Suitable for SMEs, startups and joint ventures
LIMITATIONS
Not all parties understand or recognize LLP
Taxes and tax filing can be complicated
Credibility may be considered lower than that of the company
PARTNERSHIP
BENEFITS
2-20 partners (some professions can have more)
Capital, skills and responsibilities are shared
Results could be better
LIMITATIONS
Unlimited liability risk for general partnerships
There can be disagreements
Happy to share
TYPES OF BUSINESS ENTITIES MALAYSIA
1 Owner
Easy and cheap to register
The owner controls all decisions
100% of profits belong to the owner
Limited capital
Unlimited liability for business debts can involve personal assets
The business can stop if the owner dies/is unable to manage
Seperate legal entity
Shareholders are liable only to the extent of their shares
Easier to raise capital and grow
More complex set-up and compliance
Need company secretary and reporting requirement
Can't offer shares to the public