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Registration of Business Entities in Malaysia - Coggle Diagram
Registration of Business Entities in Malaysia
1- sole proprietorship
business owned, funded and managed by one person. Simplest and most popular form of business in Malaysia.
Disadvantages :
Capital limited strictly to the owner's ability
Direct personal liability for all debts
Lack of business continuity
Burden of self-employment taxes
Business Registration Act 1956
Advantages:
100% control of profits
Low cost of registration
Private business affairs
No audited accounts required by SSM
3- limited liability partnerships(LLP)
2012
Minimum 2 (No Maximum Limit)
Disadvantages:
Recognition
Additional taxes
Credibility
Advantages:
Inexpensive to registered (Rm500)
Separate legal identity & can owned property
Ease of compliance
combines features of a private limited company and a conventional partnership. It is a separate legal entity with perpetual succession and fewer reporting requirements.
five types of business entitie
3-
limited liability partnerships(LLP)
4-
private limited companies
1-
sole proprietorship
2-
partnership
5-
cooperative
5- cooperative
voluntarily members common economic, social and cultural needs through a jointly owned and democratically controlled business.
at least 100 members while a Farmers’ Cooperative requires 50.
Disadvantages:
Limited capital generation
Severe management problems
Lack of profit motivation limits effort
High friction/ego clashes
Extreme government dependence and direct interference/auditing
Advantages:
Easy formation for associations
Open membership
Democratic control
Elimination of middlemen's profit
High level of State assistance (grants, tax exemptions)
Limited (Unless fraud orloan guarantor)
Highly stable existence
Min 100 (Primary) or Min 50 (Farmers')
2- partnership
Owned by 2 to 20 people, or up to 50 members for certain professional businesses.
Advantages:
Pooled capital from multiple partners
Shared responsibility utilizing
Shared views ensure better decision-making
Private affairs: Flexible with no SSM audit requirement
Disadvantages:
Unlimited liability
High risk of friction, disagreements and disputes
Equal profit sharing if no formal agreement exists.
Taxed like a sole proprietorship.
Business Registration Act 1956
4-
private limited companies
1 to a maximum of 50 individuals
Advantages:
Limited liaability
Professional status
Organization structure systematic
Company continues even the member die
Legal entity is seperate & established under Companies Act
Disadvantages:
taxes need to be paid every year
winding-up procedures
High cost registration fees
Registration process & formalities
secrecy
A company is a separate legal entity from its owners formed by individuals who contribute capital to manage and expand the business.
Registration of the business
Corporate & Hybrid
For Sole Proprietorships,
Partnerships, LLPs, and Private
Limited Companies.
Visit: www.ssm.com.my
Social & Collective
For Primary and Farmers'
Cooperatives.
Visit: www.skm.com.my