The most common types of business organisation in Malaysia are as follow :
Limited Company
Limited Liability Partnership
Conventional Partnership
Sole Proprietorship
Ownership
One or more
Two or more (but not more than 20) individual
Two or more parties
One
Words ended at the end of name registered
“Sdn Bhd” or “Sendirian Berhad” or “Bhd” or “Berhad”
“PLT” (Perkongsian Liabiliti Terhad)
No specific word
No specific word
Capital Contribution
Shareholders contribution
Partners contribution
Partners contribution
Self contribution
Owners of the business
Shareholders or Members who own ‘shares’ and entitle to certain rights in the Company
Partners who have contributed capital
Partners
Sole Proprietor
Legal Status
Separate legal entity
Separate legal entity
No separate legal entity status
No separate legal entity status
Party that is liable for debts of the business
Company
LLP
Partners
Sole Proprietor
Management of business
Board of Directors
Partners
Partners
Sole Proprietor
Personal liability
personal liability. Liabilities borne by directors or shareholders are to the extent of unpaid shares only.
No personal liability of partner, except for own wrongful act or omission or without authority. Liabilities borne by partners are jointly and severally with the LLP to the extent of unpaid share capital only.
Unlimited liability (jointly and severally liable with the partnership) which can extend to personal assets of the partners.
Unlimited liability which can extend to personal assets of the sole proprietor.
Limitation of Liability
Limited
Limited
Unlimited
Unlimited
Profit sharing
Follow shareholding proportion in the Company
Specify in LLP Partnership Agreement
Specify in Partnership Agreement
Entitled to all profit
No. of Shareholders/Partners
Minimum 1 and maximum 50 for private limited company
Minimum 2 and no maximum limit
Minimum 2 to 20 partners (Except for partnerships for professional practice with no maximum limit)
Only one
Requirement of Company Secretary / Compliance officer
Acting by qualified/licensed Company Secretary under the Law
Acting by one or more Partners or qualified / licensed Company Secretary under the Law
Not required
Not required
Audit Requirement
Accounts required to be audited
Not mandatory unless stated in partnership agreement
Not required
Not required
Yearly Compliance to CCM
Must circulate audited financial statement to shareholders.Mandatory to lodge annual return every anniversary date of company and audited financial statements within 6 from the financial year end to SSM
Mandatory to lodge an Annual Declaration and solvency statement within 90 days from the financial year end
Not required
Not required
Renewal of License
Not required
Not required
Mandatory
Mandatory
Annual Filing Fee to SSM
RM150.00 for Annual Return
RM50.00 for Audited Financial Statements
RM200.00
Trade Name – RM60.00 per year
Personal Name – RM30.00 per year
Trade Name – RM60.00 per year
Personal Name – RM30.00 per year
Income Tax Status
Tax on Company
Tax on LLP
Tax on Partners
Tax on Sole Proprietor
Income Tax Rate
*Year Assessment 2016 (Subject to change yearly)
19% on the first RM500K profit (applicable for Small and Medium Sized Enterprise) and 24% on the remaining balance of profit.
19% on the first RM500K profit (applicable for Small and Medium Sized Enterprise) and24% on the remaining balance of profit.
From 0% to 28%
From 0% to 28%
Controlling Law
Companies Act 2016 & Companies Regulations 2017
Limited Liability Partnerships Act 2012 & Limited Liability Partnerships Regulations 2012
Registration of Businesses Act 1956 & Registration of Businesses Rules 1957
Registration of Businesses Act 1956 & Registration of Businesses Rules 1957
Succession
Perpetual succession
Perpetual succession
No perpetual succession
No perpetual succession
Formation
Lots paperwork and more expensive
Fewer paperwork and formalities
Less paperwork and formalities
Less paperwork and formalities
Administration
A bit complex
Simple
Simple
Simple
