Types of Business Ownership in Malaysia

1. Sole proprietorship
A sole proprietorship is one of the simplest type of company to set up.

2. Partnership
A partnership has two or more owners and a maximum of 20 owners.

3. Private limited company (Sdn Bhd)

A private limited company (Sendirian Berhad or Sdn Bhd) is a separate legal entity
from its owners, meaning that it can buy or sell property, enter legal contracts
and sue or get sued in courts.

4. Public limited company (Bhd)

A public limited company is similar to a private limited company, but the shares of
the public limited company can be offered to the public. Public limited companies
are usually listed on the stock exchange and is governed by the Securities
Commission of Malaysia.

5. Unlimited company (Sdn)

An unlimited company provides unlimited liability to the members and shareholders.
If there is any loss or the company is in debt, the members and shareholders will
be personally responsible.

6. Foreign company

7. Limited liability partnership

A limited liability partnership combines the characteristics of a partnership and a
company. It is a body corporate and is a separate legal entity from its partners.

Partnership
A partnership is a formal arrangement by two or more
a business and share its profits.
-A partnership is an arrangement between two or more
operations and share its profits and liabilities.
-In a general partnership company, all members share
-Professionals like doctors and lawyers often form a
-There may be tax benefits to a partnership compared
parties to manage and operate
people to oversee business
both profits and liabilities.
limited liability partnership.
to a corporation.

Sole Proprietorship
A sole proprietorship or sole trader is an unincorporated business with a single
owner who pays personal income tax on profits earned from the business.

-A sole proprietorship is an unincorporated business with only one owner who pays
personal income tax on profits earned.
-Sole proprietorships are easy to establish and dismantle, due to a lack of
government involvement, making them popular with small business owners and
contractors.
-Many sole proprietorships end up getting restructured into an LLC, in sync with
the company's expansion.
-One of the main disadvantages of sole proprietorships is that they do not have any
government protection as they are not registered. This means that all liabilities
extend from the business to the owner.
-To pay taxes, sole proprietors must fill out Form 1040 and Schedule C.

The advantages of a sole proprietorship include:

-Owners can establish a sole proprietorship instantly, easily and inexpensively.
-Sole proprietorships carry little, if any, ongoing formalities.
-A sole proprietor need not pay unemployment tax on himself or herself (although he
or she must pay unemployment tax on employees).
-Owners may freely mix business or personal assets.

The disadvantages of a sole proprietorship include:

-Owners are subject to unlimited personal liability for the debts, losses and
liabilities of the business.
-Owners cannot raise capital by selling an interest in the business.
-Sole proprietorships rarely survive the death or incapacity of their owners and so
do not retain value.