ENTREPRENEURSHIP

DPK20103
TOPIC55::BUSINESS
TOPIC BUSINESSRULES
RULES&&
SUPPORTS
SUPPORTS
 Lecture Content:

1. Business Formation In Malaysia

2. Rule & Regulation
3. Business Supports & Assistances
 Learning Outcomes:

1. Understand business entity govern to Malaysian

Law.
2. Understand rules and regulations need in Malaysia.
3. Identify strength and weakness in business entity
selection.
4. Be able to register business formation chosen.
5. Understand the business supports and assistances
needed.
 1. Forms of Business Entities In
Malaysia
Business can be register under any one of following act;

Act Business Types

Business Registration Act 1956
(Amendment 1978) and
Procedures of Business
Registration 1957
Company Act 1965
 Sole Proprietorship
 Partnership
 Limited Company by Guarantee
 Limited Company by Share
1. Private Limited Company
(Sendirian Berhad)
2. Public Limited Company
3. Foreign Owned Company
 Unlimited Company
 Forms of Business Entities In Malaysia
(continue)

Act Business Types

Cooperative Act 1948 Cooperative (Koperasi Guru, Koop
UTHM etc)

Parliamentary Act or GLC companies (Petronas, Proton,

SEDC etc)
State (Government)
Enactment
 BUSINESS ENTITY IN MALAYSIA
I Sole Proprietorship

Business
Registration Act Partnership

Limited Company by Private Limited (Sdn.

II Guarantee Bhd)
Company Act 1965 Public Company
Limited Company by
Share (Berhad)

III
Unlimited Company Foreign Owned
Cooperative Act Company
1948

IV
Parliamentary Act
& State
Government
Enactment
 Companies Commission of Malaysia (SSM)
State Address
Head Quarter Tingkat 2, 10-19 Putra Place
100 Jalan Putra
50622 Kuala Lumpur
Melaka Suruhanjaya Syarikat Malaysia (Negeri Melaka)
Aras Bawah Menara MITC, Kompleks MITC
Jalan Konvensyen, 75450 Air Keroh, Melaka
Perak Tingkat 2C, Greentown Mall
Jalan Hospital
30450 Ipoh, Perak
Kedah Tingkat 10, Menara Sentosa
Jalan Tuanku Ibrahim, 05621 Alor Setar
 SURUHANJAYA SYARIKAT MALAYSIA
(SSM)
State Address
Kelantan Tingkat 2,3&4, Kota Sri Mutiara
Jalan Sultan Yahya Petra, 15150 Kota Bharu
Terengganu Tingkat 6-7, Menara Yayasan Islam
Jalan Sultan Omar, 20300 Kuala Terengganu

Pulau Pinang Tingkat 6-7, Bangunan KWSP, No 3009

Off Leboh Tenggiri 2, Bandar Seberang Jaya
13700 P.Pinang
Pahang Lot 202-216, Tingkat 2, Block B
Kuantan Centre Point
Jalan Haji Abdul Rahman, 25000 Kuantan
Johor Podium 4B & 5, Menara Ansar
65, Jln Trus, 80000 Johor Bahru
 SURUHANJAYA SYARIKAT MALAYSIA
(SSM)
State Address
Perlis Tingkat 8, Bangunan KWSP
Jalan Bukit Lagi, 01000 Kangar
Selangor Tingkat 3 & 4, Plaza Alam Sentral
Jalan Majlis, Seksyen 14, 40000 Shah Alam
Negeri Sembilan Tingkat 2, Wisma Fook Loong
Jalan Dato’ Abdul Rahman
70000 Seremban
Sabah Tingkat 4, Menara MAA
6, Lorong Api-Api
88999 Kota Kinabalu
Sarawak Tingkat 2 & 3, Wisma STA
26, Jalan Datuk Abang Abdul Rahim
93450 Kuching
 1. Sole Proprietorship

Characteristics Advantages Disadvantages

1. Easy to register. 1. Small set-up cost 1. Limited source of capital
2. Own by one person. 2. Easy to manage/owner 2. Unlimited business liability
3. Simple business decision making 3. Business expansion depend
on owner capability
structure. example: 3. Easy to form and
4. Life span depend upon the
Tailor shops, Beauty dissolve
age and how efficiently
Salons, Restaurant, 4. All profit will go to the business management by
Mini markets (Retail owner owner
Sector) 5. Not subject too much
government rules &
regulations (Financial
statement doesn’t
required validity by
qualified auditor)
 2. Partnership
 Definition
 A person forms a partnership with one or more person (not
exceeding 20 persons) to carry out a business with a view to
making profits.
 On professional businesses number could be up to 50 persons.
 Partnership Establishment
 Based on Partnership Act 1961 (collectively called firm).
 Each partner consider the company representative and acts on
behalf of the company.
 Partnership formation can be verbal or written agreement.
Partnership Act as reference (Verbal agreement) .
 2. Partnership

Characteristics Advantages Disadvantages

1. 1< person <20 1. Easier to secure 1. Unlimited business
2. Professional < 50 financing assistance liabilities
3. Partners share the 2. Business 2. The life span depend on
capital, profits and losses management and the life span of the
4. According to section 6, risks, resources can partners
Partnership Act 1061: divided among
they are collectively
3. Misconduct or
partners unethical will happen if
called a firm
3. Ideas, talents and no ‘Letter of
skills can be pooled Agreement’ is being
together made
4. Income tax impose
on individual
partners (owners)
Registration Guide for Sole Proprietorship and
Partnership Business

 Business Establishment
 Notification Adjustment Business Information
 Business Dissolve (Terminate)
 Types of Business Registration/Procedures
Types of Objective Charges
Forms
Search for Propose name of business to be Free
Business Name register
An applicant can choose any name
suitable for the proposed business.
The name chosen must be totally in
either Malay or English so that it will
comply with the Business Registration.

Form A Registration of Business RM30

(Method B) For a partnership business, section
P.A.A -1A in the form needs to be
filled out by all partners.
For the business that uses
applicant’s name (Apply only
to sole proprietorship)
RM60.00
Business that uses names other
than the applicant’s name
RM 5.00
Service charge
 Types of Business Registration (continue)
Types of Objective Charges
Forms
Form A1 Certificate Renewal (Every Year) RM30.00
before expiry date. Sole Proprietorship
Fine: Up to RM50,000 or two years RM60.00
imprisonment Sole Proprietorship
Use Trade Name
RM60.00
Partnership
Form B Notification of change in business Registration for Form B is
registration (Name, address, RM20.00 for every
business types) within 30 days additional in business
activity and
RM5.00 for every
existing branch
 Types of Business Registration (continue)
Types of Objective Charges
Forms
Form C Notice of termination in business Free
Two copies of filled out form and sent to
SSM within 14 days of termination of the
business or 30 days from the date of the
death of the owner or partner Fails to
produce notice: Fine RM1,000 or 6
months imprisonment or both
Form D Certificate of Approval Registration.
Certificate need to display at business
premises. Failed: Fine up to RM200.00
 1. Business Registration
Search Business Name

Form A

Applicants’ Name
“Trade Name” no need SSM
SSM approval approval
Registration
Business fee

RM60.00- for Trade

RM30.00- sole
Name and partnership
proprietorship use
business
RM5.00- copies every applicants’ name
business information &
RM1.00 - every branch

Approval (Form D)
 Application being rejected:
 The applicant does use capital letter
 Application form is too dirty or untidy
 Corrections are made using ‘liquid eraser’
 The business is already registered, but the owner not
terminate existing business before applying the new
one
 Verification of application form has been made by
unauthorised personnel
 The applicant doesn’t attach a copy of licenses or
permit.
 2. Notification of Change Business
Information
Form B

Form B1 Form B2 Registration Form B3 Form B4

fee

Register of Register of RM20.00 for every Register of Register of

principal business business every branch owner
business types notification and information
address RM5.00 for every
branch
 Business Organization In Malaysia
(Companies Act 1965)

Private Limited Company

Characteristics Requirements
Membership Must have at least 2 members – Malaysian nationality, acts as
company director and founder.
The members of company will appoint the Board of Director.

Liabilities Limited to the total shares contributed.

Personal assets not affected, if any thing happens to the company.

Right and It can acquire assets under its own name.

Responsibility Take legal action and face legal action under its own name.

*Legal entity and its identity is separate from the identity of the company’s
members
 Business Organization In Malaysia
(Companies Act 1965) - continue
Private Limited Company

Life Span Not dependent upon the death or resignation of it members.

Dissolved when its members no longer interested.
 Business Organization In Malaysia
(Companies Act 1965) - continue
Private Limited Company
 Terms & Conditions
 Member not exceed 50 people.
 Transfer ownership of members’ share with the approval BOD.
 Not allowed to offer or sell any share or debenture to public.
 Not allowed to offer public to deposit money within stipulated time frame.
 Use the word “Sdn. Bhd.” atau “Sendirian Berhad” at the end of its
name.
 Business Organization In Malaysia
(Companies Act 1965) - continue
Private Limited Company
 Mechanism Pte Ltd
 Memorandum of Association
 Document which stipulates the powers and limitations of
the company.
 Articles of Association
 Document of articles relate to the internal management of
company’s affair.
 The Share Capital of Company
 Authorised capital : Maximum limit of the capital of a
company
 Paid up capital: actual share issued to the members
 Business Organization In Malaysia
(Companies Act 1965) - continue
Private Limited Company
Advantages Disadvantages
1. Funds easy acquire through exchange of 1. Subject to more rule &
share ownership or loan from financial regulations.
institution. 2. Shares can’t traded through
2. All shareholders are legally protected by share market.
law. 3. Must pay corporate tax.
3. Shareholders are not burden with mgmt 4. Qualified Auditors must audit
of business. yearly financial stat & stat
4. Liabilities limited to the capital complete, updated.
contribute to company. 5. Financial affairs must
5. Life span isn’t depend on age or transparent to public.
resignation its members. 6. Cost setting up is high.
6. Greater potential for expansion.
7. Legally, it one business entity by itself.
 Business Organization In Malaysia
(Companies Act 1965) - continue

Private Limited Company

 Members of Shareholders
 Board of Directors
 Secretary
 Auditors
 Registered Office
 Company Seal
 Authorisation Letter
 Private Limited Company
- Registration Procedure

Application to get approval

use the name suggested

1. Doc. MoA & MAA, Fee-RM30.00

(RM200 stamp 1st copy,
Form 13A
2nd copy RM20).
2. Form 6
3. Form 24
Approved name
If approved will be kept for 3
4. Form 44 (RM5 stamp
original copy,RM2 2nd
months
copy) Registeration
5. Form 48A
6. Form 49
Corporate Declaration
7. Registration fee
(Form 8 & 9)
8. Form 9
 Private Limited Company
- Registration Procedure
Forms required

Form 6 Form 24 Form 44 Form Form 49 Form 9

48A

Statutory Break Notice of Statutory Detailed Corporate

Declaration legal Declaration statement Declaration
down of
letter regarding business before by Certificate
shares
compliance on
allocated address appointment Director,
all rules &
regulations
as founder Manager,
or director Company
Secretary
 Private Limited Company
- Registration Procedure
 Registration Fee (Based in Authorised capital)

Authorised Capital Fee (RM)

Nominal share capital ≤RM100,000 1,000
> RM100,000 Nominal share capital ≤ RM500,000 3,000
> RM500,000 till ≤ RM1 juta 5,000
>RM1 juta till ≤ RM5 juta 8,000
>RM5 juta till ≤ RM 10 juta 10,000
> RM 10 juta till ≤ RM 25 juta 20,000
> RM 25 juta till ≤ RM 50 juta 40,000

> RM 50 juta till ≤ RM100 juta 50,000

> RM 100 juta 70,000

 
 2. Procedures & Legal Aspects
Licences
Business Local authorities

Wholesaling Sale in large quantities

Manufacturing Manufacture activities (MITI)

Licences >RM100,000 paid-up capital

Food manufacture Food processing – PBT/Health Dept.

Sales Tax Imported & local products exempted tax

Excise manufacture products subject to excise

tax (car, soft drink, cigarette)/addiional
to manufacturing licence
Procedures & Legal Aspects (continue)
Transportation – Apply to Commercial
Vehicles Board under MECD according to
different types: Taxis, school & factory
buses, lorry (A or C class)

Letter of Authority –
The cert. of fitness (CF)
issued by local
authorities
Foreign Workers –
Plantation sector, retail,
Permit construction need
approval from KSM &
meet rules Immigration
Dept.
 Procedures & Legal Aspects (continue)
 Assembling of Machinery & Equipment
 Factory and Machinery Act 1967 (Amended 1974),
provide workers’ safety, health and welfare at the
site installation of machinery and equipment

 Pollution Control
 The Quality Environmental Act for plant design,
layout and installation of pollution control.
 Procedures & Legal Aspects (continue)
 Business Rights
 Trademark Protection
 The Trademark Act protects from unhealthy business
practices (product imitation)
 Patent Protection
 The Patent Act 1983, provides registration of design
(apparatus, articles, tools, materials and composition.
Application to Registrar of Patents made through agents
registered with Office of Patent Registration, Ministry of
Domestic Trade & Consumer Affairs.
 Copyright
 The Copyright Act 1987, to protect businesses, writers,
composers and broadcasters in the area of literature, music,
art, sound recording and broadcast programs.
 Procedures & Legal Aspects (continue)
 Standards and Quality (SIRIM)
 Recognition to quality prod & services. Different types of
quality standards are given to business entities based on
products, system, services and environment management.
 Hire Purchase Act
 The Hire Purchase Act 1967 (Amended 978) – control the
forms and contents of hire purchase agreement.
 Assets covered
 Vehicles
 Radios, TV, cassette recorders or any combination of the items
 Refrigerators, freezers or combination of both
 Sewing machines or Air-Conditioners other than for industrial use
 Vacuum cleaners
 Gas, electric cookers and ovens
o Down payment (20%), balance finance companies on
installment basis
 Procedures & Legal Aspects (continue)
 Workers’ Social Needs
 Employee Provident Fund Act 1961 (KWSP) &
Workers Social and Safety Act 1991 (PERKESO).
 Infrastructure Needs
 Basic facilities & infrastructure (TNB, Telekom,
JBA)
 Import & Export Regulations
 Approved Permit (AP) from Ministry of International
Trade and Industry (MITI) and Royal Custom, Excise
Dept. etc.
 3. Business Supports In Malaysia

Courses, Seminars
& workshops Technical
Extension Services Assistance

Marketing
Assistance
Advisory Services
Entrepreneur
Infrastructure
Assistance

Financial Assistance
Information
Research &
Assistance
Development
 Business Supports (continue)
 Technical Assistant
 To expose production methods and systematic management.
Agencies involved such as SIRIM, MARA,Multimedia
Development Corporation S/B (MDeC), MARDI, RRIM,
MPOB ,FRIM, Jab. Pertanian and Jab Perkhidmatan Haiwan.
 Marketing Assistant
 Help entrepreneur distribute an market their products locally
or internationally. Agencies involved such as MITI,
MATRADE, FAMA, GUTHRIE.
 Infrastructure Assistant
 Getting business premises. Agencies involved such as
MARA, SEDC, SIRIM, UDA, KPLB, SME Bank dan MIDA
 Business Supports (continue)
 Information Assistance
 Business opportunities, statistics, new research findings,
technology research etc. MITI, MATRADE, MARDI, SIRIM,
MIDA, FRIM & IPTA
 Research and Development
 Project feasibility studies, market research and technology
related studies. MARDI, SIRIM, IPT.
 Financial Assistance
 Provide financing facilities to implement business ideas.
Commercial banks, merchant banks, licensed banks, related
governments such as MDec, SMIDEC (e–manufacturing ICT
grants scheme), SME bank.
 Business Supports (continue)
 Advisory Services
 Managing business training and consultation. Tax
deduction from HRDF, Ministry of Human
Resources.
 Training, Seminars and Workshops
 Consist of management training, efficiency, skills,
motivation etc. MEDEC, PUNB, MARA, MFA
(PFM), SEDC & Financial Institutions.
o Extension Services
 MDec, MEDEC, MITI, SIRIM, MATRADE,
MARDI, MPC to ensure implementation of proposed
projects (follow-up services).