BUSINESS

OWNERSHIP
Outline:

 Factors in selecting a business

ownership/entity
 Types of business entity
 Advantages and disadvantages of each

business entity
 Factors in Selecting a
Business Ownership

 Factors that influence the choice of entrepreneurial ownership:

 Capital (Modal)- how much money can you invest in the business. Sole proprietorship
needs lesser amount of capital compared to a private limited company.
 Personal Assets (Aset peribadi)- you may be using your personel assets if you choose
to open a sole proprietor business
 Span of Control (Jangkauan kawalan)- the number of subordinates controlled directly
by a superior. So the capability of controlling your immediate subordinate impacts the
decision of what type of business ownership you would like. It is related with the
structure of your business. Whether you are able to control your subordinate in a
complex business structure (corporation) or less formal structure (sole
proprietor/partnership)
 Sharing of Information (Perkongsian maklumat)- How much information you are
willing to share. For example if you choose to form a company (Corporation) you
must declare the company’s financial position to the Board of Directors of the
company. For a sole proprietorship it is not compulsory by the law for the owner to
declare its business financial position to anyone. In terms of taxation, the sole
proprietor pays personal income tax not business tax.
 Types of Business Ownership/
Legal form of business

 Sole Proprietorship (Pemilikan Tunggal)

 Partnership (Perkongsian)
 Corporation (Syarikat)
-Each differs in the procedures to form the business
and its’ management.
Sole Proprietor Sole Proprietor Partnership
• Own name • Trade name • Trade name
• Registration • Registration • Registration
Fee RM30 Fee RM60 Fee RM60

Single owner Single owner Owners between 2-20

 Sole Proprietorship
(Pemilikan Tunggal)
 The most common form of business organization.
 Owned and operated by one person (single owner)
 Example : FIRQA KITCHEN ENTERPRISE (Trade name)
 Very few legal requirements for setting up. Example: easy
business registration (at Suruhanjaya Syarikat Malaysia-SSM)
 Subject to Registration of Business Act 1956 (Tertakluk kepada
Akta Pendaftaran Perniagaan 1956). Business is defined as
any form of trade,
 Advantages of Sole Proprietorship:
 Ease of start/ end – easy to register, cheap registration
 Being own boss- freedom of choice/complete control
 Pride of Ownership- accept total responsibility
 Retain all profit
 No special taxes- Owner is taxed on personal income tax
 Fewer legal requirements- Example: Do not have to prepare audited
business account. Pay individual income tax, not business tax.
 Disadvantages of Sole Proprietorship:
 Unlimited liability- Owner’s Liability is not limited to the business loss only. Owners
personal assets can be claimed by the creditors to pay business debts (Harta
peribadi pemilik boleh dituntut oleh pemberi hutang untuk menjelaskan hutang
perniagaan)
 Limited financial resources- difficult to obtain loans from banks/financial institutions
 Time commitment-long working hours
 Limited growth-owner have limited skills, limited staff
 Limited life span- business operation depends on owner’s life span (operasi
perniagaan boleh diteruskan selama hayat pemilik. Jika pemilik meninggal dunia,
dari segi undang-undang perniagaan dianggap tamat. Waris tidak boleh
mengambil alih perniagaan secara automatik)
 Partnership (Perkongsian)

 Partnership:
 Example : Ghazi & Lim (Advocates & Solicitors) – Lawyer Firm
 Group of 2 – 20 people legally agree to become co-owners of a business.
 Each partner contributes capital.
 Each partner takes part in the running of business.
 Each partner gets a share of the profits.
 A Deed of Partnership/ Partnership Agreement (Perjanjian Perkongsian) sets out
the rights and responsibilities of the partners.
 Formed under Partnership Act 1961 (Ditubuhkan di bawah Akta Perkongsian
1961)
 General Partnership:
 All owners share in managing the business and in
assuming liability for the business’s debts.
 Limited Partnership:
 A partnership with one or more general partners and one
or more limited partners.
 Types of Business Ownership
(cont.)

General Limited

Passive Passive
GP Investor Investor
GP
GP GP

GP
Passive
Investor
 limited partner is a part-owner of a company whose
liability for the firm's debts cannot exceed the amount
that an individual invested in the company. Limited
partners are often called silent partners (passive
investor)

 A limited partner invests money in exchange for shares

in the partnership and has no day-to-day involvement
in the business.
 Advantages of Partnership:
 More financial resources
 Shared management with partners
 More capital sharing with partners
 Not required to prepare audited account
 No special taxes
 Easy and cheap to form- just like forming a sole
proprietorship
 Disadvantages of Partnership:
 Unlimited liability- creditors can claim from partners’ personal assets to
pay business debts .
 Sharing of profits among partners subject to Partnership Agreement
(example : 70% Partner 1, 30% Partner 2)
 Disagreements among partners
 Partnership is terminated if any partners quit, passed away or bankrupt.
 Limited financial resources- difficult to obtain loans from financial
institutions.
Corporation (Syarikat)

 Private Limited Company (Sendirian Berhad-

Sdn. Bhd.)
 Public Limited Company (Berhad)
 Corporation (Syarikat)

 Private Limited Company (Syarikat Sdn. Bhd./ Ltd.)- is a company limited

by shares. owned by 2-50 people.
 Example: Beryl's Chocolate & Confectionery Sdn. Bhd.
 Separate legal entity from owners (limited owners liability)
 Shareholders are the owners: they buy the shares in company.
 Shares sold to a small group of people, not through the stock exchange.
 Shareholders appoint directors to run the company.
 Subject to Company Act 1956 (Akta Syarikat 1956)
 Advantages of Private Limited Company:
 Shares can be sold to a large number of people.
 Limited liability: shareholders are not personally responsible for the
debts of the business. Owner’s personal assets cannot be claimed by
creditors to pay company’s debts.
 Company’s operation is not determined by shareholders life span.
 Easy to obtain funds/loans from financial institutions compared to sole
proprietor and partnership.
 Main shareholders can keep relative control of the company
 Disadvantages of Private Limited Company:
 Significant legal requirements when setting up. Need profesional service from
**Company Secretary (banyak keperluan undang-undang yang perlu di patuhi
sewaktu penubuhan syarikat- rumit. Perlukan khidmat **Setiausaha Syarikat)
** This is not the personal Office Secretary (Setiausaha Pejabat)
 Shares cannot be sold/ transferred without the agreement of other shareholders.
 Accounts are much less private than sole trader/ partnership. Financial accounts
must be declared to Board of Directors/Shareholders/LHDN-Lembaga Hasil
Dalam Negeri
 Cannot sell shares on stock exchange, therefore this limits expansion.

 High management cost because must appoint Directors, Company Secretary

and Auditors.
 Public Limited Company (Syarikat Berhad/ PLC)
 Example: Media Prima Berhad
 Suitable for very large businesses.
 Owned by private individuals: not government owned.
 Shares sold on the stock exchange (pasaran saham).
(Example: Bursa Malaysia)
 Advantages of Public Limited Company:
 Limited liability to shareholders.
 Continuity, should a shareholder die.
 Opportunity to raise very large sums of capital.
 No restrictions on buying, selling, and transfer of shares.
 Usually has high status.
 Disadvantages of Public Limited Company:
 Complicated and time consuming legal formalities in
setting up.
 More regulations and controls.
 Costly to sell shares to the public.
 Shareholders have little control over the running of the
company.
Business Registration
 Bermula 29 Januari 2021, SSM akan menguatkuasakan pengaktifan akaun pengguna EzBiz
Online melalui portal ezbiz.ssm.com.my bagi menggantikan proses pengaktifan akaun pengguna
melalui emel yang dilaksanakan pada masa ini di negeri-negeri yang diletakkan di bawah Perintah
Kawalan Pergerakan (PKP). 

 Para pengguna boleh merujuk ‘Tatacara Mendaftarkan Akaun Pengguna​’ melalui Sistem EzBiz
Online di portal rasmi SSM bagi memahami langkah-langkah yang perlu diambil untuk
mengaktifkan akaun pengguna melalui sistem EzBiz Online. 

 Untuk maklumat lanjut, sila hubungi Pusat Panggilan SSM melalui talian 03-7721 4000 atau e-
mel ke enquiry@ssm.com.my.

Suruhanjaya Syarikat Malaysia

29 Januari 2021