TYPES OF BUSINESS ORGANIZATIONS IN MALAYSIA

1. COMPANY

1.1. Name Appearance: Private (Sdn.Bhd.), Public (Bhd.)

1.2. Capital Contribution: By shareholders through purchase of shares

1.3. Owner of the Business: Shareholders

1.4. Legal Status: separate legal entity

1.5. Number of owners: No limit of members

1.6. Borrowing Power: Has more avenues to borrow fund

1.7. Liability : Limited liability

1.8. Dissolution: Only through the process of law

1.9. Regulation : Companies Act 2016

1.10. Management & Control : By board of directors elected by shareholders

1.11. Procedures: More cumbersome and difficult to incorporate

2. PARTNERSHIP

2.1. Name Appearance: Associate/Partners

2.2. Capital Contribution: Following agreement or by Patnership Act 1961

2.3. Owner of the Business: Partners

2.4. Legal Status: Not a separate legal entity

2.5. Number of owners: Normal (Min 2, Max 20) Professional (Min 2, Max 50)

2.6. Borrowing Power: Cannot create floating charge

2.7. Liability : Unlimited liability

2.8. Dissolution: Dissolve in the event of death or bankruptcy (Section 34-37)

2.9. Regulation : Partnership Act 1961

2.10. Management & Control : By patners or a board decided by the partners

2.11. Books & Accounts : Less publicity and lower costs incurred

3. SOLE PROPRIETORSHIP

3.1. Name Appearance: Enterprise

3.2. Capital Contribution: By Sole Proprietor

3.3. Owner of the Business: Sole Proprietor

3.4. Legal Status: Not a separate legal entity

3.5. Number of owners: 1

3.6. Borrowing Power: Unrestricted

3.7. Liability : Unlimited liability

3.8. Regulation : Register under Registration of Business Act 1956 (SSM)

3.9. Management & Control : Under full control of owner

3.10. Procedures : No hassle legal process, easy to be incorporated

3.11. Dissolution: Dissolve when the owner dies