There are three main types of registered business models in Malaysia, which are private limited company (Sendirian Berhad), limited liability partnerships (LLP) and sole proprietorship/partnerships. Do friends who want to start a business see Sdn.Bhd, LLP, etc. feel confused? In fact, it is not difficult to understand! Let’s take a look at the introduction of each business model, the differences and how to choose!
▼ Private Limited Company (Sendirian Berhad/ Sdn Bhd)
Company (Sdn.Bhd.) is a business model registered under the Companies Act of 2016, in which companies are divided into three types:
- Stock-based company
- Companies with a guarantor as the limit
- Unlimited company
The legal responsibilities of the company and the shareholders are separated. For example, if the company is sued, the names of the shareholders will not be involved. This is also the business model that expats often choose in Malaysia.
▼ Limited Liability of Partnership (LLP)
A limited partnership is a business model under the Limited Liability Partnership Act 2012. This form combines the characteristics of a partnership and a limited company. The characteristic of a limited partnership is that the partners can be given limited liability without following accounting standards.
▼ Sole Proprietorship/Partnership
Sole proprietorship is an enterprise owned by an individual. Partnership is a common business model in Malaysia and requires two partners (Malaysian citizens) who are at least 18 years old to establish.
▼ Differences
▼ Pros and Cons
▼ How to Choose
Private Limited Company (Sendirian Berhad/ Sdn Bhd)
- High risk business
- Businesses involving mostly investors
- Long-term business
- Foreigner
Limited Liability of Partnership (LLP)
- Suitable for small and medium enterprises
- High risk business
- Foreigner
Sole Proprietorship/Partnership
- Young entrepreneurs
- Transient business
- Low-risk business
▼ How to Apply
Application steps for Private Limited Company (Sendirian Berhad/ Sdn Bhd)
- Provide the name of the enterprise, the nature of the business, the address of the registered office, the name and details of the partners, the name and details of the compliance officer, and the approval letter of the professional body (if any).
- SSM will issue a registration certificate if successful.
Application steps for Sole proprietorship /Partnership
- Bring a copy of your ID card to the nearby company committee and fill out the business registration form.
- The SSM officer will check if your proposed business name can be used.
- An annual fee is required after confirming all the details.
- The enterprise registration certificate can be obtained at SSM within one hour of payment.
