BUSINESS
or
COMPANY
There are many differences between a business and a company. Read on to find out what they are defined as, the differences and the risks involved.
BUSINESS
SOLE PROPRIETORSHIP (PEMILIKAN TUNGGAL)
You are in business alone. You are the owner.
You and the business are considered the same entity.
PARTNERSHIP (PERKONGSIAN)
You have a partner or partners in this business. Minimum of 2 owners and a maximum of 20 owners including yourself. You and your business partner(s), and the business are considered the same entity. The liabilities are the same for sole proprietorship and partnership. If the business has any debts, you and your partner(s), if you have any, are responsible for paying the debts. Your personal assets can be used to pay off the debts. Correspondingly, any income that you earn from the business is considered your personal income. Hence, your tax rates will be according to the personal income tax rates. Because you and the business is considered as the same entity, there is no perpetual succession. This means that if anything happens to you, the business cannot be handed over to your partner(s) or your family members.
COMPANY
PRIVATE LIMITED COMPANY (SENDIRIAN BERHAD)
You and the other owners are called shareholders. How many shares you own in the company is determined by how much you are investing and the value of each share. A company is its own entity and differs from the shareholders. A company is its own entity and differs from the shareholders. It is required to submit its Financial Statement, Audits and Annual Returns. Companies incorporated after 31 January 2017 are not required to hold an AGM.
LIMITED LIABILITY PARTNERSHIP (PERKONGSIAN LIABILITI TERHAD)
This is the middle ground between a sole proprietorship/partnership and a company. It was introduced in 2012 to encourage entrepreneurship, joint ventures and venture capitalism. It provides the benefits of a partnership but limited liability for the partners. Minimum of 2 partners and no maximum number of partners. An LLP is required to submit an Annual Declaration.
