A Sole Proprietorship is the simplest business entity to get started with if you are running your business alone at a small scale. You can register a Sole Proprietorship using your personal name at only RM30 or a trade name at RM60. The process of Sole Proprietorship registration has to be done on your own without going through a third party. As you are the only business owner, you bear all liabilities towards the business in your personal capacity and pays taxes through your personal income tax.

Who can Register Sole Proprietorship: Malaysians or permanent residents of Malaysia who want to start a small business alone.

Advantages: Cheaper to Register, Simple Registration Process and Lower Compliance.

A Partnership is a business entity that consists of at least 2 partners, with a limit of 20 partners. Similar to a sole proprietorship, partners of the partnership share the liabilities towards the business and pay taxes through personal income taxes. If your Partnership is sued by a customer, you and your partner(s) will be personally liable to any damages awarded by the court. This is a common business entity for professionals such as lawyers, accountants, company secretaries, doctors, etc.

Who can Register a Partnership: Malaysians or permanent residents of Malaysia who want to start a small business with business partners.

Advantages: Cheaper to Register, Simple Registration Process, Lower Compliance and Sharing of Losses in between the Partners and thereby reduce the burden.

Limited Liability Partnership (PLT.) registration is an alternative business vehicle under Limited Liability Partnerships Act 2012 which combined the characteristic of a company and a conventional partnership. Limited Liability Partnership (PLT.) is governed by Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) and Limited Liability Partnerships Act 2012. To register a Limited Liability Partnership (PLT.), a minimum 1 compliance officer (partner who is a citizen or permanent resident of Malaysia or company secretary qualified under Companies Act 1965) are required. It is also called as Perkongsian Liabiliti Terhad (PLT) in Malaysian Language.

Who can Register LLP: Malaysians or permanent residents of Malaysia who want to start a small business with business partners.

Advantages: No maximum limit on number of partners, relatively cheaper to setup and flexible agreement among the partners.

Private Limited Company (Sdn. Bhd.) registration is one of the popular legal business structure option in Malaysia. Private Limited Company (Sdn. Bhd) is governed by Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) and Companies Act 2016. To register a Private Limited Company (Sdn. Bhd.), a minimum 1 member (shareholder) and 1 director (ordinarily reside in Malaysia by having a principal place of residence in Malaysia) are required. A natural person can be both a director and shareholder, while a corporate legal entity can only be shareholder.

Who can Register Sdn Bhd Company: Anyone who wants to run a SME business in Malaysia. The only restriction is, at least 1 director has to reside in the country.

Advantages: Relatively cheaper to register, Simple Compliance, Limited Liability, Scaleup by increasing paid-up capital and issuing shares to investors and Can be 100% foreign owned.

A Company Limited by Guarantee is a public company without share capital for non-profit purposes. There are no shareholders, only members who act as guarantors to run the operation. You and other members do not contribute capital to the company but are responsible to pay debts if it closes down, according to the amount of guarantee as promised. Hence, it is unable to use its profits for purposes other than those stated as objectives in the constitution.

Who can Register CLG Company: Non-profit organisations.

Advantages: Does not require upfront capital contribution from members, It is the only business entity that can promote art, science, religion, charity and pension schemes and • It can apply to get exempted from paying corporate taxes.

You can register a Sdn company to form a mutual fund that holds assets for investment purposes, rather than to carry out business. Since it has unlimited liability among its shareholders, it is similar to a Partnership with more flexibility in the ownership of shares where shareholders are free to sell their shares back to the company.

Who can Register Sdn Company: Mutual Funds.

Advantages: It has flexible ownership of shares and can be Private or Public Limited.

Similar to a Sdn Bhd company, a Bhd company is a company limited by shares with a few differences – it can offer shares to the public without a limit on the number of shareholders, requires at least 2 directors and is governed by Bursa Malaysia Securities Berhad and the Security Commission of Malaysia. The registration of this business entity can be time-consuming and expensive due to strict compliance requirements. However, funding for the company would be easier to obtain since it is publicly listed on the market.

Who can Register Bhd Company: Entrepreneurs with large business models.

Advantages: Easier to raise funds as the company is listed and has flexible ownership of shares.

A Foreign Company is for non-Malaysians who have established businesses in other countries and want to set up a company branch in Malaysia for operation or customer service purposes. This allows foreigners to run businesses in Malaysia without having a director that resides in the country. Non-Malaysians who are not permanent residents have limited options in registering a business entity in Malaysia. You can only opt for either a Sdn Bhd company or a Foreign Company.

Who can Register a Foreign Company: Foreigners with established businesses in other countries who want to start a branch in Malaysia.

Advantages: Non-Malaysians can operate a business in Malaysia without a local director.