Nov 16 2009, 02:02 PM
QUOTE(D-Tourist @ Nov 3 2009, 11:41 PM)
1) given the size of ur business, it better to operate under sdn. bhd. both for future branding, expansion and tax savings. Furthermore, sole prop business tends to attract more detail tax audit and thus increasing ur tax risks. Furthermore, having a sdn. bhd. entity will allow for continuation of you business by fellow shareholders / directors (family members) whereas under sole prop, ur business ends if anything unfortunate happens to the proprietor becoz ur family won't be able to use the same business name (ur branding).
2) obtain a service of a qualified tax agent to do some tax planning for you.
3) no you are not exempted.
4) application for MSC status requires a service of a tax professsional which would check up whether u meet the requirement for MSC status
5) main disadvantages is u need to pay for tax, audit & secretarial services and if u wanna close ur business, u also need to pay for winding up / striking off. then again, these are negligible given the size of ur business. On the other hand, you would have these professional accountants to consult on business matters. often businessman are not familiar with certain compliance requirement and tend to result in the business having to pay penalties for non-compliances.
nowsaday the LHDN are very concern over sole proprietor and partnership because in practice, many of these business account are not properly kept and maintained as compared to Sdn Bhd. For payment of salary to relative, the LHDN are also very strict as to the type of job scope involved. if you have a proper accounting system with all documents properly kept, partnership is better with income evenly split over partners with lower tax rate. Otherwise, a Sdn Bhd is still better if your company is expanding. Sdn Bhd tax rate is only at 20% on first RM500,000 whereas sole proprietor is at 27%. But of course, for Sdn Bhd, you have to incur secretary fee, audit and tax fee.2) obtain a service of a qualified tax agent to do some tax planning for you.
3) no you are not exempted.
4) application for MSC status requires a service of a tax professsional which would check up whether u meet the requirement for MSC status
5) main disadvantages is u need to pay for tax, audit & secretarial services and if u wanna close ur business, u also need to pay for winding up / striking off. then again, these are negligible given the size of ur business. On the other hand, you would have these professional accountants to consult on business matters. often businessman are not familiar with certain compliance requirement and tend to result in the business having to pay penalties for non-compliances.
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