Hi all, a few questions on setting up a sole prop online through SSM EzBiz https://ezbiz.ssm.com.my/

1. Does it make sense to start a sole-prop if I currently make under RM500 in side hustle income every month in addition to normal employment income?

2. Are there any disadvantages to having a sole prop even when there is zero business income? as in the sole prop is dormant. Per my understanding, it seems that the only disadvantage is the yearly renewal fee. Otherwise, advantages include being able to claim Capital Expenditure on purchased business assets (Computer Equipment, Phone, mv, etc)

3. If I register a sole-prop under my name. Will I be able to add a trade name later on? and if there are any invoices billed out, can I both use my name and trade name interchangeably?

4. If I open an SME bank account to receive the side income, is this money considered mine to be used as if it were my personal income, or it is considered company money that I need to pay back?

5. As a sole prop, do I need to prepare actual financial statements? I ask because there are sections to input business losses and p&l/bs items in Borang B, but per my understanding, a sole prop isn't an actual company like an sdn bhd.

6. If I don't need to prepare accounts, then those sections in Borang B will be left blank?

7. Without financial statements, can I still claim Capital Allowance on purchase of equipment? Say I purchase a laptop and phone for business use, do I just keep the purchase invoice/receipt and input 40% of the purchase price into Borang B as a deductible.

8. How would other expenses like Utilities, Petrol, Parking, Entertainment be recorded? just keep the receipts, total together in excel and claim a percentage?

9. If I receive USD in a personal multi currency account and only remit a portion of it back to MYR to my sole prop SME bank account, do I need to prepare any special documentation? or It is enough to just have both bank statements and an excel sheet with the foreign calculation of the USD amount received.?

Thank you all

Sole-prob regardless your name or trade name is still under your name. Any lawsuits to a sole-prob, u will kena.

If Sdn Bhd or LLC then is not yours. If kena sue, only the company is affected.

Too many questions. I can only answer when I am free at night.

1. In my opinion, it's not worth the hassle of setting up a sole proprietorship if side income is on the lower end, unless you have a lot of business expenses that you want to claim. Can just declare it under Borang BE under other income.

2. With sole proprietorship, you'll have to do proper book keeping and deal with CP500 (it's like PCB but for businesses).

3. Not sure, but you get to choose either one during registration. Trade name costs a little more per year.

4. Company money but you can do withdrawal to personal account (on record of course)

5. Yes

1. All business activities in Malaysia must be done with a valid business registration. Sell roadside nasi lemak, or give tuition, or supply small parts to company, or just drop-shipping online must have business registration. I make no comment on whether it is enforced. This is the law under Registration of Business Act 1956 Sec 5(1), sec 12(1)(a). Don't listen to "opinions" for this, BUT you have the information, and you decide based on the information and then live with it.

2-9. The business is you and you are the business. No matter which account the money is deposited, it is all counted during tax time.
Yes, capex and expenditure like buying materials can claim as business expense.
No, cannot have a trade name later. From what I understand must close one and open the other. (I may be wrong though)
If you have small business, but always losses, (my friend in financial industry told me, I cannot say true or not) the system will flag for audit. Must have small profit at least, otherwise why you running the side business if always losses?
Yes, financial statements not required to be submitted, but you still need internal accounts so you can fill in the tax form. Must keep receipts for 7 years. Must be able to prove the figures if/when audit.

Source - Own self is employee, but also have sole-prop business since 1996 and fill in tax form every year. This is what I have been doing as I understand it, but maybe wrong also so just be aware.

If you don't have a business registration, then you will not be able to open a bank account. You could receive money in your personal bank account, but the bank may flag it if there are many deposits all the time. Think of it this way : Your salary is RM 5,000 and you have side business income of RM 500. You can treat it as if you have a salary of RM 5,500 and spend it any way you want.

So you'll be taxed as if you have a salary of RM 5,500, just that it is summed up as "salary" and "business income".

1. Any type of business needs to be registered if there's profit to be made by law.

2. No downside except the RM70-ish yearly renewal fee.

3. Need to decide on the name upon registration if not mistaken. Not interchangeable (although legal & tax-wise you're the same entity).

4. That's up to your internal bookkeeping. Recommend splitting them up from the beginning since it's a hassle to filter out business & non-business transaction of 'shared' account.

5. Yes best to prepare, cause you'll need it for tax declaration at LHDN eventually. Don't need to be audited, but atleast have some resemblance of a proper one.