Alright.. I decided to register my own company for some IT projects. But before I proceed to SSM, I would like to know some of the details, FYI, I will be registering sole proprietorship.

1) Do I need to report profit/loss on every year for tax, etc ??

2) Is there any difference between sole proprietorship and partnership (sdn bhd) other than the no. of owner ??

Thank you in advance, cheers!!

Sole proprietorship and partnership is the same category of business or business registration in nature.
Partnership is not equal to Sdn Bhd.
You need to declare profitability issue in a simple way, don't need accountant or auditor for that. Although most also employ accoutant to do, it is not a must. As long as you report your business profitability issue and pay tax accordingly then will be fine.

Sdn. Bhd. is different story, it is a limited company which need company secretarial, accountant and auditor to do the financial report properly and annually.

The owner of sole proprietorship (same for partnership) has higher risk than Sdn Bhd, as in Sdn Bhd, whatever personal asset has nothing to do with the company (that's why the word limited come from) but in sole proprietorship, personal asset can be part of it if the business has liability in it. That's the major difference.

Simple way,
Sole proprietorship/partnership - personal business
Sdn Bhd - company (personal issue not related)

Correct me if I am wrong. Just my swallow knowledge about it.

This post has been edited by cherroy: Dec 13 2007, 08:53 PM

Ya...agreed...

If u r doing some biz wip ur own power to control and nt going to pass to someone to "jaga" the biz...thn best way go for sole proprietorship or enterprise...

u can so ur own account n report profit got tax purpose in ur personal income tax-->most of thm din report d lar...hahaha~~n cheaper...jz apply a trading license for whole malaysia n lifetime and another RM25 yrly d duno wat name liao...damn easy...one day can come out..

sdn. bhd d...damn expenseve and u hv to keep track all ur payment voucher and receiving voucher and oso ur bank statement...for audit purpose...n veli complicated...need around few thousand to set up a sdn. bhd and oso apply a bank account wip company name...meaning tat sdn. bhd is a different entity ...

correct me if i am wrong..thanks

If you are starting out alone, it is best that you go for sole proprietorship. Partnership is not encourage unless your partner is someone you can trust (ie spouse, family members)

For Sdn Bhd, you also need pay company secretarial every quarter and submit your company tax every year. Prepare to set aside some money for all these hassle.

Me and my friends just had a laid back discussion few days back with one of my auditor friend.
Basically it's not a simple task to set up SDN BHD.
The by laws are basically stricter for SDN BHD which needs to have their account audited by a certified auditor firm annually and a report to be submitted back.
Whereas for Sole Proprietorship or Partneship, one just basically have to submit yearly form B to LHDN.

For SDN BHD, besides the annual audits; one is supposed to held an AGM and submit reports. Not only that, what I heard is; to end the company, one needs to have proper procedures and one of them is to declare in major papers that this so and so SDN BHD is ending their business and again, reports needs to be submitted back to SSM.

1) u need, but first few yr u just fill in loss... even u got profit... haha... they wont kacau u ....

2) partner ship is same with sole prop, just owner hv more than 1 ..... and renew fees is sligthy higher a bit....

SDN BHD is different story.. a lot process to set up... but it got more protection... example if u are sole prop or partnership, once u company own people money... u need to sell ur asset like house to pay back.... But sdn bhd is totally different... u own people 1m, no need pay back by ur own asset, but all the company asset will force to sell to payback, if not enough, bankrupt lo... a lot rich people do like this....

Alright... thanks for the tips.. will go to SSM register tomorrow, cheers~

anyone know the exact value to set up sdn bhd company?

I'm not really sure.
But my friend who works as an auditor advise us for small business, don't go through the hassle of registering under sdn bhd.
Anyway, the only myth I know is for sdn bhd; after declaring for bankruptcy.....it's the company which is liable and not directors. Anyone can clear up on this?....whether correct or not?

it need RM2+++ to set up a company

Well, if you really want to register your own company, it's a good start. For sole partnership, you will save up alot of troubles when summit income tax. If you have partnership, you need auditor to audit your company account..

If you have more than 2 partners in a company, you need to find auditor to audit your company account,.

In the stage of planning of running a small engineering consultancy business, anyone who can advice what's the pro and con of each company type? and the differences between them.


Thanks a million!


Regards

Enterprise or sole proprietor you don't need to submit your accounts to an auditor for taxation, while companies need audited accounts for submission.

Creditors can sue your pants if you're a sole prop, but as a company your liability is limited to that stated in your memorandum of association.

Normally it is better to register as a company if you intend to do a sizeable business as the tax reliefs are higher for companies than sole props.

And applying for Enterprice is hell much more easier and cheaper

I have an enterprise, about the taxations, do I have to calculate them myself ?

I recommend you to call LHDN's number which is stated in
http://www.hasil.gov.my

U can also find the details there...
Good luck!! Don't forget to pay your taxes ok?

Enterprise is one type of business organisation in Malaysia which is the formation bound by the Registration of Business Act. There are two type of enterprise – i.e. Sole Proprietorship and Partnership.

There is no legal status for the enterprise as it is one-man show business where the owner and the business considered as one entity. The enterprise is not liable to pay tax, as all income will be taxed personally to the owner.

However, to maintain the enterprise is easier and cheaper compared to company as there is no obligation to appoint secretary and to do audited account.

One of the main reason for remaining as a small business is because of limited source of fund. i.e. from the owner's saving or from the borrowings. That is why most people converting from running the enterprise to company because where there are more choices of getting the funds for the business.

Compared to enterprise, operation of business as a company giving more advantages as the owner of the company, i.e. the shareholders and the company are two different entities. That means the company also would be liable for all of the debts and it would not affected the shareholders at all. However, in the case of the company be wound up, he will only be liable for the unpaid shares to the company and if the shares are fully paid, then there is no obligation to contribute his personal assets to settle the company's debt.

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Added on February 12, 2009, 11:34 amfirst, you need to prepare a full set of accounts. thereafter could start to prepare the tax computation. and then only could fill uo ur Form B.

pls pm me if u need my help. thanks.


This post has been edited by kswong77: Feb 12 2009, 11:34 AM

Thank you all for the information, I have a clearer picture now. As my nature of business may have liability of hundreds of thousand, if not million potentially. So, I think S/B is the answer.

My other queries:
I will work from home at the beginning stage, how appropriate it is if your company registered is a residential address (No XX, Taman XXX etc?). And any other issues may arise that I should aware of?

I'm going to work alone, do ppl do that in Sdn Bhd, i.e. director-cum-secretary-cum-accountant? I aware I may need to engage with secretary and auditor, I understand why we need auditor, but what actually the secretary do?

thank you!

No problem if register the residential address as the principal place of business or registered office.

If wanna to set up SDN BHD, minimum required 2 directors, which r Malaysia resident.

director cum accountant is not a problem. R u a qualified co-secretary??? The responsibility of co-secretary is:

i) Strive for professional competency and at all times exhibit a high degree of skill and proficiency in the performance of the duties of his office;

ii) At all times exercise the utmost good faith and act both responsibly and honestly with reasonable care and due diligence in the exercise of his powers and the discharge of the duties of his office;

iii) At all times strive to assist the company towards its proper objectives within the tenets of moral responsibility, efficiency, and administrative effectiveness;

iv) Have a clear understanding of the aims and objectives of the company, and of the powers and restrictions as provided in the Memorandum and Articles of Association of the company;

v) Be knowledgeable of law of meetings, meeting procedures, particularly quorum requirements, voting procedures and proxy provisions and be responsible for the proper administration of meetings;

vi) Neither direct for his own advantage any business opportunity that the company is pursuing, nor may he use or disclose to any party any confidential information obtained by reason of his office for his own advantage or that of others;

vii) Adopt an objective and positive attitude and give full co-operation when dealing with governmental authorities and regulatory bodies;

viii) Disclose to the board of directors or an appropriate public officer any information within his knowledge that he honestly believe suggests that a fraud is being or is likely to be practised by the company or by any of its directors or employees;

ix) Limit his secretaryship of companies to a number in which he can best and fully devote his times and effectiveness;

x) Assist and advise the directors to ensure at all times that the company maintains an effective system of internal control, for keeping proper registers and accounting records;

xi) Be impartial in his dealings with shareholders, directors and without fear or favour, use his best endeavours to ensure that the directors and the company comply with the relevant legislations contractual obligations and other relevant requirements; and

xii) Be present in person or ensure that in his absence he is so represented at the company's registered office on the days and at the hours that the office is accessible to the public;

xiii) Advise the board of directors that no policy is adopted by the company that will antagonise or offend any stakeholders of the company;

xiv) Be aware of all reporting and other requirements imposed by the statute under which the company is incorporated; and

xv) Be present or represented at meetings and do not allow himself or his representative to be excluded or withdrawn from those meetings in a way that prejudices his professional responsibilities as secretary of company.

Dear kswong77, that's a very thorough explanation, thank you!

for sure, I am no where near to qualify to the requirement you mentioned, neither are the partners I can think of.

Are there part-time co-secretary or freelance co-secretary out there? To whom I can engage when required.


Regards