Convert Enterprise (sole-proprietorship/partnership) to Sdn Bhd Explained. Part 1

Convert Enterprise (sole-proprietorship/partnership) to Sdn Bhd Explained. Part 1

Today we explain the difference between Enterprise and Sdn Bhd comprehensively.

1. Board of director

• Enterprise : Not required

• Sdn Bhd : Must have at least one (1) director

2. Liability

• Enterprise : The owner/partner(s) has unlimited liability and has to take risk in any loss of business fails

• Sdn Bhd : The shareholder(s) has limited liability. Company becomes separate entity

3. Tax Rate

• Enterprise : Tax rate for individual income tax between 0% to 30%

• Sdn Bhd : Annual gross business income not more than RM50 million and paid up ordinary share capital on or less RM2.5million, the tax rate is 17% for first 600K,24% for remaining.

4. Law

• Enterprise : Regulated under the Business Act 1956

• Sdn Bhd : Regulated under the Company Act 2016

5. Chargeable person

• Enterprise : The person is a chargeable person under tax.

• Sdn Bhd : The company is a chargeable person under tax.

6. Business Management

• Enterprise : The owner/partner(s) is to manage and run the business.

• Sdn Bhd : The board of director is to manage and run the business

7. Number of shareholder/owner/partner

• Enterprise : Sole proprietorship – at least one (1) owner. Partnership – at least two (2) to twenty (20) partners

• Sdn Bhd : At least one (1) to fifty (50) shareholders

8. Company secretary

• Enterprise : Not required

• Sdn Bhd : At least one (1) qualified company secretary

9. Statutory Audit Requirement

• Enterprise : Not required

• Sdn Bhd : Yes. Compulsory

10. Annual Compliance

• Enterprise : Not required

• Sdn Bhd : Yes. Compulsory to submit annual return and audited financial statement

11. Register Office and Statutory Records

• Enterprise : Required to keep accounting books and records at the place of business

• Sdn Bhd : Required to have a registered office within Malaysia which all correspondences & notices may be addressed. Required to keep registers.

12. Income Tax Position

• Enterprise : Tax on person either the owner or partner(s)

• Sdn Bhd : Tax on the company.

13. Public Access to Company Financial Situation

• Enterprise : No need to disclose.

• Sdn Bhd : Public can access to the financial performance & position of the company

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