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Register your Business
First step to turn dream into reality

There are more than an option for the type of business entity, if you decided to embark on any particular business. In Malaysia, a business usually can be operated in either of three (3) forms:

  1. Sole Proprietorship
  2. Partnership
  3. Limited Company (for this option please refer to Incorporate your Company)


It is a simplest form of business organisation. Its legislative control under Registration of Business Act, 1956. Registration is open for Malaysian and Permanent resident only.

Apparently, it is owned by one person, but it may be operated more than that person alone. Thus, a sole trader enterprise may have a large number of employees other than a proprietor.

It is a best option, if you are to start a business with your own working capital. However, there are advantages and limitations running this type of company. We suggest you to study the legal implications by comparing it with other two types of entity, before you make the final decision.

Advantages of Sole Proprietorship

  • As a sole owner, you have absolute freedom in decision-making
  • All the company gains are yours, and at your disposal
  • No Audit is required, but accounts report should have prepared for tax return purposes
  • Profit derives from business to be declared under Personal Income Tax

Limitations of Sole Proprietorship

  • As a sole trader, you are to responsible for the debts and business risks on your own
  • Your liabilities for any losses incurred by the business is unlimited
  • Legally, risks and failures in the business may implicate your personal property
  • Your sole expertise and funds may be limited for an rapid expansion


Like a Sole Proprietorship, only Malaysians and Permanent residents at the age of 18 above are eligible to register as partners in an enterprise. Partnership must comprise at least two (2) members to the maximum of twenty(20) members.

A partnership occurs when you decide to pool capital or combine expertises. In this form of business, you and your partners are joint-owners of the business, and therefore all the business profits and risks will be shared among the partners.

There are also advantages and limitations if you running this type of business. Do carefully study the implications of pros and cons before deciding this business form as your option.

Advantages of Partnership

  • More capital resources and expertises as a whole to grow the business
  • Business risks can be distributed and shared among partners

Limitations of Partnership

  • All partners carry the same and unlimited liabilities, therefore you are liable the risks and debts of business even if it is caused by your partners. Each partner may use their private resources to meet partnership's debts.
  • Disagreements and disputes may occur among partners, it may lead to the business operation be disrupted.
  • A partnership's lifespan is limited - it may come to an end if any one of the partners has mental disorder, falls bankrupt, or dies.
  • All matters under partnership business are under the governance of Partnership Act, 1961 unless otherwise a formal Partnership Agreement had been drawn up for setting up the rights or obligations of each partner.

Both Sole Proprietorship and Partnership businesses are under the jurisdiction of the Registrar of Business - Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) and Ministry of the Domestic Trade and Consumers Affairs.


We welcome you becoming our client in Corporate Secretarial Division for a huge success.


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