There is absolutely no doubt that the business structure that you choose here in Malaysia can dictate whether you’re going to be successful or not. The business structure will influence many things, including how you operate from day to day, how much tax you have to pay to the Malaysian government, and whether or not you are afforded protection when it comes to your personal assets. It’s all about finding balance when it comes to enjoying the business benefits, but also protecting what is yours.
There are many different types of business entities in Malaysia, and people choose their business structure based on many different things. Depending on which one you choose, it may make it easier or more difficult to raise money with various financial institutions. It will also change the type and amount of paperwork that has to be submitted to the relevant government departments. If this has left you in some kind of quandary, but you would like to know about the types of business entities that are currently available to you, please continue to read.
- You could be a sole trader – This is one of the more popular businesses that people choose, and it provides certain advantages and disadvantages as well. It is very easy to set up, and you have 100% control of your business. The thing to remember, however, is that business assets and personal assets are not separated here. If your business doesn’t go as planned and you run into financial difficulties, the courts may force you to sell your personal assets to pay money that is owed.
- Part of a partnership – This usually involves two or more people getting together to form a business. Generally speaking, there are two kinds of partnerships, and one has a limited partnership and the other has a limited liability partnership. This is generally a good choice for any business that has more than one owner, and it is a great way to try to figure out if a business idea is going to work or not.
- A limited liability company – This is referred to as an LLC, and it allows you to enjoy the benefits of being a corporation, but also being part of a partnership business. The most important thing is that it does give you protection against personal liability in most cases. This means that your home, your car and any savings that you have in your accounts will not be at risk if your business runs into future financial problems.
We haven’t even covered setting up a corporation yet, and this is something that is completely separate in a legal context from the people who own it. It offers fantastic protection when it comes to personal liability, but setting it up costs a lot of time and money. The thing to always keep in the back of your mind is the rules, the liabilities, the taxes that have to be paid, and government requirements with regard to paperwork.
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