The differences between Sole Proprietor/ Partnerships/ Enterprise/ LLP vs Sdn. Bhd. (Company Incorporation)

Description:                        Sole Prop/ Partnership/Ent/ LLP .                    Sdn. Bhd.

Start Up Cost                     RM 60.00 to apply license from SSM                RM 2,100.00++ incorp fees

LLP's start up cost            RM 500.00 to register for LLP                            N/A

Business Start Date          Immediately after registration from SSM         1 day after company incorp

Liability                               Partners/ Owners/ CO                                          Company                                                                                                                            

Annual Maintenance        Less than RM 100.00 per annum                      RM 70.00 monthly (CoSec) 

Tax Planning                      Limited management                                           Efficient                                                                                                                                  

Bank Facility Application  Owner's business history                                   Company's business history

Ownership                           Partners/ Owners                                                 Shareholders

Management/ Control      Partners/ Owners                                                 Directors

Income Tax Liability         Partners/ Owners                                                 Company

Income Tax Form              Form P (Partnerships)/ Form B (Sole P.)        Form C

                                               Form PLT

Statutory Audit                   No                                                                            Yes (from RM 1,000/ per annum)

Required CoSec                   No                                                                           Yes (Registered CoSec)

SSM Annual Return           No                                                                            Yes

Compliance Officer            Applicable to LLP only                                        N/A

SME Definition:

Given that there have been many developments in the economy since 2005 such as price inflation, structural changes and change in business trends, a review of the definition was undertaken in 2013 and an SME definition was endorsed at the 14th NSDC Meeting in July 2013.

The definition was simplified as follows:
i. Manufacturing: Sales turnover not exceeding RM 50 million OR full-time employees not exceeding 200 workers.
ii. Services and other sectors: Sales turnover not exceeding RM 20 million OR full-time employees not exceeding 75 workers.
A business can qualify as an SME if it meets either one of the two specified criteria, namely sales turnover or full-time employees, whichever is lower.

Detailed definition by category namely micro, small and medium is as follows:

SME Definition