Side by side
| Enterprise (sole proprietor or partnership) | Sdn Bhd (private limited company) | |
|---|---|---|
| Legal status | Not separate from you | A separate legal entity |
| Business debts | You are personally liable, without limit | Generally limited to your share capital |
| Who can register | Malaysian citizens and PRs only | Malaysians and foreigners |
| SSM fee to start | RM30 a year (own name) or RM60 a year (trade name) | RM1,050 one-off (RM0 with us) |
| Tax | Personal income tax, up to 30% | Company tax. SMEs pay 15% on the first RM150,000 of profit |
| Owners | You alone, or partners | 1 to 50 shareholders |
| Company secretary | Not needed | Required within 30 days |
| Yearly admin | Renew the registration | Annual return, financial statements, tax return |
| Loans, tenders, investors | Harder | Easier |
| If the owner leaves or dies | The business ends | The company continues |
When an Enterprise makes sense
- You're testing an idea or running a side business.
- Your profit is still small.
- You want the least paperwork possible.
When a Sdn Bhd makes sense
- Your profit is growing and personal tax is starting to hurt.
- You want to keep your house, car and savings separate from business risk.
- Customers, landlords or government tenders ask for a Sdn Bhd.
- You're bringing in partners or investors, or a foreigner will own shares.
The tax difference
Enterprise profit is taxed as your personal income, at up to 30%. A Sdn Bhd that qualifies as an SME pays 15% on its first RM150,000 of profit, then 17% up to RM600,000.
For example, at RM200,000 yearly profit, a Sdn Bhd could save you about RM9,800 in tax a year. Below about RM100,000 profit, the saving is usually small.
Work out your own saving with our tax saving calculator →
Can I change my Enterprise into a Sdn Bhd?
Yes. You register a new Sdn Bhd, often with a name close to your Enterprise name, move the business across, then close the Enterprise. Your customers, contracts and bank account need to be moved to the new company.
Ready for a Sdn Bhd?
We pay the RM1,050 SSM fee when you appoint us as your company secretary.