2. Richard Oon AMP
CA (M), FCTIM, FCCA (UK), CFP
• National Tax Director of TY Teoh International, one of the leading and
fastest-growing consulting service providers in Malaysia and Singapore
and a member firm of MSI Global Alliance, an international association
of independent accounting firms ranked consistently Worldwide Top 20.
• Member of the Malaysian Institute of Accountants (MIA), a fellow
member of the Association of Chartered Certified Accountants (ACCA),
a fellow member of the Chartered Taxation Institute of Malaysia (CTIM)
and also a Certified Financial Planner (CFP).
• Holds a tax agent licence issued by the Ministry of Finance.
• More than 25 years experience in taxation and business advisory.
• Independent non-executive director of AE Multiholdings Berhad and
Yen Global Berhad, companies listed on the Main Board of Bursa
Malaysia.
• Awarded the title ‘Ahli Mahkota Pahang’ (AMP) by the Sultan of
Pahang.
6. Number of Members
• Sole Proprietorships - 1 person
• Partnerships -
Minimum 2,
maximum 20
• Companies (Sdn. Bhd.) -
Minimum 2,
maximum 50
• Limited Liability Partnerships -
Minimum 2, no
maximum
7. Legal Requirement To Register Your Business
Regardless of the business you are running and
depending on your business entity, you are
required to register your business with the
Companies Commission of Malaysia (CCM)
under:
• The Registration of Businesses Act 1956
• The Companies Act 1965, or
• The Limited Liability Partnerships Act 2012
8. The Registration of Businesses Act (ROBA)
Does not apply to—
(a)any business which is exclusively owned and carried on by any
company registered under the Companies Act 1965 [Act 125];
(b)any business owned or conducted by the Government or by any
public body incorporated by or constituted by or under any written
law;
(c) any society registered or exempted under any written law for the
time being in force relating to the registration of societies or co-
operative societies;
(d)any business consisting solely of the exercise of any profession
which under the provisions of any written law can be exercised only
by those who possess certain qualifications prescribed by such
written law and whose names are registered or otherwise recorded
in manner prescribed by any written law.
9. Definition of Business under ROBA
“Business” includes every form of trade,
commerce, craftsmanship, calling, profession,
or other activity carried on for the purposes of
gain, but does not include any office or
employment or any charitable undertaking or
any occupation specified in the Schedule.
10. Offence and Penalties
12 (1) Any person who—
(a) being a person required to register his business under this
Act carries on that business without registering the business;
(b) continues to carry on any business after the period of
registration has expired;
…commits an offence and shall on conviction be liable to a fine
not exceeding fifty thousand ringgit or to imprisonment for a
term not exceeding two years or to both.
13. About the Limited Liability
Partnership (LLP)
• Hybrid between company and
conventional partnership
• Benefits of limited liability and at the
same time allows its members the
flexibility of organising internal structure
as in a traditional partnership.
14. About the Limited Liability
Partnership (LLP) (Cont.)
Conventional
Partnerhip
Sdn. Bhd.
Limited Liability
Partnership
+
Flexibility of Organising Internal
Structure
+
Lower Administrative Costs
Limited Liability
Best of Both Worlds (?)
15. • A separate legal entity which has the
unlimited capacity to hold property while
the partners enjoy the limited liability
status.
• May be formed by any two or more
individuals and/or bodies corporate for
any lawful business with a profit motive
in accordance with the terms of the LLP
agreement.
About the Limited Liability
Partnership (LLP) (Cont.)
17. Forms of Ownership
Description Enterprise LLP Sdn. Bhd.
Start- up cost Low start-up costs,
business registration
costs from RM100
onwards
Moderate start-up
costs, registration
fees should cost
about RM1,500.
However, requires
LLP partnership
agreement which will
be an additional cost.
Higher start-up costs,
company
incorporation fee
approximately
RM2,600
Annual
running costs
Relatively low;
accounting fees, tax
fees and business
renewal
(say, RM1,000 p.a.)
Lower than a Sdn.
Bhd., as LLP does
not need to incur
audit fees
(say, RM3,000 p.a.)
Various and higher;
accounting, audit,
tax, company
secretarial fees,
annual filing fees
(say, RM5,000 p.a.)
18. Description Enterprise LLP Sdn. Bhd.
Regulatory
compliance
Governed by the
Registration of
Businesses Act 1956
Governed by the LLP
Act 2012
Governed by the
Companies’ Act 1965
therefore subject to
stricter regulations
Owner(s)’
liability
Unlimited liability,
sole-proprietor or the
partners are
responsible
personally for all
debts
A partner is not
personally liable,
directly or indirectly
for an obligation of an
LLP solely by reason
of being a partner of
the LLP
Limited liability, ie
protection for the
shareholders ’
personal assets
against commercial
risk
Number of
directors
Not applicable, as
sole-proprietor or the
partners run the
business
Mimimum of 2 or
more persons,
consisting of
individuals or body
corporate (Sdn. Bhd.)
Minimum of 2
directors required,
each having his
principal or only place
of residence in
Malaysia
Forms of Ownership
19. Description Enterprise LLP Sdn. Bhd.
Income Tax At scaled-rates from
0% to 26% (where
chargeable income
exceeds RM100,000)
20% tax rate on the
first RM500,000
chargeable income,
balance at 26%
20% tax rate on the
first RM500,000
chargeable income,
balance at 26%
Business
continuity
/transfer of
ownership
Any change in the
composition of the
partnership marks the
end of the partnership
and the creation of a
new one; i.e.
members of the
original partnership
are responsible for
contractual
obligations incurred
prior to the
termination.
Any change in the
partners of an LLP
shall not affect the
existence, rights or
liabilities of the LLP
i.e. it has perpetual
succession.
A shareholder may
die but the business
continues
Easy to transfer
shares in public
owned or private
companies
Forms of Ownership
20. Description Enterprise LLP Sdn. Bhd.
Dissolution
and Strike-
Off
If no partnership
agreement,
dissolved:
• by the expiration of
an agreed fixed
term;
• by termination of
that specific
adventure/underta
king entered into;
or
• if entered into for
undefined time, by
any partner giving
notice to the other
or others of his
intention to
dissolve the
partnership.
May be dissolved by:
• way of Court order;
or
• voluntary winding-
up, after satisfying
certain conditions
May be struck-off on
among others, the
following grounds:
• no longer carrying
on business;
• no liquidator acting
for court order
winding up; or
• Insufficient assets
to pay the cost to
obtain winding-up
order.
May only be
dissolved by:
• way of Court
order; or
• voluntary winding-
up by members or
creditors.
The Registrar may
strike off the name of
defunct companies
subject to fulfilling
certain criteria
Forms of Ownership
22. Factors to Consider in Choosing
Your Business Structure
1) Limited Liability
2) Formalities
3) Financing
4) Management
5) Life of Business
6) Liquidity of Investment
7) Annual Running Costs
8) Taxation
24. Sole-Proprietors:
The business has no distinction from the individual and income from the business
will be charged to tax on the individual.
Partnerships:
The business has no distinction from the individual partners and each partner’s
share of salary and profit from the partnership will be assessed to tax on the
respective partners.
Limited Liability Partnerships (LLP):
A LLP is a separate legal entity from its partners; the partners are only assessed on
the remuneration received from the LLP. Distribution of profits are not taxable on
the partners.
Private Limited Companies (Sdn Bhd):
A company is taxable entity separate from its shareholders; and the shareholders
are only assessed on the profits that flow to them in the form of dividends.
Ownership Types and Tax Implications
26. Things I Have Shared
• Legal requirements to register your business
• Type of business structures available and their
characteristics
• The limited liability partnership – the choice of
business entity for an expanding business?
• Factors to consider when choosing your business
structure
• Tax implications of various business structures
27. Our Contact Information
Website : www.consulnet.com.my
Johor Office (Southern States)
85-1A, Jalan Bentara 20, Taman Ungku Tun Aminah, 81300 Skudai, J.B, Johor.
T +607-5588890 F +607-5577890 E skudai@tyteoh.com
No. 118-4, Jalan Salleh, 84000 Muar, Johor.
T +606-9520205 F +606-9526305 E muar@tyteoh.com
Kuala Lumpur Office (Central States)
5B, Jalan SS25/12, Taman Desa Suria, 47301 Petaling Jaya, Selangor.
T +603-78800532 F +603-78802532 E pj@tyteoh.com
Perak Office (Northern States)
160, Taman Desa Bintang II, Jalan Lumut, 32000, Sitiawan, Perak.
T +605-6927112 F +605-6918112 E sitiawan@tyteoh.com
Penang Office (Northern States)
Unit A2, 18th Floor, Gurney Tower, No. 18, Persiaran Gurney, 10250, Penang.
T +604-3713318 F +604-3713368 E admin@consulnet.com.my
