This document defines and describes sole proprietorships. A sole proprietorship is a business owned and operated by one individual. To form one, the owner registers the business with the Companies Commission of Malaysia within 30 days and pays registration fees ranging from RM30-RM60. The owner is solely responsible for profits and debts and has unlimited liability. Sole proprietorships are easy to form but have limited capital, skills and ability to expand.

1. Entrepreneurship
PEN2073
SOLE PROPRIETORSHIP
Prepared by :
Nur Fatin Syahirah Bt Nordin PTM130715032
Nur Sabrina Bt Mohd Anizan PTM130715040
Nurafiqah Liyana Bt Mohd Najib PTM130715050
Nariza Bt Safaruddin PTM130715027
Jumriati Bt Mohammad Tahir PTM130715327
Prepared for :
Miss Zulrina Efriza Bt Zardi

2. DEFINITION
 A Sole Proprietorship is formed under the Business Act
1956 (Amendment 1978).
 Business that is run by a single individual who makes all
the decisions, although the proprietor may engage
employees
 Personally entitled to all of the profits and its responsible
for any debts that company incurs.
Example : Tailor shops, Beauty Salons, Restaurants

3. HOW A SOLE PROPRIETORSHIP IS FORMED
How to start a business?
1.Registration of a new business to be done within 30 days from the date of
commencement of the business.
2. Registration can be done at any SSM counter or through the e-
Lodgement services
3. Complete the Business Registration Form (Form A) .
Business may be registered using personal name or using a trade name.
(i) Personal Name - Business name using personal name as stated in the
identity card is not required to apply for business name approval.
(ii) Trade Name - Complete business name approval form (Form
PNA.42).

4. ..
4. Business names approval is according to Rules 15, Rules of
Business Registration 1957.
5. Business Registration can be made for a period of one (1)
year and not more than five (5) years.

5. Documents to be attached are as follows:
a)Photocopy of owner’s identity card
b) Permit, licence or Supporting letter for the type of business e.g
Nurseries (Department of Social Welfare), Kindergarten, Tuition
Centres, Schools/College (Ministry/ Department of Education)
c) Approval or Supporting Letter from relevant agency if required by
the Registrar of Business.
TERM AND CONDITION

6. TERM AND CONDITION
Requirement :
1. Owner must be Malaysian Citizen or Permanent Resident of
Malaysia.
2. Owner must be aged between 18 years and above.
3. Only owner is allowed to submit application.

7. TERM AND CONDITION
Registration Fee :
1. Sole proprietorship using personal name as stated in the
identity card – RM30.00
2. Sole proprietorship or partnership using trade name -
RM60.00
3. Registration of branches – RM5.00 for each branch
4. Business Information Print-out – RM10.00

8. CHARACTERISTICS
Solely owned by one person/owner
Unlimited liability
Easy to form
Need to register with SSM
Usually formed with small capital/structure/business
Managed by owner itself or hire a few workers
No need to disclose the financial statement to
outsider/public

9. DIFFERENTIATE
BASIS SOLE PROPRIETORSHIP PARTNERSHIP
Formation -Most easy to form
-Can be started only by the owner
-Owned by the owner
- Can be started only on the
basis of an agreement
- Owned by 2 or more
Capital -Small capital is arranged by the
owner alone.
-Owner keeps all the profits
-Larger capital is arranged by
contributions from the partners
-Profits and losses are shared
equally
Management Not very efficient, depends upon
acumen of the sole trader.
Relatively better as more
individuals are involved in
decision making to make better
management.
Liability Unlimited Liability Unlimited Liability
Scale of Operation Suitable only for small scale
operation to medium scale
Scale operation can be increase
Stability Unstable Relatively stable
Flexibility Operation Highly Flexible Moderate flexible
Contribution to the society Generates self -employment Bringing together persons of
varying abilities

10. ADVANTAGES
 Easy to form and manage
 More freedom to manage the business
 No need to disclose the financial statement
 Small capital
 Owners keep all the profit
 Pay income tax based on the individual income

11. DISADVANTAGES
 Limited capital
 Unlimited liability
 Lack of continuity
 Difficult to expand
 Limited skills, life, management ability
 Only enjoy limited profit