4 COPYRIGHT BY KENNETH FOO Or Be an Entrepreneur!Have a plan, vision, conceptConduct a survey & research on your plan or visionLearn more from othersPut your plan into motionSet up a vehicle
5 Types of Business Vehicles COPYRIGHT BY KENNETH FOOTypes of Business VehiclesSole ProprietorPartnershipLimited Liability PartnershipLimited Company
6 COPYRIGHT BY KENNETH FOO Sole ProprietorA business wholly owned by an individual using his/her personal name or trade name.Example: Zainal Abidin Ali or New Town Kopitiam or Chong Big PauEligibility requirements :Must be a Malaysian citizen or permanent resident; andMust be aged 18 and above.
7 Procedure to Register Sole Proprietor COPYRIGHT BY KENNETH FOOProcedure to Register Sole ProprietorFiling of an application for approval of the proposed trade name for the business.If the proposed business is registered under the owner’s name, there is no need to obtain prior approval from SSM.Filing of Borang A (Registration of a New Business).(a) Form A shall contain the following information:The name of the business;The nature of the business;The date of the commencement of the business;The address of the place of business;Branch(es) of the business;
8 Procedure to Register Sole Proprietor COPYRIGHT BY KENNETH FOOProcedure to Register Sole ProprietorThe following documents must be attached with Form A for submission:Letter of approval of business name from SSM (if the trade name is used);Photocopy of owner’s IC;Permit, license, approval or supporting letter from any other agency (if any)Fee payable – RM30 for personal name, RM60 for trade name, RM5 for each branch
9 Procedure to Register Sole Proprietor COPYRIGHT BY KENNETH FOOProcedure to Register Sole ProprietorSubmit search of trade name. No necessary if personal name used.After approval of name, complete Borang A, get Commissioner for Oaths to sign & submit to SSMPayment of fee (RM30/60) to SSM on submission of Borang A. Wait for Borang D.
10 After Registration – Changes & Renewal COPYRIGHT BY KENNETH FOOAfter Registration – Changes & RenewalAfter registration, changes will be allowed by submitting:Borang B1 - Change of Business AddressBorang B2 - Change in Type of BusinessBorang B3 - Changes of Particulars on BranchesBorang B4 - Changes of Information of OwnerROBA requires the registration of changes in the business particulars to be lodged within 30 days from the date of such changes.Fee payable for above – RM20.00Renewal - the owner may register the business for up to five (5) years. Application for renewal of Borang D must be made within 30 days before its expiry by filing Borang A1 with SSM or by renewing at the Pejabat Pos
11 COPYRIGHT BY KENNETH FOO PartnershipA partnership (perkongsian) is a business owned by two (2) or more persons but not exceeding 20.Business includes every form of trade, commerce, craftsmanship, calling, profession or other activity carried on for the purpose of gain, but does not include any office or employment or any charitable undertaking or any occupation specified in the Schedule of the Registration of Businesses Act 1956 (ROBA).
12 Procedure to Register Partnership COPYRIGHT BY KENNETH FOOProcedure to Register PartnershipSubmit search of partnership name.After approval of name, complete Borang A, get Commissioner for Oaths to sign & submit to SSMPayment of fee (RM30/60) to SSM on submission of Borang A. Wait for Borang D.
13 TERMINATION OF BUSINESS COPYRIGHT BY KENNETH FOOTERMINATION OF BUSINESSBusiness may be terminated for the following reasons:Cessation (closure) of the business;Owner becomes an undischarged bankrupt;Death of the owner;Carrying out unlawful activities or activities which are prejudicial to national security, public order or morality; orPursuant to a Court Order.Procedure – file Borang C (Notification of Termination of Registered Business) with SSM.Borang C shall contain:(a) The date of termination; and(b) Reason(s) for terminating the business.
14 TERMINATION OF BUSINESS COPYRIGHT BY KENNETH FOOTERMINATION OF BUSINESSThe completed Borang C must be signed by the business owner and the following documents must be attached:(a) Certificate of Registration of Business (Borang D);(b) Copy of the Court Order if the termination is by an Order of the Court;(c) Copy of the Death Certificate (if applicable) [must be submitted within 4 months of death of owner]; or(d) Enclose relevant documents if the owner has become a bankrupt.Form C must be filed within 30 days from the date of termination of the business.
15 COPYRIGHT BY KENNETH FOO Limited CompanyThe most common type of company incorporated for purposes of carrying on business is a company limited by shares. A company limited by shares may be incorporated as a:Private Limited Company – identified through the words ‘Sendirian Berhad’ or abbreviation ‘Sdn. Bhd’ as part of the company’s name.Public Limited Company – identified through the words ‘Berhad’ or abbreviation ‘Bhd’ as part of the company’s name.
16 Limited Company - Process COPYRIGHT BY KENNETH FOOLimited Company - ProcessThe requirements to form a sdn bhd or berhad company are:A minimum of two (2) subscribers to the shares of the company (section 14 of the CA);A minimum of two (2) directors (section of the 122 CA); andA company secretaryBoth the director and company secretary shall have their principal or only place of residence within Malaysia (sections 122 and 139 of the CA respectively).
17 Limited Company - Process COPYRIGHT BY KENNETH FOOLimited Company - ProcessSubmit Search of name with fee of RM30 to SSMAfter name is approved, to submit for registration Form 48A, Form 6 by Secretary and Memorandum & Articles of AssociationForm 9 – Certificate of Incorporation issued by SSM. Can commence business, opening of bank account & apply for telephone, electricity, income tax etc.
18 Limited Company - Process COPYRIGHT BY KENNETH FOOLimited Company - ProcessForm 48A (Statutory Declaration by a Director or Promoter before Appointment)The director or promoter declares under oath that:he/she is not a bankrupt; andhe/she has not been convicted and imprisoned.Memorandum & Articles of AssociationIt defines the business of the company, share capital and the subscribers. The Articles define the relationship between the members and directors and constitute the internal rules of the company.The first directors and secretaries must be named inside.The subscribers to the company’s shares shall sign the Memorandum and Articles of Association in front of a witness.
19 Limited Company - Benefits COPYRIGHT BY KENNETH FOOLimited Company - BenefitsRegistered paid up capital can be as low as RM2-00 being the shares taken by the initial promoters of the companyPrivate limited or public limited companies have all the powers to hold properties, to enter into contracts and to do everything within the objects stated in its Memorandum of AssociationOffers limited liability to its directors and shareholders as outsiders can only sue the company and not the individuals. Example – company sells an electrical item to a consumer. Item is defective but causes damage to the consumer. Consumer can only sue the company but not the directors or shareholders.
20 Limited Company - Disadvantages COPYRIGHT BY KENNETH FOOLimited Company - DisadvantagesCostly – incorporation of companies starts from RM1, compared to RM70 for sole proprietorship & partnershipLegal compliance – limited liability companies are subject to the Companies Act 1965 and are required to hold an Annual General Meeting, to submit the audited accounts to SSM, to submit prescribed forms where there are changes (such as directors or their particulars) and to appoint a company secretary and auditor.It is not easy to close down a limited company as the process is called a winding up and costly
21 COPYRIGHT BY KENNETH FOO Winding Up a CompanyThere are two (2) modes of winding up under section 211 of the CA:Voluntary winding up; orWinding up by the Court (also referred to as compulsory winding up)Voluntary winding up – the company must be solvent i.e. its liabilities is less than the assetsWinding up by the Court – the Court will order the winding up when the company is unable to pay its debts, when the directors have acted in their own interests other than the shareholders, where the company fails to commence business within 1 year, etc.
22 Limited Liability Partnership (LLP) COPYRIGHT BY KENNETH FOOLimited Liability Partnership (LLP)Governed by the Limited Liability Partnerships Act 2012 (Akta Perkongsian Liabiliti Terhad 2012)A hybrid between company and conventional partnership offering fundamentally:the privilege of limited liability accorded to the partners of the LLP; andthe flexibility of internal management.Suitable for small businesses, professionals, joint ventures & venture capitalsThe LLP is a body corporate and shall have legal personality separate from its partners, perpetual succession and unlimited capacity.
23 Limited Liability Partnership (LLP) COPYRIGHT BY KENNETH FOOLimited Liability Partnership (LLP)LLP may be formed:by a minimum of two persons (wholly or partly individuals or bodies corporate);for any lawful business with a view of profit; andin accordance with the terms of the LLP agreement.LLP formed for professional practice must:consist of natural person of the same profession; andhave in force professional indemnity insurance as approved by the Registrar.
24 Limited Liability Partnership (LLP) COPYRIGHT BY KENNETH FOOLimited Liability Partnership (LLP)Information required for registration:proposed name of LLPnature of businessaddress of registered officename and details of partnersname and details of compliance officerapproval letter (in cases of professional practice).Flexible internal arrangement through:LLP agreement; orIn the absence of agreement, default provisions covering the mutual rights and duties of LLP and its partners.
25 Liabilities of Partners COPYRIGHT BY KENNETH FOOLiabilities of PartnersAny individual or body corporate can be a partner.“Partner” means any person admitted as a partner in accordance to the LLP agreement and includes salaried partner.Any obligation arising from contract or tort will be the liability of the LLP and not the partners.A partner however will be jointly and severally liable for his own wrongful act or omission in the course of the business of the LLP.Liabilities of LLP will be borne out of the property of the LLP.
26 COPYRIGHT BY KENNETH FOO Cessation of PartnerAutomatic cessation:Upon death/dissolution of a partner; orin the case of a professional practice, the partner has been disqualified from carrying out the professional practice.Voluntary cessation:a partner may cease to be a partner in accordance with the LLP agreement; orin the absence of such an agreement, by giving a 30 days notice to the other partners.Bankruptcy of a partner will not cause a partner to cease being a partner.
27 COPYRIGHT BY KENNETH FOO Dissolution of LLPCourt Ordered Winding UpDivisions 2 and 4 of Part X of Companies Act 1965 and the Companies Winding Up Rules 1972 will be applicable.Appropriate modificationsVoluntary Winding UpApplication in writing to the Registrar when all assets and liabilities have been discharged.Application must be preceded by notice to all partners and advertisement of the intention to wind up.Registrar will order dissolution only if there is no objection received.
28 COPYRIGHT BY KENNETH FOO Dissolution of LLPStriking off - the Registrar will strike LLP off the register on the following grounds:No longer carrying on business;Contravention of the Act;Prejudicial to national interests; orNo liquidator acting in cases of court ordered winding up;Affairs have been fully wound up but no sufficient assets to obtain court order.
29 What are you waiting for? COPYRIGHT BY KENNETH FOOWhat are you waiting for?Have a business plan!Consult a company secretary, accountant or lawyer for the best possible business vehicle for you.Go ahead! The world is out there! A journey of a thousand li begins with one step!