Private limited company (popular known as ‘Sendirian Berhad’ or ‘Sdn. Bhd.’) is the most common type of business vehicle for doing business in Malaysia. Sdn Bhd provides limited liability protection to shareholders (i.e. business owners). The limited liability protection protects the entrepreneurs against trading losses, especially when working within an unstable and ever-changing economic climate.
Advantages of Forming a Company:-
- Limited liability protection.
- Shareholders/Owners’ personal assets are not put at risk should the business fail.
- Shareholder’s liability is limited to the amount of shares subscribed.
- Easy transfer of ownership (Ownership is easily transferable through the sale of shares)
- Unlimited life. (When a Sdn Bhd’s owner incurs a disabling illness or dies, the company does not cease to exist)
- Raise capital more easily, additional capital can be raised by selling shares to new investors (not allowed to sell shares to the public).
- Sdn Bhd may be perceived as a more professional/legitimate entity than a sole proprietorship, conventional partnership or limited liability partnership.
- Customer / Commercial partners will have more confidences in dealing with your Company.
- Easier Access to Funding. (Forming a company will add to your business creditability, this makes it easier to secure finance for your business with less personal risk)
- Greater Tax Advantages. (More business expenses may be tax-deductible. more tax deductible expenses, tax incentives and lower tax rates)
- Conversion into Public Listed Company. (Should the Company grows to a level that need access significant funding from public, then Sdn Bhd can be converted into a Public Listed Company)