Capable of exercising the functions of a corporate body and carry on any business or activity.
The member’s liability is limited to the capital that they have invested in the company. It protects the member from risks to their personal wealth.
More options available to raise capital - issuance of new shares or loans from financial institutions. For enterprises, there are limited options and the owners might have to raise funds at a risk to their personal assets.
Continues to exist despite changes of ownership.
Corporate tax can be more beneficial than paying additional individual income tax since there might be some tax-exemption benefits.
Do note that company directors are responsible for submitting their company’s tax file registration and Form E. Form E is required to be submitted by every 31st March of the subsequent year from its year of incorporation to the Inland Revenue Board of Malaysia.
Pursuant to Companies Act 2016, the company directors shall prepare financial statements within 18 months from the date of its incorporation; and subsequently, within 6 months of its financial year end.
The company directors are responsible for statutory compliance and reporting requirements to the relevant authorities such as annual returns, audited financial statements, and income tax statements.
|Enterprise||Private Limited Company|
|General definition||Refers to Sole Proprietorship or Partnership that can be set up by individual(s).||A business owned by private individual(s) or corporation(s) which enjoy limited liability.|
|Owner||For Sole Proprietorship, it needs only 1 person. For Partnership, it ranges from 2 to 20 persons.||1-50 members/shareholders.|
|Liability||Does not provide a separate legal entity and the owner(s) is/are personally accountable for debts and liabilities.||A member’s liability is only limited to the capital that they have invested into the company. It protects the member from risks to personal wealth unless they have made a personal guarantee for the debt.|
|Raising of capital||Limited options for an enterprise to raise funds and the owner(s) might have to raise funds at a risk to their personal assets.||More options available as a company can choose to raise funds by way of issuance of new shares or loans from financial institution.|
|Taxes||Profit is taxed at personal income tax rate.||Corporate tax can be more beneficial than paying additional individual income tax and there might be some tax-exempt benefits.|
|Perpetual succession||The business will be dissolved upon the departure of one or more of the owners.||A company continues to exist despite of the changes in ownership.|
|Compliance requirements||Minimal responsibilities.||Stringent requirements. A company is required to conduct annual filings even if a company has become dormant.|
|Fees||Relatively simple and low cost to maintain an enterprise.||A company will need to spend significant sums of money to conduct mandatory submissions.|