SSM Registration: The Types of Businesses You Can Register With SSM

Are you interested in starting an online business or your own company? Well, it is absolutely doable! In Malaysia, Suruhanjaya Syarikat Malaysia or also known as SSM in Malaysia handles the registration of all businesses and companies. To legally open your company or business, you have to register with SSM. We provide a detailed step-by-step guide on how to register a company in Malaysia.

Before you get started on your SSM registration, you will need to know the necessary information and acquire the required knowledge of the business industry.

Business terms can be confusing, but it is not all that difficult to learn. In this article, we will explain and help you in identifying the different types of business entities that are applicable for you to register in Malaysia and the steps into starting your very own business.

Check out our other articles under SSM:

How To Register A Company in Malaysia With SSM: Step By Step Guide 2019

How To Register a Company in Malaysia with Suruhanjaya Syarikat Malaysia (SSM) as a Foreigner

Starting Out: Choosing The Best Company Name

Step 1: Knowing Different Business Types

How Many Types of Companies are there in Malaysia?

In general, there are a few different business entity types that you are able to own, in Malaysia, which consists of Public Limited companies like Sendirian Berhad (Sdn Bhd) and Berhad (Bhd), as well as Enterprises like Sole Proprietorship, Partnership, and Limited Liability Partnership (LLP). Although, the most common ones in Malaysia is Sendirian Berhad (Sdn), Partnership and Sole Proprietorship.

Differences in Characteristics Between the Types of Business Entities

Sendirian Berhad 

Sendirian Berhad or also understood as Sdn Bhd is a private limited business entity, that prohibits the invitation of the public to its shares. Sendirian Berhad companies also have their own assets and are considered as a separate legal entity by itself. Due to its limited liability, the owners and shareholders are not personally liable to the companies legal issues or problems. 

• Company name requires to be ended with Sdn Bhd.
• The contributed capital is through shares. 
• It has a minimum of 1 to a maximum of 50 number of shareholders. 
• Requires a qualified company secretary.

How many Shareholders are needed to form a company?

For Sendirian Berhad Companies (Sdn Bhd), shares are essential to ensure the survival of the company. This type of company requires a minimum 1 to a maximum 50 shareholders.

Berhad

A Berhad (Bhd) company is a private limited company. It is very similar to the Sendirian berhad, except it’s shares are showcased and offered to the public for a fixed period of time or through subcription. This type of business entity is usually listed under the Securities Commission in Malaysia. The Berhad companies are usually for large scaled businesses.

• Company name requires to be ended with Bhd.
• The contributed capital is through shares. 
• It has a minimum of 1 to a an unlimited maximum number of shareholders.
• Requires a qualified company secretary.

Sole Proprietorship 

Sole Proprietorship is also known as a sole trader is an unlimited business enterprise company that is owned by only one individual. The unlimited liability of the company will be fully set on that one owner. 

• The trade name has to be available and approved at SSM.
• The contributed capital is through own contribution.
• The owner of the business is that one individual.

How Do I Register as a Sole Proprietorship?

You can head over to Suruhanjaya Syarikat Malaysia (SSM) to register yourself as a sole proprietor or even online on EzBiz.

Partnership

A Partnership is very similar to the Sole Proprietor business, as it is an unlimited business enterprise. However, it is owned by two or more individuals, that means that the liabilities and profits are now spread over to more than just one person. 

• The trade name has to be available and approved at SSM.
• The contributed capital is through the partner’s contribution.
• It has a minimum of 2 to a maximum of 20 partners. 

How to Register a Partnership Business in Malaysia?

Similar to the Sole proprietorship, you will need to head over to Suruhanjaya Syarikat Malaysia (SSM) to register yourself and your partners, as well as online on EzBiz.

Limited Liability Partnership 

Limited Liability Partnership or LLP is a combination of both aspects of Enterprises and Public Limited Companies. It is a business partnership where the company is its own entity and the owners are not liable for the company. 

• Company name requires to be ended with PLT.
• The contributed capital is through the partner’s contribution.
• It has a minimum of 2 to an unlimited number of partners/shareholders.

Step 2: Identifying your Business Type

Why Recognising your Business Structure is important

• Business base and foundation
  Determining out what business entity you have is one of the first stepping stones of starting your business or your own company. It can determine whether the business will be successful in the future and reach their highest potential. The framework is also essential to maintaining the business.

• It involves money
  Starting out a business or a company is a huge and crucial decision that involves the investment of money. It would be a waste of funds if you are not planning out your business well and it fails.

• It involves legal entities
  Registration of the company is only one aspect of starting a business. With everything you do, there are many things that may be affected. If a business fails on deciding the correct structure, it can face several legal difficulties in the long run.

Registration at Suruhanjaya Syarikat Malaysia (SSM)

When considering to register your business and company at Suruhanjaya Syarikat Malaysia (SSM), there are a few several things and differences to be aware of. 

The registration floor for the Sendirian Berhad (Sdn Bhd) companies is located at level 17. For foreigners that are interested in opening a company in Malaysia have only the option of opening a Public Limited company, that is a Sendirian Berhad. We wrote an in-depth detailed article on how to register a company in Malaysia as a foreigner with SSM.

For Enterprise companies such as Partnership and Sole Proprietorship, the registration floor is on the 14 floor. It is good to be aware of this information to ease your company registration process. The registration process consists of naming your company as well as the legal paperwork that goes into registering.

Step 3: Knowing the Pros and Cons of your Business Type

The Pros and Cons of each Business Type 

	Pros	Cons
Private Limited Company (Sendirian Berhad & Berhad)	Business Continuity The owner is transferable or saleable to other parties and will not be affected legally.  Personal Assets are protected Due to the company being a separate entity, the owner/shareholders personal assets are separated from the company’s.  Can take bigger risks Is considered as a more established business entity. Increased chance of getting a loan. Accounts for this type of business entity is more trustworthy and reliable.  Low Income Tax The tax exposure of the owners/shareholders are low.	Pricier and more formalities.  The registration is more expensive and requires more documentation.  Strict Bookkeeping Due to Law regulations, the company needs to hire a company secretary in managing the books and accounts. Has to be audited  Required to be audited and  file annual returns and financial statements every calendar year. Taxation The company is required to pay tax up from 20% to 25%.  Required to disclose financials The company is required to disclose financial statements to the public.
Enterprise (Sole Proprietorship & Partnership)	More affordable Price of registration is cheaper. Not Liable for Tax The company is not required to pay tax. Less Legal Formalities The registration is faster and less documentation is needed.  No Auditing Required Not required for statutory audit Conversion to a Limited Company It is easier to convert to a Limited Company (Sdn Bhd).	No Business Continuity The business will cease operation immediately in event if the owner(s) die. Personal Assets are not protected The unlimited liability extends risks to the owner(s) personal assets.  Income tax is very high The tax exposure of the owner(s) will be high
Limited Liability Partnership	Personal Assets are protected Due to the company being a separate entity, the owner/shareholders personal assets are separated from the company’s.  Business Continuity The owner is transferable or saleable to other parties and will not be affected legally.  No Auditing Required Not required for statutory audit unless it is provided in the agreement. Less Legal Formalities The registration is faster and less documentation is needed.  Not Required to disclose financials The company is not required to disclose financial statements to the public.	Taxation The company is required to pay tax up from 20% to 25%.  Needs a Local Resident compliance officer Local resident compliance officer is required to setup LLP

Step 4: Register your Business as SSM

Since you know know what different business types are available for you to register, head on the SSM office or register your company online now.

Conclusion

So there you have it! Take note on the different types of businesses before you actually get started with your SSM registration. For every new business, you’ll need to have an online presence as well. Luckily for you, we offer web design services as well as SEO services to boost your newly established business!