Malaysia Proprietorship



Being young is not a crime, and starting a business early should not always be certain death.

Proprietorship

That's one small step for man, one giant leap for mankind.. - Neil Armstrong.


Every man has to take a bold step to achieve something revolutionary. Starting a business is a bold step, but it should eventually reap rewards. Are you a student or a working professional? If you are earning money on the side, I strongly recommend you to start something called a Sole Proprietorship.

A proprietorship is a business entity which allows you to declare your expenses against your earnings as opposed to declaring just your earnings. 

Example:

Without a Proprietorship, assuming you earn $100,000 per annum and earn an added side income of $25,000 from advertising, sales, consultation services, etc you would normally pay taxes on $125,000. Which is quite a hefty sum!

What if you had a Proprietorship? If you had a proprietorship, when you declare your earnings you would also have to declare your expenses! Assuming you had $100,000 per annum with an added $25,000 side income, and you spent $45,000 for that year, you would only have to pay taxes on $80,000.

$100,000 + $25,000 - $45,000 = $80,000 taxable income.

What can you expense?

Your phone bills/ electricity/ water can be expensed as "Utilities", Home rent based on how much of the home you use for the business as "rent" (example 90% is used for the business and the total rent is $100, $90 is expensed), and you get the general idea of everything else. Not all things can be expensed as clearly as I defined. Some items are only expensed proportionally over a number of years, and some cannot be expensed. This depends on the area where you live.

How to set up Proprietorship in Malaysia?

Setting up a Proprietorship in Malaysia is very easy when done offline. All you have to do is fill a form at one of SSM's many available branches! 



GUIDELINES FOR REGISTRATION OF NEW BUSINESS

Business includes every form of trade, commerce, craftsmanship, calling, profession or other activity carried on for the purposes of gain, but does not include any office or employment or any charitable undertaking or any occupation specified in the schedule under the provisions of the Business Registration Act 1956 (ROBA 1956). Business that may be registered under the ROBA 1956 is a business operating in West Malaysia which includes Peninsular Malaysia and the Federal Territory. 


1. Sole Proprietorship – a business wholly owned by a single owner



Registration Procedure

  1. Business may be registered using personal name or using a trade name.
    1. a)  The business name using personal name as stated in the identity card is not required to apply for business name. Example: Ruslan bin Mohamed, Siow Ah Thai or, Ramasamy a/l Mutusamy
    2. b)  Trade Name is the name of the proposed business and must obtain prior approval from the Registrar of Business. Example: Kedai Dobi Mewah, Lucky Star Catering or, ABS Unggul Enterprise.
  2. Complete the Business Registration Form (Form A) with the following information :
    a) Business name b) Commencement date of business c) Principal place of business

d) The address of the branch of business (if any) e) Information of owner and partners f) Type of business carried out g) Provide a copy of the Partnership Agreement (if any)
  1. Every business owner and partner must sign the completed Form.
  2. Person responsible must submit the application to counter or through online via SSM e-Lodgement services in the SSM’s website.
  3. Documents to be attached are as follows:
    a) Photocopy of owner and/ or partner’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); and
    c) Approval or Supporting Letter from relevant agency if required by the Registrar of Business.
Requirement
  1. Owner must be a Malaysian Citizen or Permanent Resident of Malaysia.
  2. Owner must be aged between 18 years and above.
  3. Register the business not later than thirty (30) days from the date of commencement of business.
  4. The nature of the registered business should not contravene any laws or likely to be used for unlawful purposes or any purpose prejudicial to or incompatible with the security of the Federation, public order or morality.
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
General Guide
  1. A new business registration may valid for a period of one (1) year and does not exceed five (5) years on each registration.
  2. Business Registration Certificate can be obtained within one (1) hour from the time payment is made.
  3. A person who carries on business without registering a business commits an offence under the ROBA 1956 and if found guilty be fined not exceeding RM50,000 or imprisonment for a term not exceeding two (2) years or both.
  4. Even though businesses have been registered with SSM, business owners are responsible to obtain licences, permits or approval letters from other relevant authorities in order to operate their businesses.
Nicholas.

P.s. Correct me please if any of my information is not accurate, and I won't held responsible for any mishaps that you might go through when doing this. You should be fully aware of the decisions you make, and I am just providing you information. Thank you!


*This general guide was provided by SSM Malaysia.