Partnership: How much do you know?

Partnership: How much do you know?

1.Who is eligible to register a partnership?                 Only Malaysian citizens or permanent residents.
2.Who are the owners of the business?                       At least 2 or up to 20 partners.
3.How is the business capital allocated?                     Contributed by the partners.
4.Who is it suitable for?                       Young entrepreneurs, those in short-term businesses, and individuals with low-risk business ventures.
5.Who is responsible for managing the business?    Managed jointly by the partners.
6.Legal status:                                                                Does not have separate legal status.

Advantages of a partnership:
1.Partners contribute funds and support.
2.Lower tax payments (income below RM280k).
3.No need to pay audit and secretary fees, only require bookkeeping and tax reporting to the LHDN tax authority.
4.No need to pay additional fees to maintain the current registration status of the company.
5.No requirement to disclose financial statements to the public.

Disadvantages of a partnership:
1.All partners bear full responsibility.
2.All partners have equal decision-making power, leading to potential disagreements.
3.Higher tax payments may be required (income exceeding RM200k).
4.Limited financing options, difficulty in obtaining high-value loans.
5.Lower business credibility.

Things to note for a partnership:
Income earned is business income. 
Business income must be reported using Form P.

Tax filing deadlines:
- Manual 30/6 
- E-filling 15/7 Tax computation based on individual tax rates ranging from 0% to 30%.