Sole Proprietorship: How much do you know?

Sole Proprietorship: How much do you know?

Who is eligible to register a sole proprietorship?
Only Malaysian citizens or permanent residents.

Who is the owner of the business?
The owner is the sole proprietor.

How is the business capital allocated?
Funded solely by the owner.

Who is it suitable for?
Young entrepreneurs, those in short-term businesses, and individuals with low-risk business ventures.

Who is responsible for managing the business?
Managed solely by the owner.

Legal status:
Does not have separate legal status.

Advantages of a sole proprietorship:

1. Lower tax payments (income below RM200k).
2. No need to pay audit and secretary fees, only require bookkeeping and tax reporting to the LHDN tax authority.
3. No need to pay additional fees to maintain the current registration status of the company.
4. No requirement to disclose financial statements to the public.

Disadvantages of a sole proprietorship:

1. Owner bears all responsibilities.
2. Higher tax payments if income reaches a specific amount.
3. Limited financing options, difficulty in obtaining high-value loans.
4. Lower business credibility.
5. If the business owner passes away, the business ends.