WEEK33

WEEK
BUSINESSRULES
RULES&&
BUSINESS
SUPPORTS
SUPPORTS

Learning Outcomes:
1.
2.
3.
4.
5.

Understand business entity govern to

Malaysian Law.
Understand rules and regulations need in
Malaysia.
Identify strength and weakness in business
entity selection.
Be able to register business formation chosen.
Understand the business supports and
assistances needed.

Lecture Content:
1.
2.
3.

Business Formation In Malaysia

Rule & Regulation
Business Supports & Assistances

Establishment of business
entities in Malaysia

Business in Malaysia can be registered

within four Acts
Business Registration Act 1956
(Amendment 1978) and procedures of
business registration 1957.
Companies Act 1965
Cooperation Act 1948
Parliment Act or State Ecatment Act

BUSINESS ENTITY IN MALAYSIA

I

Sole
Proprietorship

Business
Registration
Act

Partnership

II
Company Act
1965

III
Cooperative
Act 1948

IV
Parliamentary
Act & State
Government
Enactment

Limited Company
by Guarantee

Private Limited
(Sdn. Bhd)

Limited Company
by Share

Public Company
(Berhad)

Unlimited
Company

Foreign Owned
Company

Companies Commission of
Malaysia (SSM)
State

Address

Head Quarter

Tingkat 2, 10-19 Putra Place

100 Jalan Putra
50622 Kuala Lumpur

Melaka

Suruhanjaya Syarikat Malaysia (Negeri

Melaka)
Aras Bawah Menara MITC, Kompleks MITC
Jalan Konvensyen, 75450 Air Keroh, Melaka

Perak

Tingkat 2C, Greentown Mall

Jalan Hospital
30450 Ipoh, Perak

Kedah

Tingkat 10, Menara Sentosa

Jalan Tuanku Ibrahim, 05621 Alor Setar

State

Address

Kelantan

Tingkat 2,3&4, Kota Sri Mutiara

Jalan Sultan Yahya Petra, 15150 Kota Bharu

Terengganu

Tingkat 6-7, Menara Yayasan Islam

Jalan Sultan Omar, 20300 Kuala Terengganu

Pulau Pinang

Tingkat 6-7, Bangunan KWSP, No 3009

Off Leboh Tenggiri 2, Bandar Seberang Jaya
13700 P.Pinang

Pahang

Lot 202-216, Tingkat 2, Block B

Kuantan Centre Point
Jalan Haji Abdul Rahman, 25000 Kuantan

Johor

Podium 4B & 5, Menara Ansar

65, Jln Trus, 80000 Johor Bahru

State

Address

Perlis

Tingkat 8, Bangunan KWSP

Jalan Bukit Lagi, 01000 Kangar

Selangor

Tingkat 3 & 4, Plaza Alam Sentral

Jalan Majlis, Seksyen 14, 40000 Shah Alam

Negeri Sembilan

Tingkat 2, Wisma Fook Loong

Jalan Dato Abdul Rahman
70000 Seremban

Sabah

Tingkat 4, Menara MAA

6, Lorong Api-Api
88999 Kota Kinabalu

Sarawak

Tingkat 2 & 3, Wisma STA

26, Jalan Datuk Abang Abdul Rahim
93450 Kuching

1. Sole Proprietorship
Characteristics
1.
2.
3.

Easy to register.
Own by one
person.
Simple business
structure.
example: Tailor
shops, Beauty
Salons,
Restaurant,
Mini markets
(Retail Sector)

Advantages
1.
2.
3.
4.
5.

Small set-up cost

Easy to manage
Easy to form and
dissolve
All profit will go to
the owner
Not subject too
much government
rules &
regulations
(Financial
statement doesnt
required validity
by qualified
auditor)

Disadvantages
1.
2.
3.

4.

Limited source of
capital
Unlimited business
liability
Business expansion
depend on owner
capability
Life span depend
upon the age and
how efficiently
business
management by
owner

2. Partnership
Definition
A person forms a partnership with one or more

person to carry out a business with a view to

making profits.

Partnership

Establishment

Based on Partnership Act 1961

Each partner consider the company

representative and acts on behalf of the

company
Partnership formation can be verbal or written
agreement. Partnership Act as reference
(Verbal agreement) .

2. Partnership
Characteristics
1.
2.
3.

4.

1< person <20

Professional < 50
Partners share the
capital, profits and
losses
According to
section 6,
Partnership Act
1061: they are
collectively called
a firm

Advantages
1.
2.

3.

Easier to secure
financing
Business
management
and risks,
resources can
divided among
partners
Ideas, talents
and skills can
be pooled
together

Disadvantages
1.

2.

3.

Unlimited
business
liabilities
The life span
depend on the
life span of the
partners
Misconduct or
unethical will
happen if no
Letter of
Agreement is
being made

Registration Guide for Sole

Proprietorship and Partnership
Business
Business Establishment
Notification Adjustment Business
Information
Business Dissolve (Terminate)

Application being rejected:

The applicant does use capital letter
Application form is too dirty or untidy
Corrections are made using liquid eraser
The business is already registered, but the

owner not terminate existing business

before applying the new one
Verification of application form has been
made by unauthorised personnel
The applicant doesnt attach a copy of
licenses or permit.

Business Organization In Malaysia

(Companies Act 1965)

Private Limited Company

Characteristics

Requirements

Membershi
p

Must have at least 2 members Malaysian

nationality, acts as company director and founder.
The members of company will appoint the Board of
Director.

Liabilities

Limited to the total shares contributed.

Personal assets not affected.

Right and
Responsibili
ty

It can acquire assets under its own name.

Take legal action and face legal action under its own
name.

Business Organization In Malaysia

(Companies Act 1965) - continue
Private Limited Company
Life Span

Not dependent upon the death or resignation of

it members.
Dissolved when its members no longer
interested.

Business Organization In Malaysia

(Companies Act 1965) - continue
Private Limited Company

Terms & Conditions

Member not exceed 50 people.
Transfer ownership of members share with the approval

BOD.
Not allowed to offer or sell any share or debenture to
public.
Not allowed to offer public to deposit money within
stipulated time frame.
Use the word Sdn. Bhd. atau Sendirian Berhad at
the end of its name.

Business Organization In Malaysia

(Companies Act 1965) - continue
Private Limited Company
Advantages
1.

2.
3.
4.
5.
6.
7.

Funds easy acquire through

exchange of share ownership
or loan from financial
institution.
All shareholders are legally
protected by law.
Shareholders are not burden
with mgmt of business.
Liabilities limited to the capital
contribute to company.
Life span is not depend on age
or resignation its members.
Greater potential for
expansion.
Legally, it one business entity

Disadvantages
1.
2.
3.
4.

5.
6.

Subject to more rule &

regulations.
Shares cant traded
through share market.
Must pay corporate tax.
Qualified Auditors must
audit yearly financial
stat & stat complete,
updated.
Financial affairs must
transparent to public.
Cost setting up is high.

Business Organization In Malaysia

(Companies Act 1965) - continue
Private Limited Company
Members

of Shareholders
Board of Directors
Secretary
Auditors
Registered Office
Company Seal
Authorisation Letter

Private Limited Company

- Registration Procedure

Registration Fee (Based in Authorised capital)

Authorised Capital

Fee (RM)

Nominal share capital RM100,000

1,000

> RM100,000 Nominal share capital

RM500,000

3,000

> RM500,000 till RM1 juta

5,000

>RM1 juta till RM5 juta

8,000

>RM5 juta till RM 10 juta

10,000

> RM 10 juta till RM 25 juta

20,000

> RM 25 juta till RM 50 juta

40,000

> RM 50 juta till RM100 juta

50,000

> RM 100 juta

70,000

2. Procedures & Legal Aspects

Business

Licences

Wholesaling

Manufacturing

Foodmanufacture

Localauthorities
Saleinlargequantities
Manufactureactivities
>RM100,000paid-upcapital

Foodprocessing-PBT

SalesTax

Imported&localproductsexemptedtax

Excise

manufactureproductssubjecttoexcise
tax(car,softdrink,cigarette)

Procedures & Legal Aspects

(continue)
Transportation ApplytoCommercial
VehiclesBoardunderMECDaccordingto
differenttypes:Taxis,school&factory
buses,lorry(AorCclass)

Letter of Authority
Thecert.offitness(CF)
issuedbylocal
authorities

Permit

Foreign Workers
Plantationsector,retail,
constructionneed
approvalfromKSM&
meetrulesImmigration
Dept.

Procedures & Legal Aspects

(continue)

Assembling

of Machinery & Equipment

Factory

and Machinery Act 1967

(Amended 1974), provide workers
safety, health and welfare at the site
installation of machinery and equipment

Pollution
The

Control

Quality Environmental Act for plant

design, layout and installation of pollution
control.

Procedures & Legal Aspects

Business

(continue)
Rights

Trademark

Protection

The

Trademark Act protects from unhealthy business

practices (product imitation)

Patent

Protection

The

Patent Act 1983, provides registration of design

(maratus, articles, tools, materials and composition.
Application to Registrar of Patents made through
agents registered with Office of Patent Registration,
Ministry of Domestic Trade & Consumer Affairs.

Copyright
The

Copyright Act 1987, to protect businesses,

writers, composers and broadcasters in the area of
literature, music, art, sound recording and broadcast
programs.

Procedures & Legal Aspects

Standards and (continue)
Quality (SIRIM)

Recognition to quality prod & services. Different types

of quality standards are given to business entities
based on products, system, services and environment
management.

Hire

Purchase Act

The Hire Purchase Act 1967 (Amended 978) control

the forms and contents of hire purchase agreement.
Assets covered

Vehicles
Radios,TV, cassette recorders or any combination of the items
Refrigerators, freezers or combination of both
Sewing machines or Air-Conditioners other than for industrial
use
Vacuum cleaners
Gas, electric cookers and ovens

Down payment (20%), balance finance companies on

installment basis

Procedures & Legal Aspects

(continue)
Workers Social Needs
Employee

Provident Fund Act 1961 (KWSP)

& Workers Social and Safety Act 1991
(PERKESO).

Infrastructure

Needs

Basic

facilities & infrastructure (TNB,

Telekom, JBA)

Import

& Export Regulations

Approved

Permit (AP) from Ministry of

International Trade and Industry (MITI) and
Royal Custom & Excise etc.

3. Business Supports In
Malaysia
Courses,Seminars
&workshops
ExtensionServices

Technical
Assistance
Marketing
Assistance

AdvisoryServices

Entrepreneur

FinancialAssistance
Research&
Development

Infrastructure
Assistance
Information
Assistance

Business Supports (continue)

Technical Assistant
To expose production methods and systematic

management. Agencies involved such as SIRIM,

MARA,Multimedia Development Corporation S/B
(MDeC), MARDI, RRIM, MPOB ,FRIM, Jab.
Pertanian and Jab Perkhidmatan Haiwan.

Marketing Assistant
Help entrepreneur distribute an market their

products locally or internationally. Agencies

involved such as MITI, MATRADE, FAMA.

Infrastructure Assistant
Getting business premises. Agencies involved

such as MARA, SEDC, SIRIM, UDA, KPLB, SME

Bank dan MITI

Business Supports (continue)

Information

Assistance

Business opportunities, statistics, new research

findings, technology research etc. MITI,

MATRADE, MARDI, SIRIM, FRIM & IPTA

Research

and Development

Project feasibility studies, market research and

technology related studies. MARDI, SIRIM, IPT.

Financial

Assistance

Provide financing facilities to implement business

ideas. Commercial banks, merchant banks,

licensed banks, related governments such as
MDec, SMIDEC (emanufacturing ICT grants
scheme), SME bank.

Business Supports (continue)

Advisory

Services

Managing business training and

consultation. Tax deduction from HRDF,

Ministry of Human Resources.

Training,

Seminars and Workshops

Consist of management training, efficiency,

skills, motivation etc. MITI, PUNB, MARA,

MFA (PFM), SEDC & Financial Institutions.

o Extension Services
MDec, MITI, SIRIM, MATRADE, MARDI, NPC to
ensure implementation of proposed projects
(follow-up services).