BUSINESS

OWNERSHIP
MUNIRAH MIHAT
FACTORS IN SELECTING A BUSINESS
OWNERSHIP
Capital
• If the individual possesses a
small amount of capital, he
should venture in a sole
proprietorship
• It because the cost forming
company is relatively high.
• Capital also determines the
probabilities to obtain credit or
loans from external sources.
Span of control
• Sole proprietorship have full
power and authority in carrying
out his business.
• In a partnership , the span of
control is shared among all
partners.
Personal assets
• Personal assets are liable to the
creditor if losses are incurred
either in a sole proprietorship.
• Companies is a separate entity.
Sharing of information
• If an individual decides not to
share information with his
counterparts, it is advisable to
form proprietorship.
• In partnership, no confidential
information among partners,
members of the company or
creditors.
Types of Business Ownership and
characteristics
Business ownership in Malaysia can be categorized
into four types

Businesses established under the Business

01 Registration Act 1956 (Amendment 1978) and
the rules of the Registration of Businesses Act
1957.
Businesses established under Company
02 Law 1965

Businesses established under Co-

03 operatives Act 1948

Businesses established under Parliament

04 Act and State
Government Enactment.
TYPES OF BUSINESS
Sole Private
Proprietorship Limited
Company

Partnership Public
Limited
Company
 Sole Proprietorship

Section 4, the Business Registration Act 1956

defines a single business as a business
established, owned, financed in terms of finances
and management handled by a single individual.

It usually involves a small-scale business.

Examples of business sole proprietorships are tailors,

beauty salon, convenience store and laundry
Sole Proprietorship
Capital
Require a small capital.
Registration
Establishment Ease to register
Business established under
Business Registration Act 1956 The distribution
of profits and
(Amendment 1978)
losses
Owner will own and
bear all profits and
losses derived from
business.
Possession (pemilikan)
Business period / life
Sole proprietorship
owned and operated by Business life is not
one person only guaranteed.
Dissolution would
happen if a disaster
upon the owner
Section Break
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Sole Proprietorship
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Advantages
 Your Text Here Disadvantages

Easy to manage Limited capital

Liability is not limited to - personal

formation and dissolution is easy property can be used to cover liability
Business profits will be the overall Business Development limited -
owner depending on the owner

Business Development limited - Business life is not stable / vulnerable

depending on the owner
 Partnership
According to section 3, the Partnership Act,
defines a partnership as the relationship
Possession that exists between those who do business Establishment
with for profit.
This business is owned Registered pursuant to
by more than one and Business Registration Act
not more than 20 1956.
people.
Business establishment
Form of business must comply matters
which are under the
professionals such as
Partnership Act 1961.
legal services,
accountants and Avoid any confusion or
architects, the misunderstanding,
membership can be between partners is good
increased up to 50 if held Deed or the
people. Partnership Agreement
Contract
Features
 Partnership
Registration Capital

Establishment of Partners do business

business is simple together and share
capital.

Total capital contributions

by partners are
determined based on the
discussions between
them.

Features
 Partnership
Profit & Loss Distribution Business Life
business

Business life is not

According to the guaranteed. It can be
Partnership Act 1961, dissolved if one partner
all gains and losses dies, retires, on the
earned by them must instructions of the court or
be divided equally the expiration of a contract
between the partners.

In addition, the ratio

can be determined by
agreement between
the partners

Features
Partnership
Advantages
Disadvantages
 Your Text Here
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Ease of establishment

easy to get credit financing
More capital resources than sole
proprietorships
Business risk is spread
The burden of income tax is low
The action of a partner can involve all the
partners.
Capital is still limited.
The existence of non-permanent
partnership.

Established division of labor and Prone to misuse power

specialization.
Simple occurrence of conflicts
Limited liability of limited partners. (According to between partners.
the total capital partners)
 Limited Company

Company Limited under discussion here is a

Company Limited by shares.

It consists of two types: Private Limited

Companies and Public Limited Company
Private Limited Company
Establishment Registration
Possession

FEATURES
The company This business Business establishment
may be formed establishment must is more difficult
by two persons comply with the compared to other
and a maximum matters covered under business. Establishment
of 50 students the Companies Act procedures must comply
only 1965. States must use with the subject matters
the word "Sdn" or under the Companies
Content here "Limited" at the end of Act 1965. It has a
its name. foreign name in its own
name
Private Limited Company
Distribution Profit &
Business Life Capital
Loss

FEATURES
All profits are the business life is more The accumulated capital
property of the secure. It does not of the Company limited is
company. greater than other types
depend on the
Shareholders will of business. Capital
members where the raised through stock
receive distribution of business will continue
profits through issuance. States should
Content here to exist despite not make an invitation to
dividend payments
changes in the death the public for subscription
of a member of any shares.
Private Limited Company
Disadvantages
Advantages
 Your Text Here  Your Text Here
Company shares can not be trade in the stock
Easy access to financial resources market.
through changes of ownership of shares
or financial institutions. The Company is subject to tax business
Shareholders are not burdened with
business management Financial statements must be audited by an
auditor of a person appointed and the documents
Liability of members of the company is must be complete and updated
limited to the capital contributed.
Business span does not depend on the People can know the financial affairs of the
company.
age of its members.
The Company may sue and be sued in its The high cost of establishment
name because it is a separate entity
These companies must comply with all provisions
of the Companies Act 1965
 Public Limited Company
Characteristics of a There is no limit for
public limited company is The difference is in terms
of business ownership. those wishing to
quite similar to the become members or
characteristics of a shareholders of the
Private Limited company of this type.
Company.
.

Shareholders are free to buy and

sell shares on the stock market
without the need for approval from
anyone.
Other matters such as
formation, company
registration, According to the law, at
distribution of profits the end of each name
and business is the of a public limited
same life expectancy company must be
as a Private Limited written the name
Company. “Berhad".
Public Limited Company
Advantages Disadvantages
 Your Text Here  Your Text Here

Easy to raise capital through the issuance

Establishment of a public limited company is
of more shares to the public.
more complicated and expensive.
Business is a more permanent
existence.
Business management is more complicated.
Stock performance easily transferable This is because it is regulated by law.

Business activities may be conducted on

a large scale. (Economies of scale) Possession and management are separate
Liability incurred by the members is
limited.
Bear a high tax
Sole proprietorship and partnership registration

Form PNA.42 – To display the Certificate of

Application for Registration of Business Changes in business
Approval of Business information - Form B (P. NA
Name 2)
(3 proposed name) -inform within seven days of
it happening
Applicants complete and submit Termination – Form C
Applications should be
Form A To Register Business made to renew the
-The applicant shall submit the certificate each year
information and personal details using Form A1
- For a partnership, all partners of
the information to be filled
Private Limited Company Registration
Second: Provide the following documents as
soon as the establishment of the company
First: Apply for permission to use the name approved by the Registrar of
proposed business name - Companies-
Form 13A - This document must be submitted within
three months from the date of approval.

Applications should be made to Memorandum of Company -

suggest the company name using Good Bad Document that will inform the
the Form 13 A in duplicate to the Efficacy Efficacy activities of the company and
Registrar of Companies. the powers and limitations.

The proposed name must be one Articles of Association, document

hundred percent in Malay or that outlines the internal
English and not exceed 50 management policy and the rights
characters including the word and responsibilities of the Board
'Limited'. of Director
Private Limited Company Registration
Form 6
Statutory Declaration of
compliance of all regulations
Form 24
Form fraction of shares allocated
Form 44
Notification of a registered office
address.
Statutory Declaration
Form 48A, before the
appointment of a
director or promoter Form 49
Statement of particulars of Directors,
Managers and Company Secretary.
FORMS Form 9
Certificate of Corporation
Account.
The applicant must pay the
registration-payment amount
depends on the authorized share
capital
Thank you
MUNIRAH BINTI MIHAT