1 | Snapshot Comparison
| Feature | Sole Proprietor | General Partnership | LLP | Sdn Bhd (Private Company) |
|---|---|---|---|---|
| Governing law | Registration of Businesses Act 1956 (ROBA) | Partnership Act 1961 + ROBA | LLP Act 2012 | Companies Act 2016 |
| Separate legal entity? | No | No | Yes | Yes |
| Owner liability | Unlimited personal | Joint & several (unlimited) | Limited to LLP assets (partners liable for own negligence) | Limited to paid-up capital |
| Min. owners | 1 Malaysian/PR | 2–20 Malaysians/PRs | 2 partners (person or company) | 1 director + 1 shareholder (can be same person) |
| Registration fee | RM 30 (Personal Name) / RM 60 (Trade Name) | Same as sole-prop | RM 500 one-off | RM 1 050 (name + incorporation) |
| Annual fee / filing | Renewal RM 30/60 per yr | Renewal RM 30/60 per yr | Annual Declaration – RM 200 within 90 days of FYE | Annual Return – RM 150 + FS lodgement RM 50 |
| Audit required | No | No | No (unless LLP agreement requires) | Yes (except dormant/threshold exempt) |
| Tax treatment | Profits taxed in owner’s personal income | Partners’ personal income | LLP taxed at 24 % flat; profit sharing tax-exempt in partners | Company taxed at 15 %/17 % on first RM 150k/600k, then 24 % |
| Statutory secrecy | Low (NRIC public) | Low | Medium (partner NRIC not public) | High (shareholder % appears only in SSM) |
| Typical uses | Freelancers, micro retailers | Small professional or family biz | Start-ups needing flexibility; JV of professionals | Scale-up firms, VC-funded start-ups, liability-sensitive trades |
| Can raise equity? | No shares | No shares | Capital via partner contributions; no shares | Yes – issue shares, options |
2 | Key Pros & Cons
Sole Proprietor
Pros: Cheapest, 1-day ezBiz registration, simple tax.
Cons: Unlimited liability, no continuity on death, few financing options.
General Partnership
Pros: Pool skills & capital of up to 20 owners, easy setup.
Cons: Partners liable for each other; disputes dissolve firm; cannot admit corporate partners.
Limited Liability Partnership (LLP)
Pros: Combines corporate liability shield with partnership flexibility; no audit; corporate partners allowed; easy conversion from legacy partnership.
Cons: Flat 24 % tax not SME-tier; bankers still learning LLP lending; partners’ changes must be e-filed by Compliance Officer.
Private Company (Sdn Bhd)
Pros: Best for growth—share issues, ESOPs, angel/VC funding; SME tax rates; strong brand perception; limited liability.
Cons: Higher compliance—audit, annual return, MBRS 2.0 filing; directors’ duties strict; costs > other forms.
3 | Costs & Compliance Timeline
| Item | Sole-Prop / Partnership | LLP | Sdn Bhd |
|---|---|---|---|
| Registration | RM 30–60 | RM 500 | RM 1 050 |
| Bank a/c opening | Personal biz a/c | LLP a/c | Corporate a/c |
| Annual filing | Renewal fee (ezBiz) by last reg. day | Annual Declaration (RM 200) within 90 days after FYE | Annual Return + audited FS (see Table of Fees) |
| Books & audit | Basic records; no audit | Maintain accounting records; no audit | Statutory audit ≤ 6 mths after FYE |
| Tax filing | Form B (individual) 30 Apr/30 Jun | Form PT (LLP) 7 mths after FYE | Form C 7 mths after FYE |
| EPF / SOCSO | Optional if hiring staff | Mandatory if staff | Mandatory if staff |
4 | Decision Flow
Need personal liability shield? ─► Yes │ ├─ Want flexible profit-sharing, ≤ 20 partners, no audit? ─► Choose **LLP** │ └─ Need to raise share capital, invite investors, or enjoy SME tax tier? ─► Choose **Sdn Bhd** No liability shield needed │ ├─ Single owner? ─► **Sole Proprietor** └─ 2–20 owners? ─► **General Partnership**
5 | Conversion Pathways
- Sole-Prop / Partnership → LLP – straightforward via MyLLP; assets & liabilities vest in LLP automatically.
- Sole-Prop / Partnership / LLP → Sdn Bhd – treat as business transfer; sign sale & purchase agreement, register new company, then terminate old business.
- Upgrade liability early—creditors’ consent easier before debts accumulate.
6 | How We Can Help
- Structure advisory – compare tax, liability, financing impact.
- End-to-end registration for ezBiz / MyLLP / MyCoID.
- Annual compliance packages: renewal, declaration, audit, MBRS.
- Seamless conversion & asset transfer documentation.
Last Updated: 28-Apr-2025