Advantages of Having Sdn Bhd Company in Malaysia
Here you have your personal wealth being protected. It is the obvious reason Malaysians start a limited liability company because there is financial security that comes with the business. The company’s shareholder will only be liable for debts accrued by the company in accordance with their levels of investment and not any more than what they can shoulder. The worst that can happen to you is losing all your capital invested in the company. Ultimately, this gives a sense and feeling of security for investors in the company. Therefore, grab the chance for register a new Sdn Bhd in Malaysia without risking your personal wealth and assets.
Separate Entity for Perpetuity
A company is deemed to be a separate legal entity from its owners. Its separate legal entity allows the company to exist beyond its founders, directors or shareholders. Death or retirement from the company will have no effect as the company will continue to exist and operate, until such time that the company is dissolved. It means it has the same rights and obligations as a natural person, to acquire assets, enter into contracts, sue or get sued.
Partnership and sole proprietorship cease to exist upon the death of its owners, this is not the case with a company. This enhances stability, and therefore, plan for long term investment.
Separate Entity for Transferability of Ownership
A shareholder of a limited company in Malaysia is allowed to sell or transfer shares, partially or entirely to any desirable person with contractual capacity and is willing to pay a high price. This can be your spouse, family members or any other willing and able party. This is not the case with other entities for instance partnership or sole proprietorship because with them it involves selling the entire business and discontinuing the operation.
Lower Corporate Tax Rates
Limited companies receive a lot of tax advantages especially amnesties and tax waivers. They are only taxed, based on their profits unlike the case with partnerships and sole traders and which are subjected to higher tax rates. It is also possible to use the limited company form to benefit the members, directors and their interests. Currently companies that have less than 2.5 million share capital are taxed as follows:
Whereas maximum individual tax rate is at 26%
Increased Access to Capital Funding
Any business needs an adequate supply of financial resources and immediate replacement in case of depletion. It is easier for companies to raise money as compared to sole traders or partnerships. This is wholly achieved by issuing bonds or share certificates to investors. This means expansion for the business. In terms of accessing loans, a Sdn Bhd Company is allowed to borrow money at lower rates as compared to other types of businesses. Financial institutions tend to view loans to companies as less risky compared to other business entities
Good Market Perception
The general business community and investors perceive Sdn Bhd companies in Malaysia to be more stable and transparent when compared to sole traders and partnership. The companies tend to operate on an open policy and have stringent reporting requirements, and therefore are less fraudulent.
Making Use of your personal car
As the owner of a limited company, you can use your personal car for business purposes. This will make you reap big when you charge the cost that arises from business travels to the company. Other benefits accrued will be the tax-free fuel, and the costs are deductible to the company.
Using your house as the office
Setting up a company in Malaysia is expensive. Especially with increased accommodation costs, it will take time before one acquires office space. Alternatively, you can run the business from your house and claim back for the cost of doing so. Consider all the operational costs and other related expenses and claim back this expenses from the company.
Flexibility in Personal Income
In company operations, one is able to vary the mix of personal income and determine the salaries, directors fees, bonus, dividends and other benefits.as the business owner you also dictate how much to be reinvested into business operations.
May offer Employment for family members
Have ever thought of this? Instead of spending time and resources in hiring, your spouse and family members can act as staff or directors. The income from the company can also be turned into their own income. This creates efficiency in tax systems.
Certain benefits-in-kind, e.g. motor car can taking advantage of prescribed scales. Many benefits are taxed on a more favorable basis for employees, including directors, than for the Enterprise.
EPF or Approved Schemes
For Contributions to EPF to give tax deductions for both employer and employee contributions. As an enterprise, your relief is limited to the available employee.
This is a small issue, but there are some variances in the accounting process of the deductible expenses including charitable donations, use of home as office and things like entertaining expenses. For the private limited company, they can claim such expense as valid. Such cannot be claimed in the sole traders and are treated as personal expenses.