Types of business structures in Malaysia

Types of business structures in Malaysia

There are quite a few things that have to be said about business entities in Malaysia. However, it’s also worth noting that every single country has its own corporate legislation which is responsible for governing the different statutes of business entities.

It’s safe to say that Malaysia’s legislative model is similar to those Commonwealth countries’ and the entities that could be differentiated are practically the same. However, there are certain specifications which derive from the overall specific governing of the country. Nevertheless, taking a look at the business structures would allow you to gain more knowledge in this particular regard which is overly beneficial.

Sole Proprietorships

This is the first type of business structure that’s available in Malaysia. Basically it entails a single person running a business by being liable for the conduct of the same. With this being said, if the proprietorship itself gets in debt, the person behind it would be responsible for it and the creditors could lay hands on his own personal property as it’s going to serve as insurance for the obligations of the company. Amongst all, this business structure is the easiest to set up.


Partnerships are separate business structure and they have their own specifications. Right of the bat, the people who would take part in the partnership are going to come into them by signing formal agreements which state their responsibilities towards one another and for the partnership as a whole.

However, when it comes to partnerships, it’s important to note that every single partner is personally responsible for the debts of the partnership to the extension of his own participation in the formation. This is the main difference and it’s a logical one.

Limited Liability Partnerships

Like partnerships, it is a business structure where partnership comes together to build a business. With other aspects similar to partnerships, the main difference of this business structure with partnerships is that all partners have limited liability under this structure.

Limited Liability Companies

The most beneficial thing about setting up a company is that you are protected from personal responsibility by the company itself. It’s basically a completely new judicial entity which enters the market and it’s conducting its own affairs through the actions of the owners and managers. However, the latter are not personally responsible and are only held accountable to the extent of their share in the capital which might be set in advance and altered for the future. This structure normally involved higher statutory cost as it is require to do accountingtax filing and engage a corporate secretary.

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