What is Meant by the Term “Company”?
Some people who are interested in setting up a business have no idea about how they should set up a business entity (Also see Tips for Company Incorporation). There are a lot of forms they can choose from, for example, partnerships, sole proprietorship, limited liability partnership (LLP), limited company, and so on (Also see Types of Business Structures in Malaysia). If you want to start running a business, choosing the right form of business is crucial. If you need help on this, feel free to engage a company registration service in Johor Bahru and get some suggestions from the experts.
There are many forms of company incorporation, and the forms include companies limited by shares, companies limited by guarantee, and unlimited companies. For companies limited by shares (Also see The Differences Between a Limited Company and a Private Limited Company), the members’ liability is restricted to the sum unpaid on shares the members are holding if there is any. For companies limited by guarantee, the members’ liability is restricted to the amount they undertake to contribute if the company is wound up. For unlimited companies, there is no limitation on the members’ liability.
A company should have a name, at least one director, as well as at least one member who has limited or unlimited liability for the company’s obligations. For companies limited by shares, it should have one or more shares.
Both company limited by shares and an unlimited company can be either private or public, while a company limited by guarantee must be public. Also, for companies limited by guarantee, they must not have a share capital.
Besides, one more thing that you need to know is there is a prohibition on unincorporated associations (Also see Mistakes that You Should Avoid When You Start Running a Business). One is not allowed to form a partnership or an association that has more than 20 persons to run a business which aims to earn profits (Also see Are Accounting Treatments for Profit and Non-profit Organisation the Same?) except if it is formed as a company based on under the Companies Act 2016, or it is formed according to other written laws.