What are the privileges of Sdn Bhd ownership in Malaysia?
There are many different business types in Malaysia, but why are so many choices to set up a Sdn Bhd? Is Sdn Bhd a better choice to start my business? This will guide you!
Sdn Bhd, also known as Sendirian Berhad is a Private Limited company. A Sdn Bhd company is the only business type that foreigners can establish and completely own. However, for industries such as tourism, banking, agriculture, etc., they do not allow the business to be 100% foreign-owned.
Privileges of Sdn Bhd Ownership in Malaysia
A Sdn Bhd company in Malaysia provides the business owner many legal and financial benefits. Here are some of the privileges that Sdn Bhd owners get to enjoy:
1. Limited liability principle
A Sdn Bhd company will help to protect the personal wealth of the owners. There is financial security to the business owners as there are limited liabilities for a Sdn Bhd company. The business owners of a Sdn Bhd company will not lose any money other than the amount of capital they invested in the company. It protects the business owners against severe financial losses.
2. Simple to transfer the ownership
A shareholder from a Sdn Bhd company is legally allowed to sell or transfer the company share to any people. This business structure raises capital through issuing bonds or equity certificates which accelerate the growth of the organization.
A Sdn Bhd company is a separate legal entity
The financial losses suffered by the company do not cause negative consequences to the business owner. The operations in a Sdn Bhd company will continue up till the disbanding of the company. A Sdn Bhd is also allowed to sign contracts, acquire assets, and file lawsuits against people or entities.
Sdn Bhd companies are flexible and open. They need to be compliant with the governmental reporting requirements enforced in Malaysia. Sdn Bhd companies have the privilege to borrow money from banks at lower interest rates. The bank provides loans to Sdn Bhd companies because they want them to use for business expansion or other business activities instead of any illicit or illegal activities.
Many people have chosen business structures such as sole proprietorship, limited liability partnership, etc., to ease formation and lesser compliance requirements. However, the privileges mentioned above greatly benefits business owners as it allows them to have a stable business structure and protect their assets. It is recommended for entrepreneurs who have intention to grow their business to select a Sdn Bhd as their business structure.
To get comprehensive information on this topic, please refer to What are the Privileges of Sdn Bhd ownership in Malaysia? (https://www.paulhypepage.my/
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