There are numerous way to commence a business and one of it is by forming a private limited company (in Malaysia its also known as Sendirian Berhad or in short Sdn Bhd).
By using a Sdn Bhd for your business, you actually separate your assets/debts and the company's assets/debts. This is known as separate legal entity protection. In short, whatever debts owed by the company can only be claimed from the company and not from the owner. Unless of course, a personal guarantee is given by the owner.
A Sdn Bhd also portray a more reliable and trustworthy image as compared to a sole proprietor. This is due to few reasons and one of it, is due to more stringent compliance by the Sdn Bhd such as having an annual audit of accounts and annual return submitted to the Registrar of Companies.
Should you wish to grow and expand your business in the future and/or would like to borrow or raise funds from the Bank or venture capitalist or from the public, a Sdn Bhd would be a the preferred vehicle.
These are some of the reasons that most of the entrepreneurs choose to incorporate a company to run their business.
Whether you are already in business or thinking to commence one in Malaysia, get in touch with us to know more.
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