Should I start my business by registering an enterprise or a sdn bhd?

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We have always been asked by our clients when they visited to our office, “should I start my business by registering an enterprise or a sdn bhd?”

Now, ask yourself on the following questions before making any decision:

  1. How much capital do I need to have for my new business?
  2. How much sales I can generate for the first year?
  3. How much profit I can earn for the first year? 
  4. Do I need to hire any staff?
  5. Do I need to setup an office?
  6. Am I going to tender any project under the new company?
Case 1 
  1. I need RM30k to start my business
  2. I am looking for RM200,000 sales in first year
  3. I think I can get RM50,000 profit
  4. No, I will not hire any staff at the moment
  5. I will work from my home at the beginning
  6. No, I sell my service/product to end users

Advice: You can choose Enterprise (Sole Proprietor/Partnership)

Case 2

  1. I need RM100k to start my business
  2. I am looking for RM500,000 sales in first year
  3. I think I can get RM100,000 profit
  4. No, not at the moment but will hire staff when business grows
  5. I need to setup a proper office
  6. No, I sell my service/product to end users
Advice: You can consider to form a sdn bhd company for your new business.

(Image: Ambro / FreeDigitalPhotos.net)

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17 COMMENTS

  2. Hi Salleh, you may need to look into your employment contract/letter whether it is expressly stated that you are not allowed to be involved in other business activities other than your full time employment. Generally it is not stated in normal situation in Malaysia.

    It is OK to have your own business if the employment letter has not stated you can not do so and your business does not affect your performance in the current employment with your company.

  4. Legally, you should register a company with SSM either in the form of Sole Proprietor (Enterprise), at least.

    However, if the amount is not material (less than RM10k or so), it is your call whether want to register or not.

  5. i own a Sdn Bhd company & would like to change to Sole Proprietor. What procedure should i do?

  8. Hi Jamailuddin, it is not required to have paid-up capital for sole proprietor or partnership.

    I shall assume that you are referring to capital of sole proprietor/partnership, you can have any amount of capital for the business and it is not restricted by any laws.

  9. Can I register a sdn bhd company directly with SSM?

    I saw SSM website that we can register a company within 1 day? Is that mean i can register a sdn bhd company within 1 day?

    Appreciate if you can clarify. Thank you.

  10. Dear Angelina,

    I am planning to register business under Sole Proprietorship. However, I am not going to run the business but my husband who is not a Malaysian Citizen will. Currently he has a 5 year visa in Malaysia. May i hire him as my employee to run the business. Please advise.

    • Yes, Rina, you can hire him as your employee/manager/general manager and to empower him to represent the company to conduct all business matters or to make all business decisions on behalf for your company.

  12. Hi, I am planning to register a business under a sole proprietorship. I am then planning to use this to hire foreign expats as my business would require me hiring them. Can a sole proprietorship hire foreign workers? Can they get a working visa if I apply one for them through my business or does it have to be a sdn bhd.

  13. Dear Angelina,
    I have a business under Sole Proprietorship. And I am getting some foreigners to invest in my business. Currently they have Residence Pass (5 years) in Malaysia. May i hire them as my employees to help run the business. Please advise.

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