There are 4 main types of business entities in Malaysia. The following table will outline the key characteristics of each business entities:
| Sole Proprietorship | Partnership | LLP | Sdn Bhd | |
| Capital Contribution | Own | Partners | Partners | Share Capital |
| Legal Status | Not separate legal entity | Not separate legal entity | Separate legal entity | Separate legal entity |
| Business Ownership | Owner | Partners | Company | Company |
| Debt Liability | Owner | Partners | Company | Company |
| Business Management | Owner | Partners | Partners | Board of directors |
| Personal Liability | Unlimited personal liability | Unlimited personal liability (jointly & severally) | Limited liability (partners not personally liable for debts) | Limited to unpaid shares |
| Ownership | Single owner | 2 - 20 partners | Min 2 partners | 1 - 50 shareholders |
| Annual Compliance | Minimal (renewal with SSM) |
Minimal (renewal with SSM) |
Annual Declaration | Annual Return, Audit Report |
| Taxation | Personal income tax rates (0% to 30%) | Personal income tax rates (0% to 30%) | Corporate income tax rate: 150k - 15% below 600k - 17% above 600k - 24% |
Corporate income tax rate: 150k - 15% below 600k - 17% above 600k - 24% |
| KEY Features | Low cost due to no annual filing requirement | Low cost due to no annual filing requirement | Lower cost than Sdn Bhd as no audit requirement | Require annual retainer fee such as Secretary fee, Accounting fee, Audit fee and Tax Agent fee |
| Suitability | Small businesses, freelancers | Small businesses with trusted partners | Professionals (e.g., lawyers, accountants) |
Medium/large businesses, scalability |
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