Everyone should familiar with company right? But what is company?
"A company is a form of business organization"
Business is activity to provide goods or services at a profit. Every business carried on for the purposes such as trade, commerce, craftmanship, profession must be registered.
In Malaysia, main statute of Company Law is "Companies Act 1965". The Act enables an association of persons to form various types of corporate organization known as registered company. In addition to protecting the right and interests of shareholders in particular and investors in general, this Act also provides facilities for the incorporation of companies, its constitution, its relation with members and creditors, management and winding-up.
3 types of business entitled in Malaysia:
- Sole Proprietorship
- Owned by one person.
- Can have large number of employees
- Simplest form of business organization with minimal legal requirements
- Only Malaysian citizen and permanent resident can register business as sole proprietorship
- Registration of Businesses Act 1956 is applicable
- Example: Laundry
- Partnership
- At least two persons agree to carry on a business in common with a view to profit
- The legalities required to set up a partnership are minimal and is similar to that of sole proprietorship
- Does not exist as a separate legal entity
- Normally spring up between friends
- However, it is advisable to have a formal Partnership agreement drawn up by a solicitor. The agreement should state the responsibilities of each partner, on what grounds and how the partnership may be terminated and the procedure for dealing with disputes between the partners
- Only Malaysian citizen and permanent resident can register business as partnership
- Partnership Act 1961 applies
- Example: Dental Surgery
- Company
- A company is a legal entity that is separate and distinct from its members and shareholders. When a company is formed, it is said to have become "incorporated"
- A company is capable of owning property, making contracts, employing people and being sued or of suing
- Unlike sole proprietorships or partnerships, companies have continuity of succession, as it is unaffected by the death or incapacity of one or more of its members
- Example: Sime Darby Berhad
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