April 16, 2010

The Differences of Business Entity

SOLE PROPRIETORSHIP
  • Owned by a single individual.
  • Business is dissolved when owner dies. No transfer of ownership is possible.
  • Does not need to submit any financial reports.
  • Unlimited liability - owner is obliged to pay for all business debts from his personal assets if need to.
  • All profits and losses are borne by owner unlimited

PARTNERSHIP
  • An association of two or more individuals.
  • Ownership can be transferred through transfer of shares by either sale or inheritance.
  • Submit financial reports to the Companies Commission of Malaysia (CCM)
  • Risk and profit share is determined by partnership agreement.
  • Profits are divided according to the partnership agreement.

COMPANY
  • It is a legal entity and is owned through ownership of shares.
  • Ownership can be transferred through transfer of sales by either sale or inheritance.
  • Must submit financial reports to the CCM and if listed Securities Commission (SC)
  • All shares are limited liability - risk is limited to amount of money invested in the shares.
  • Owner profits from dividends or sale of shares

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