In this blog, you will learn the benefits of converting a sole proprietorship/partnership to a Sdn Bhd company.
Most of our Bizsy clients began successfully as a sole proprietorship for a few years. As time goes by, they have gained clarity on their future business development, and the next important step would be converting the business’s operation into a Private Limited Company (Sdn Bhd). After successful registration, you can expect the following benefits from this lifelong investment:
The concept of limited liability means your personal wealth is protected even if the business suffers severe losses or fails the primary reason why most of Malaysia’s entrepreneurs choose to start with a Sdn Bhd company. Sdn Bhd company’s business continuity never ends. A Sdn Bhd company will exist even if the primary owner dies, quits, or relinquishes ownership in any other manner. Sdn Bhd company is excellent for succession plans, and you must consider converting to a Sdn Bhd company if you plan to scale your business into a more solid form.
You are entitled to certain tax advantages if your business is a Sdn Bhd company. They are only taxed based on their profits and are therefore not required to pay any additional taxes.
Any form of business needs an adequate amount of capital funding. It will be easier to get financial support from banks or even raise money from investors if you own a Sdn Bhd company. Sdn Bhd companies are allowed to borrow money from banks at lower rates when compared to prices paid by other business entities. Financial institutions tend to view loans for Sdn Bhd companies as less risky compared to loans for different business entities.
Many sole proprietors face difficulties in doing business on a larger scale because the perception is less favourable than if they were to do it with a Sdn Bhd company. Nevertheless, it is also more difficult for sole proprietors to attract quality employees who are ambitious and commit to the growth of the business.
If you are ready to convert from sole proprietorship or partnership into Sdn Bhd company, reach out to our business specialist to get started.