BUSINESS COMPANY LIMITED LIABILITY PARTNERSHIPS (LLP)
Partnership Sole Proprietorship
Capital Contribution Partners Own contribution Capital Partners
Ownership Owned by two (2) or more persons but not exceeding 20 persons Wholly owned by a single individual Private Company At least one (1) director who ordinarily reside in Malaysia by having a principal address of residence in Malaysia and one (1) shareholder. Public Company At least two (2) directors who ordinarily reside in Malaysia by having a principal address of residence in Malaysia and minimum one (1) shareholder.
  • At least two (2) persons (wholly or partly, individual or corporate body)
  • Unlimited for the number of partners
Legal Status Not a separate legal entity Not a separate legal entity Separate legal entity Separate legal entity
Liability Party (responsible for debt) Partners Business owner Company (liability is limited to the amount of shares invested or guarantee) LLP
Management Responsibilities Partners Business owner Board of Directors Partners
Personal Liability Unlimited liabilities (jointly and severally liable with partnership) which may include partner's personal assets Liability to owner is not limited to invested capital. It also includes the personal assets of a single owner Private Company Limited By Shares (Sdn. Bhd., Public Company Limited By Shares (Berhad) & Company Limited by Guarantee
  • No liability against directors or shareholders. Liability of members is limited to the amount of capital invested in the company
  • Liabilities incurred by directors or shareholders to the extent of the non-paid capital
Conventional Partnership to LLP
  • The liability incurred is limited to an agreed agreement
  • There is no liability to the partners except for wrong doing or omission or without authority
Private Limited Company to LLP
  • The partner’s liability is jointly and severally with LLP to the extent of the non-paid partner’s capital
Risk Risk contribution to partners Full risk on business owner Investment risk does not involve personal assets Risk contribution to partners
Advantages and disadvantages Advantages:
  • Easy to set up
  • Easy to get capital

Disadvantages:
  • Unlimited liability
Advantages:
  • Easy to set up


Disadvantages:
  • Limited capital
  • Unlimited liability
Advantages:
  • Company shares may be traded with the approval of other shareholders
  • Higher capital
  • Long lifespan (owner and companies are separate entities)
  • Shareholders are protected by law
Disadvantages:
  • Longer procedure of incorporation
  • The cost of incorporation is quite high
Advantages:
  • Limited liability
  • Partners asset is protected
Disadvantages:
  • An LLP must have at least two (2) members. If one (1) member chooses to leave the partnership, the LLP may have to be dissolved.
Taxation Income tax Income tax
  • Corporate tax
  • Income tax on individual shareholders
  • Corporate tax
  • Income tax on individual shareholders
Business Termination / Dissolution of Company Easy to terminate and shorter procedure (no fees required) Easy to terminate and shorter procedure (no fees required) Takes a longer time and procedure to dissolve the company Takes a longer time and procedure to dissolve the LLP

 

 

 

 

 

 

 

 

 

Contact Us

Malaysian Administrative Modernisation and Management Planning Unit (MAMPU),
Prime Minister's Department  
Level 6, Block B2
Prime Minister's Department Complex
Federal Government Administrative Centre
62502 Putrajaya, Malaysia

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