Sole proprietorships are high-risk but high-reward business structures. Sole proprietorship are businesses in Malaysia which are owned by just one individuals. Owners of sole proprietorship experience unlimited liability which means that if the business fails to survive or declares bankruptcy, creditors will be able to sue the business owners for all the debts which are owed. Thus, the personal assets, personal income, and employment status of the owner are put at risk.
However, sole proprietorship owners who successfully overcome these risks stand to gain significant benefits. To successfully run a sole proprietorship less paperwork and fewer additional legal formalities are required, thus easing the registration process. The cost of incorporation is much lower; thus, profits are usually relatively high. The Malaysian government exempts sole proprietorship from certain audits. They are also not required to disclose their financial statements to the public. Furthermore, those who plan to convert their sole proprietorship into a Sdn Bhd company will find it easy to do so
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