A Sdn Bhd company is a business entity with limited liability. This business entity structure is the best choice for an experienced entrepreneur in Malaysia. Sdn Bhd companies also have certain unique benefits. For example, the liability of a Sdn Bhd company is limited. An entrepreneur’s personal wealth is therefore protected if the business suffers severe losses or fails. Another major advantage of Sdn Bhd companies is that of superior management and regulation. Tax planning is also easier because the company is a separate legal entity. A Sdn Bhd company’s business continuity never ends. This is because such a company will exist even if the primary owner dies, quites, or relinquishes ownership in any other manner. It is also relatively easy to get a loan to finance a Sdn Bhd company, and accounts of such companies are generally reliable and trustworthy.
However, it should also be noted that it is relatively expensive to set up a Sdn Bhd company when compared to the setup of other business entities. Another disadvantage suffered by Sdn Bhd owners which partnership owners do not experience is the fact that standard tax rates apply. Tax rates are not set in such a way so as to suit the owners’ own income levels. Incorporation of a Sdn Bhd company with SSM is also generally more complex when compared to incorporation of a sole proprietorship or partnership.
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