Top Reasons to Incorporate Your Business

 There are several types of businesses that can be set up and run for specific purposes, most noticeably, to make profits. These types can be classified into sole proprietorship, partnership, limited partnership, incorporation, Limited Liability Company (LLC), non-profit organization, and cooperative. Among these types, incorporation comes with many advantages such as protecting assets from legal suits and creditors. It is a legal process to form a corporate company or entity and separates its assets and income from the investors and owners. Whether it is company incorporation in Malaysia or elsewhere, the resulting corporate is identified by terms such as ‘Inc.’ or ‘Limited or Ltd.’  In simple terms, incorporating a company involves declaring it a separate entity from its owners. 

In Malaysia, most start-ups begin their journey as sole enterprises or proprietorships. However, with business expansion, such sole enterprises can face increasing challenges or risks, which may overwhelm the limited benefits they may accrue. 

Reasons to get new company registration Malaysia

The many reasons why businesses should go for company registration Malaysia are as follows:

Separating owner from business: In a sole proprietorship, you shall be responsible for signing business contracts or even taking credits or loans. In other words, you will not be able to separate yourself as the owner from your business, and all debts, risks, and liabilities will be your responsibility. So, in case your creditor seeks action against you or a customer sues your company, you shall be personally responsible to address the issue and your personal savings and assets will be at risk. However, if you incorporate a private limited company through SDN BHD registration Malaysia, your business will become a separate corporate body wherein you and the shareholders will be protected from any personal liability. In such a case, no court judgement or creditor can seize your assets to meet the company’s liabilities. 

Tax benefits: Private limited companies often receive tax sops or benefits, which may not be available to the individual taxpayers. The tax sops are generally given to facilitate the setting up of businesses. So, by following the process of company incorporation in Malaysia, your business may get additional tax deductions.  

Better funding: Third party investors prefer working with corporations rather than with sole proprietorship firms. So, unless you have a venture capitalist supporting you it is better to go for new company registration Malaysia and benefit from its formal business structure. Also, with sole proprietorship, you need to keep your assets as collateral for taking a loan or line of credit, which may haunt you in times of difficulties. 

Prevent any misunderstanding: At times misunderstandings may crop up between business partners or founders on the way to split the equity. This can sour the relationship no matter how close. However, if you go for company registration Malaysia, the owners or partners can be issued stocks thereby preventing any probable misunderstandings. 

Conclusion

Whether you go for company registration in Malaysia for foreigner or pursue SDN BHD registration Malaysia, you can accrue several benefits in the long run such as protecting your personal assets from legal suits or creditors. However, once you turn your business into a private limited company, you need to follow the due processes of filing taxes and other obligations to the T.