To business owners who have an interest in partaking in the business world of Malaysia, terms “Sdn Bhd” and its pair, “Bhd”, must be not unfamiliar. Sdn Bhd or Sendirian Berhad refers to a private limited company or integrated limited companies while Bhd or Berhad refers to a public company, both based in Malaysia. Currently, most companies are only allowed to operate under an Sdn Bhd flag with its “incorporated limited by shares” concept.
The regulation, however, cannot even be called as a predicament to business owners who like freedom in establishing and running a business through sole ownership. Indeed, an Sdn Bhd in Malaysia or limited company in Malaysia gives so many benefits and, specially, maximum protection to the owner together with the fund s/he invested and her/his personal assets and investment.
Sdn Bhd in Malaysia and Its Benefits
Below are the key benefits of having an Sdn Bhd in Malaysia.
- Protected personal wealth
A Limited Company or Sdn Bhd suggests the separation of company’s assets from one’s personal wealth. The separation gives protection to the partial owner of the company’s personal wealth because s/he has no responsibility for any liability of the company. This type business is less risky than those who allow sole proprietorship in the company.
- Continuous existence
A company consists of many assets, investment, contracts, and other administrative matters with all being managed under the supervision of several shareholders. The stability of the whole entity of the company with sole proprietorship may be disturbed upon the death of its owner. This scene does not happen to an Sdn Bhd where its separate legal allows it to stay existing no matter what until such time the company is dissolved.
- Transferable ownership
The ownership of shares in an Sdn Bhd in Malaysia is transferable. A shareholder can transfer or sell his/her partial or entire part of shares to a different individual – a family member or someone who is willing to pay high price.
- Lower corporate tax rates
The corporate tax rate is lower than the individual tax rate. By separating the company’s assets from personal wealth, the total tax that must be paid by a shareholder will be lower.
- Better access to capital
An Sdn Bhd is able to raise money easily through some options such as issuing bonds or share certificates through investors. Besides, borrowing money at low rates is also easy because loans to Sdn Bhd are considered less risky than those to other forms of business.