1. WEEK 3 BUSINESS RULES & SUPPORTS

2. Lecture Content: Business Formation In Malaysia Rule & Regulation
Business Supports & Assistances

3. Learning Outcomes: Understand business entity govern to Malaysian Law.
Understand rules and regulations need in Malaysia.
Identify strength and weakness in business entity selection.
Be able to register business formation chosen.
Understand the business supports and assistances needed.

4. Establishment of business entities in Malaysia
Business in Malaysia can be registered within four Acts
Business Registration Act (Amendment 1978) and procedures of business registration 1957.
Companies Act 1965
Cooperation Act 1948
Parliment Act or State Ecatment Act

5. BUSINESS ENTITY IN MALAYSIA
Sole Proprietorship I
Business Registration Act
Partnership
Limited Company by Guarantee
Private Limited (Sdn. Bhd) II
Company Act 1965
Public Company (Berhad)
Limited Company by Share
III
Cooperative Act 1948
Foreign Owned Company
Unlimited Company IV
Parliamentary Act & State Government Enactment

6. Companies Commission of Malaysia (SSM)
State
Address
Head Quarter
Tingkat 2, Putra Place
100 Jalan Putra
50622 Kuala Lumpur
Melaka
Suruhanjaya Syarikat Malaysia (Negeri Melaka)
Aras Bawah Menara MITC, Kompleks MITC
Jalan Konvensyen, Air Keroh, Melaka
Perak
Tingkat 2C, Greentown Mall
Jalan Hospital
30450 Ipoh, Perak
Kedah
Tingkat 10, Menara Sentosa
Jalan Tuanku Ibrahim, Alor Setar

7. State Address Kelantan Tingkat 2,3&4, Kota Sri Mutiara
Jalan Sultan Yahya Petra, Kota Bharu
Terengganu
Tingkat 6-7, Menara Yayasan Islam
Jalan Sultan Omar, Kuala Terengganu
Pulau Pinang
Tingkat 6-7, Bangunan KWSP, No 3009
Off Leboh Tenggiri 2, Bandar Seberang Jaya
13700 P.Pinang
Pahang
Lot , Tingkat 2, Block B
Kuantan Centre Point
Jalan Haji Abdul Rahman, Kuantan
Johor
Podium 4B & 5, Menara Ansar
65, Jln Trus, Johor Bahru

8. State Address Perlis Tingkat 8, Bangunan KWSP
Jalan Bukit Lagi, Kangar
Selangor
Tingkat 3 & 4, Plaza Alam Sentral
Jalan Majlis, Seksyen 14, Shah Alam
Negeri Sembilan
Tingkat 2, Wisma Fook Loong
Jalan Dato’ Abdul Rahman
70000 Seremban
Sabah
Tingkat 4, Menara MAA
6, Lorong Api-Api
88999 Kota Kinabalu
Sarawak
Tingkat 2 & 3, Wisma STA
26, Jalan Datuk Abang Abdul Rahim
93450 Kuching

9. 1. Sole Proprietorship Characteristics Advantages Disadvantages
Easy to register.
Own by one person.
Simple business structure. example: Tailor shops, Beauty Salons, Restaurant, Mini markets (Retail Sector)
Small set-up cost
Easy to manage
Easy to form and dissolve
All profit will go to the owner
Not subject too much government rules & regulations (Financial statement doesn’t required validity by qualified auditor)
Limited source of capital
Unlimited business liability
Business expansion depend on owner capability
Life span depend upon the age and how efficiently business management by owner

10. Partnership Establishment
Definition
A person forms a partnership with one or more person to carry out a business with a view to making profits.
Partnership Establishment
Based on Partnership Act 1961
Each partner consider the company representative and acts on behalf of the company
Partnership formation can be verbal or written agreement. Partnership Act as reference (Verbal agreement) .

11. Characteristics Advantages Disadvantages
2. Partnership
Characteristics
Advantages
Disadvantages
1< person <20
Professional < 50
Partners share the capital, profits and losses
According to section 6, Partnership Act 1061: they are collectively called a firm
Easier to secure financing
Business management and risks, resources can divided among partners
Ideas, talents and skills can be pooled together
Unlimited business liabilities
The life span depend on the life span of the partners
Misconduct or unethical will happen if no ‘Letter of Agreement’ is being made

12. Registration Guide for Sole Proprietorship and Partnership Business
Business Establishment
Notification Adjustment Business Information
Business Dissolve (Terminate)

13. Application being rejected:
The applicant does use capital letter
Application form is too dirty or untidy
Corrections are made using ‘liquid eraser’
The business is already registered, but the owner not terminate existing business before applying the new one
Verification of application form has been made by unauthorised personnel
The applicant doesn’t attach a copy of licenses or permit.

14. Business Organization In Malaysia (Companies Act 1965)
Private Limited Company
Characteristics
Requirements
Membership
Must have at least 2 members – Malaysian nationality, acts as company director and founder.
The members of company will appoint the Board of Director.
Liabilities
Limited to the total shares contributed.
Personal assets not affected.
Right and Responsibility
It can acquire assets under its own name.
Take legal action and face legal action under its own name.

15. Business Organization In Malaysia (Companies Act 1965) - continue
Private Limited Company
Life Span
Not dependent upon the death or resignation of it members.
Dissolved when its members no longer interested.

16. Business Organization In Malaysia (Companies Act 1965) - continue
Private Limited Company
Terms & Conditions
Member not exceed 50 people.
Transfer ownership of members’ share with the approval BOD.
Not allowed to offer or sell any share or debenture to public.
Not allowed to offer public to deposit money within stipulated time frame.
Use the word “Sdn. Bhd.” atau “Sendirian Berhad” at the end of its name.

17. Business Organization In Malaysia (Companies Act 1965) - continue
Private Limited Company
Advantages
Disadvantages
Funds easy acquire through exchange of share ownership or loan from financial institution.
All shareholders are legally protected by law.
Shareholders are not burden with mgmt of business.
Liabilities limited to the capital contribute to company.
Life span is not depend on age or resignation its members.
Greater potential for expansion.
Legally, it one business entity by itself.
Subject to more rule & regulations.
Shares can’t traded through share market.
Must pay corporate tax.
Qualified Auditors must audit yearly financial stat & stat complete, updated.
Financial affairs must transparent to public.
Cost setting up is high.

18. Business Organization In Malaysia (Companies Act 1965) - continue
Private Limited Company
Members of Shareholders
Board of Directors
Secretary
Auditors
Registered Office
Company Seal
Authorisation Letter

19. Private Limited Company - Registration Procedure
Registration Fee (Based in Authorised capital)
Authorised Capital
Fee (RM)
Nominal share capital ≤RM100,000
1,000
> RM100,000 Nominal share capital ≤ RM500,000
3,000
> RM500,000 till ≤ RM1 juta
5,000
>RM1 juta till ≤ RM5 juta
8,000
>RM5 juta till ≤ RM 10 juta
10,000
> RM 10 juta till ≤ RM 25 juta
20,000
> RM 25 juta till ≤ RM 50 juta
40,000
> RM 50 juta till ≤ RM100 juta
50,000
> RM 100 juta
70,000

20. 2. Procedures & Legal Aspects
Business
Local authorities
Wholesaling
Sale in large quantities
Manufacture activities >RM100,000 paid-up capital
Manufacturing
Licences
Food manufacture
Food processing - PBT
Imported & local products exempted tax
Sales Tax
manufacture products subject to excise tax (car, soft drink, cigarette)
Excise

21. Procedures & Legal Aspects (continue)
Transportation – Apply to Commercial Vehicles Board under MECD according to different types: Taxis, school & factory buses, lorry (A or C class)
Permit
Foreign Workers – Plantation sector, retail, construction need approval from KSM & meet rules Immigration Dept.
Letter of Authority – The cert. of fitness (CF) issued by local authorities

22. Procedures & Legal Aspects (continue)
Assembling of Machinery & Equipment
Factory and Machinery Act 1967 (Amended 1974), provide workers’ safety, health and welfare at the site installation of machinery and equipment
Pollution Control
The Quality Environmental Act for plant design, layout and installation of pollution control.

23. Procedures & Legal Aspects (continue)
Business Rights
Trademark Protection
The Trademark Act protects from unhealthy business practices (product imitation)
Patent Protection
The Patent Act 1983, provides registration of design (maratus, articles, tools, materials and composition. Application to Registrar of Patents made through agents registered with Office of Patent Registration, Ministry of Domestic Trade & Consumer Affairs.
Copyright
The Copyright Act 1987, to protect businesses, writers, composers and broadcasters in the area of literature, music, art, sound recording and broadcast programs.

24. Procedures & Legal Aspects (continue)
Standards and Quality (SIRIM)
Recognition to quality prod & services. Different types of quality standards are given to business entities based on products, system, services and environment management.
Hire Purchase Act
The Hire Purchase Act 1967 (Amended 978) – control the forms and contents of hire purchase agreement.
Assets covered
Vehicles
Radios,TV, cassette recorders or any combination of the items
Refrigerators, freezers or combination of both
Sewing machines or Air-Conditioners other than for industrial use
Vacuum cleaners
Gas, electric cookers and ovens
Down payment (20%), balance finance companies on installment basis

25. Procedures & Legal Aspects (continue)
Workers’ Social Needs
Employee Provident Fund Act 1961 (KWSP) & Workers Social and Safety Act 1991 (PERKESO).
Infrastructure Needs
Basic facilities & infrastructure (TNB, Telekom, JBA)
Import & Export Regulations
Approved Permit (AP) from Ministry of International Trade and Industry (MITI) and Royal Custom & Excise etc.

26. 3. Business Supports In Malaysia
Courses, Seminars & workshops
Technical Assistance
Extension Services
Marketing Assistance
Advisory Services
Entrepreneur
Infrastructure Assistance
Financial Assistance
Information Assistance
Research & Development

27. Business Supports (continue)
Technical Assistant
To expose production methods and systematic management. Agencies involved such as SIRIM, MARA,Multimedia Development Corporation S/B (MDeC), MARDI, RRIM, MPOB ,FRIM, Jab. Pertanian and Jab Perkhidmatan Haiwan.
Marketing Assistant
Help entrepreneur distribute an market their products locally or internationally. Agencies involved such as MITI, MATRADE, FAMA.
Infrastructure Assistant
Getting business premises. Agencies involved such as MARA, SEDC, SIRIM, UDA, KPLB, SME Bank dan MITI

28. Business Supports (continue)
Information Assistance
Business opportunities, statistics, new research findings, technology research etc. MITI, MATRADE, MARDI, SIRIM, FRIM & IPTA
Research and Development
Project feasibility studies, market research and technology related studies. MARDI, SIRIM, IPT.
Financial Assistance
Provide financing facilities to implement business ideas. Commercial banks, merchant banks, licensed banks, related governments such as MDec, SMIDEC (e–manufacturing ICT grants scheme), SME bank.

29. Business Supports (continue)
Advisory Services
Managing business training and consultation. Tax deduction from HRDF, Ministry of Human Resources.
Training, Seminars and Workshops
Consist of management training, efficiency, skills, motivation etc. MITI, PUNB, MARA, MFA (PFM), SEDC & Financial Institutions.
Extension Services
MDec, MITI, SIRIM, MATRADE, MARDI, NPC to ensure implementation of proposed projects (follow-up services).