Sole Proprietorship

Sole Proprietorship

What is Sole Proprietorship?

Sole Proprietorship registration is the most common and simplest legal business structure option in Malaysia. Sole Proprietorship is governed by Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) and Registration of Businesses Act 1956 .

A Sole Proprietorship is a business wholly owned by a single individual using personal name as per his / her identity card or trade name. To register a Sole Proprietorship, the business owner must be Malaysian citizen or permanent resident. Foreigner and corporate legal entity are not allowed to register sole proprietorship in Malaysia.

Unique features of a Sole Proprietorship like fast and easy registration, no corporate tax payments, less formal business requirements, winding up easily and lowest annual maintenance (Compare to other business vehicle such as Private Limited Company (Sdn. Bhd.) or Limited Liability Partnership).

It is suitable for newly start up business owners to try their new business strategy or explore into new market. Business owners may subsequently transform their business into Private Limited Company (Sdn. Bhd.) if they feel their businesses are stable/ aim to do bigger business. Sole Proprietorship will transform to Partnership if there are additional partners joined the Sole Proprietorship.


Complete SSM Form

You need to visit nearest SSM with your photocopy IC and fill in the business registration form. It can be obtained at SSM counter


Conduct Name Search

SSM officer will check on availability of your proposed business name


Pay Annual Fee

Once everything confirmed, you need to pay your annual fee as follow:

  • a) Trade name – RM60 per year
  • b) Personal name – RM30 per year
  • c) Branch (s) – RM5 per year each


Your Company Is Ready

The business registration certificate can be obtained at SSM counter within 1 hour after payment made

Information Required for Sole Proprietorship Registration

  • Copy of business owner identity card (I/C)
  • Proposed business name
  • Proposed nature of business of the proposed business
  • Proposed business address
  • Letter of approval from Government Agency (if applicable)

Advantages of Sole Proprietorship

You are the Boss

A Sole Proprietor has complete control and decision-making power over the business. All profit will go to business owner pocket directly.

No Corporate Tax Payments

Sole Proprietorship is not a legal entity, all its chargeable income will be taxed at business owner personal income tax.

Lowest Annual Cost

Compare to Private Limited Company (Sdn. Bhd.),Limited Liability Partnership or Partnership, Sole proprietorship has the lowest annual maintenance cost.

Less Formal Business Requirements

Most of the Sole Proprietorship are micro or small business owners, there are lesser rules & regulations need to be complied by Sole Proprietorship (e.g. Exempt from preparing audited report).

Winding Up Easily

You can visit SSM to close your Sole Proprietorship immediately or your Sole Proprietorship will be closed automatically if you did not pay your annual fee on time.

Minimum Entry Requirements

Sole Proprietorship is the most common and simplest business vehicle in Malaysia, any Malaysian citizen or Permanent Resident can register it themselves easily.

Factors to Consider in Sole Proprietorship Name Selection

The name of your company is very important. It is the first impression to your buyers, suppliers and stakeholders. It should, therefore, be relevant, suggestive and attractive. There are various factors that you should keep in mind while naming for your company

Short & Simple
The name should be concise and not be too long. People should be able to pronounce it easily and they should be able to remember your company’s name the first time they hear or read it.

The name of your company should be related to your business. It should fit the company’s branding and corporate identity.

Name of your company should not be same or identical to an existing company or trademark. You can go to to check if your company name is identical to others. You should ideally avoid plural or changing just letter Case, spacing or punctuation marks in an existing company name.

Should not be illegal / offensive
The name of your company should not be against law. It should not be abusive or against the customs and beliefs of any religion.