Here are the differences between a Sole-Proprietorship and a Private Limited Company:
| Sole-Proprietorship | Private Limited Company | |
| Definition | A business owned and run by only one individual | A business form which is a legal entity separate from its directors and shareholders |
| Owned by | One person | Not more than 50 shareholders |
| Legal Status | No distinction between the owner and the business Owner has unlimited liability including personally liable for debts and losses of business Can sue and be sued in individual’s name or be sued in business name Can only own property in individual’s name | A separate legal entity from its directors and shareholders Shareholders have limited liability and not personally liable for debts and losses of company Can sue and be sued in company’s name Can own property in company’s name |
| Yearly Statutory Obligation | Yearly renewals (one year or not more than five years) | Must lodge Annual Returns and Audited Financial Statements within the prescribed period every year or other statutory documents as required by the laws |
| Registration Requirement | Malaysian Citizen or a Permanent Resident of 18 years old and above only | At least one director who is at least 18 years old and ordinarily resides in Malaysia At least one shareholder who is at least 18 years old Must appoint a Company Secretary within 30 days of incorporation Must have a registered office in Malaysia |
| Continuity in Law | Exists as long as the owner is alive and desires to continue the business | A company has perpetual succession until wound up or struck off |
| Closing the Business | By the Owner for the following reasons: Cessation of the business Bankrupt Death of the owner Pursuant to Court Order | Winding up – voluntarily by member or creditors, compulsorily by the Court Striking Off |
