Partnership vs Sdn Bhd: What’s the Difference

Recently I got a question from one of my readers:

Hello White Coat Ringgit, my name is Lowteikmeng. I saw your sharing of HOW TO REGISTER A BUSINESS IN SWK : A STEP-TO-STEP GUIDE I have registered a partnership company in 2018 through wisma ting pek king. No one advise me to go SSM. My question is, what is the difference between register a partnership company at WISMA HASIL and SSM? i nvr register at ssm, shud i register my company at ssm too?

Lowteikmeng – Creative Hair Cut

Answer

No, you do not need to register your company at SSM since you already have a business partnership registered.

You only need to go to SSM when you need to register a private limited company, also known as Sendirian Berhad (Sdn Bhd).

Parnership vs Sdn Bhd

In Malaysia there are several types of business you can register.

The main differences between partnership vs sdn bhd can be summarised as follows:

  1. Ease of registration
  2. Cost
  3. Ownership structure

Ease of Registration

Partnership is definitely much easier to register, with less paperwork and headache compared to sdn bhd.

Cost

Owing to its low startup cost (below RM100), partnership is a way cheaper option for small businesses or partnership. Compared to a private limited company (sendirian berhad) which requires upfront cost of at least RM2000 NOT including your working capital, a partnership is more suitable if you and your business partners are new.

Ownership structure

If you venture into a partnership, the liability is still yours compared to a sdn bhd.

Let’s say your partnership consists of you and 3 other business partners. Your business makes a loss of RM6000 this year. The losses should be shared out among 4 of you.

Any debts or obligations is unlimited and is shared out among the business partners.

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