The difference between Enterprise and SDN BHD

SDN BHD vs Enterprise: Key Differences for Business Owners
May 23, 2024 by
The difference between Enterprise and SDN BHD
CONZLAB BERHAD, Jordan Yu

SDN BHD

  • SDN BHD, which stands for private limited company, requires at least one shareholder and one director. It is mandatory to appoint a company secretary.
  • However, it is not necessary to engage an accounting firm for bookkeeping; you can hire internal staff to handle the accounts.
  • The company's financial records, whether it's income or expenses, must be clearly and explicitly detailed. Additionally, they must undergo an audit, and a Tax Agent must be appointed for tax filing. 

Enterprise

  • Trading or Enterprise is just different names.
  • Trading usually means doing business in the trading industry, but not always. Enterprise means a business, so it includes various types of businesses. Other names like Syarikat can also be used.
  • Whether it's Trading, Enterprise, or Syarikat, they can be either Sole Proprietorship or Partnership, different from Sdn Bhd. If it's a one-person company, it's Sole Proprietorship; if there are two or more partners, it's Partnership. 

What are the differences between Enterprise and SDN BHD ?

  1. Legal Status
    • Enterprise: The owner and the business are considered together, with no special legal status. It's like a person's own business.
    • SDN BHD: It's like a separate person with legal standing. Investors (shareholders) put in money, and a smart person manages the company.

  2. Number of Owners/Shareholders
    • Enterprise: If it's just one person, it's called a Sole Proprietorship. If there are 2 to 20 people, it's called a Partnership.
    • SDN BHD: If there are 1 to 50 people involved.

  3. Debt Responsibility
    • Enterprise: If you have your own business, you're fully responsible for any money problems.
    • SDN BHD: It's more like the money problems are limited to the shareholders.

  4. Duration of Operation
    • Enterprise: If something big happens to the owner, like bankruptcy or passing away, the business might stop.
    • SDN BHD: The business can keep going forever, even if the owners change, as long as they transfer their shares.

  5. Ownership of Stuff and Places
    • Enterprise: Everything in the business belongs to the owner or owners, and they share it together.
    • SDN BHD: The business itself owns everything, not the people who put money in.

  6. Tax Rates
    • Enterprise: Whatever money the business makes gets added to the owner's own money, and they pay tax together.
    • SDN BHD: If the business didn’t get more than RM2.5 million, the first RM500k gets taxed at 20%, and anything more gets taxed at 25%.



The difference between Enterprise and SDN BHD
CONZLAB BERHAD, Jordan Yu May 23, 2024
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