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It is simple for a Malaysian resident to set up a business in Malaysia. The first consideration is to decide on the right entity that will meet your business needs. The most common three business entities available in Malaysia are sole proprietorship, limited liability partnership and private limited company.
Sole Proprietorship
The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name, such as Alisa Salon. The fictitious name is simply a trade name--it does not create a legal entity separate from the sole proprietor owner.
Private Limited Company a.k.a Sendirian Berhad
The private limited company better known as Sendirian Berhad (Sdn Bhd) is the most popular business entity in Malaysia. A Sdn Bhd has a separate legal status from its shareholders and directors, who have limited liabilities for the debts and losses of the company.
Limited Liability Partnership
A limited liability partnership (LLP) is a perfect blend of a partnership and a private limited company. A LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company. This structure is highly suitable for individuals engaged in professional services such as lawyers, architects, accountants and management consultants.
LLPs are still relatively new in Malaysia (the LLP act was only gazetted in 2012) and still remarkably unknown for something so useful.