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Business is an activity to provide goods or services at a profit. Every business carried on for this purposes such as trade, commerce, craftsmanship, profession must be registered.

A business main aim may not be making profit but this is certainly the difference between a business organization and a non-business organization.


In Malaysia, a business may be carried on in any one of the following forms:

  • Sole Proprietorships
  • Partnerships
  • Companies

The business of a sole proprietorship is owned by one person only and is the simplest form of business organization. However, it need not be a one-person business. They can have large numbers of employees.

A partnership exists when at least 2 or more persons pool their capital and work together. The partners share the risk. As with the sole proprietorship, the partners are owners of its property and are fully responsible for meeting the partnership's debts.

When a company is formed, it has become 'incorporated' under the Companies Act, 1965. The company formed is treated as a separate entity, independent of its members.

There are two common types of companies limited by shares - Public limited companies and Private limited companies.

Private limited companies cannot sell shares to the general public. The name of private limited company ends with the word "Sendirian Berhad" or abbreviation "Sdn. Bhd.".

Public limited companies raise capital by selling shares and are run by a board of directors elected by shareholders. They show their status by using the abbreviation "Bhd." or the word "Berhad" after their name.

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