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WHAT IS SOLE PROPRIETORSHIP ?

Sole proprietorship is a type of business organization in Malaysia. The business is owned by one person.

It is the simplest form of business organization with minimal legal requirements.

WHO IS ELIGIBLE TO REGISTER A BUSINESS AS A SOLE PROPRIETOR ?

Only a Malaysian citizen and a permanent resident can register a business as sole proprietor.

WHAT ARE THE ADVANTAGES OF SOLE PROPRIETORSHIP ?

Being your own boss is a lot of satisfaction in working for yourself.

Sole proprietorship can be started fairly easily with minimal capital requirements.

The owner receives all the profits and can exercise his entrepreneurial skills to the full. No public disclosure of accounts is required and business affairs can be kept private.

As the owner of the business, you can make decisions and run the business the way you wish. You will normally retain your customers by having "personal" contact with them.

WHAT ARE THE DISADVANTAGES OF SOLE PROPRIETORSHIP ?

You will have to bear unlimited liability for any losses incurred by the business. You are responsible entirely for the debts of the business.

A person is normally skillful in one or two key areas of the business. Thus your expertise is limited. To be a successful owner you will need to obtain relevant advice from other experts.

Your funds may be inadequate if you wish to expand rapidly. A sole proprietor's main source of funds is usually the savings. Even credit obtained from suppliers may only be on a short-term basis.

Operating as a sole trader, you will find it difficult to take days off for holidays. You may have to work long hours.

The firm will cease business once the owner dies.