Androids may dream of electric sheep, office worker bees dream of being their own boss. They yearn for the freedom to pursue passions or ideas they firmly believe in.
Most financial gurus say having a business plan is paramount. Assuming you have that carved out, it’s time to trawl the corridors of government agencies, filling in stacks of forms, handing over fees and setting yourself right in the eyes of the law.
Sure, you could outsource the legwork to professionals. But if you don’t have capital to spare, buckle down and attend to it personally. You get to learn a thing or three about government bodies and laws that directly affect your business.
Before heading out, browse websites belonging to Companies Commission of Malaysia (SSM), local authorities, Customs Department, Employees’ Provident Fund, Inland Revenue Board (LHDN) and Social Security Organisation (SOCSO). Information listed there will give you an idea where to start.
Put a Name on It
To own a legitimate business in Malaysia, you need to register with the SSM. Decide business type – sole proprietorship or partnership. In layman-speak, is your business fully owned by one person, set up with less than RM50,000 and an estimated annual income of RM200,000 and below? Yes to all? You have yourself a sole proprietorship situation.
Partnership, in essence, refers to a private limited (Sdn Bhd) entity. Also don’t forget to prepare 5-10 name options. No two companies are allowed to have the same name. SSM will provide forms and help you need. However, to submit them, you need to be there in person.
You can also register within 30 days from the starting date of the business. Once papers are in order, a business registration certificate is issued in an hour. Display it at office premises.
Hop to a name card printing or a bookshop. These places usually have stamp-making services. A few stamps need to be made for banking, invoicing and other purposes to ensure things run smoothly at headquarters.
Also Read: How To Register Your Business in Malaysia
Approvals and More
For example, if the venture involves education or childcare, the Kuala Lumpur City Hall will not allow your premises near vice-related businesses. Finance-related ventures will need approval from Bank Negara as stipulated in the Money Services Business Act 2011.
Also, trading and signboard licenses are needed if you are running a shop, doesn’t matter if it’s in a mall or a commercial building. Get it done at your nearest local council office or if you’re in KL, City Hall will be the place to go.
Before you start selling products and services, ensure your company is registered with LHDN. You will get an income tax file number to allow the company to start issuing bills and invoices. At LHDN, it’s time to get details on corporate taxation.
Also since April 1 last year, businesses with expected annual sales of more than RM500,000 are required to apply for a Goods and Services Tax (GST) licence with Customs. You can head to its website and submit forms online. If unsure, it is better to go in person. They are located at Pusat Pemprosesan GST, Kompleks Kastam Kelana Jaya, No 22 Jalan SS6/3 Kelana Jaya in Petaling Jaya, Selangor.
Lastly, you need a full-time accounts clerk or part-time accountant to prepare your financials for audit purposes. It really pays off to have a professional who knows how to handle such delicate matters; it can save you a world of headache and time.
Also Read: How To File Income Tax In Malaysia?
As it Gets Busier
When you’re no longer a one-man show, the company needs to make it known to LHDN, EPF and SOCSO. LHDN will issue an Employer (E) number so you can start hiring staff. As per law, staff earning more than RM3,000 a month will be taxed. As an employer, you’ll need to deduct from their pay monthly and submit to the taxman.
EPF and SOCSO payments for employees are a must even though you may only have two people. At the end of every month, both contributions must go in, otherwise penalties will handed out and in some cases you will be blacklisted.
Keeping Papers in Order
As per Companies Act 1965, a private limited company will need secretarial services that prepare incorporation documents and a statutory declaration of compliance. Common practice is to opt for an external corporate secretarial services. Basic services, including general consultation, range from RM60 to RM100 monthly.
Every business needs a banker. Opt for one you’re familiar with or one that is nearest to company premises. Each Malaysian bank has its own policies. It’s best to check what those exact policies are.
As the business owner, you will need to contact the bank directly and bring along relevant documents such as those issued by SSM and the company stamps.
Armed with a long to-do list, soldier on and good luck.