Starting and operating a business in Malaysia?

Want to start and operate a business in Malaysia?

Well you will need to firstly understand whether what you do can be considered as a business.

Under the Registration of Businesses Act 1956 (‘the Act’), the law define “business” to include every form of trade, commerce, craftsmanship, calling, profession, or other activity carried on for the purposes of gain, but does not include any office or employment or any charitable undertaking or any occupation specified in the Schedule.

It quite a wide blanket.

If your actions fall under the term ’business’ above, you are then compelled and required to register your business the law.

So who is the person then would need to register the business well..er on behalf of the business?

That would be the person responsible of the business as defined under the same Act where the law states the “person responsible” includes every director, manager, partner, officer, agent or servant at any time charged either solely or to a substantial extent with the management of a business.

This requirement begins immediately once you commence your business.

The person responsible for a business shall, not later than thirty days from the date of the commencement of the business, apply to the Registrar for the registration of the business.

If you fail to do so, the business action can be considered as an offence and shall on conviction be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding two years or to both.

This liability does not stop at just the owner of the business but the law is clear that any director, manager, secretary or other officer of the body corporate shall also be deemed to be guilty of that offence unless he can prove that such offence was committed without his knowledge or consent and was not attributable to any neglect on his part.

There are however exceptions to this law. This law shall not be applicable to;

1. any business which is exclusively owned and carried on by any company registered under the Companies Act 1965 [Act 125];

2. any business owned or conducted by the Government or by any public body incorporated by or constituted by or under any written law;

3. any society registered or exempted under any written law related to societies or co-operative societies;

4. any business consisting solely of the exercise of a profession which its operation is allowed and stipulated under the specific provision of the law.

Related guides

• Setting Up Your Business in Malaysia

• Unveiling Core vs. Auxiliary Business Activities

• What Can A Lawyer Do For Your Business Setup

• Business Lawyer In Malaysia