Incorporation refers to the forming of a new corporation. A corporation is recognized as a legal entity, that is, recognised as a person under the law. The corporation may be a business, a non-profit organization, sports club or a government of a new city or town. Incorporation of a Sendirian Berhad company has various benefits, including the following:
Protection of personal assets.
Limited Liabilities Companies gives the business owners a level of financial protection. The personal assets of the owners of a Sdn Bhd company is safeguarded against the claims of creditors and lawsuits. Stockholders, directors and officers are not liable for their company’s debts and obligations. Instead, they are limited in liability to the amount they have invested in the corporation. If involved in a lawsuit or bankruptcy, a creditor of the owner of a corporation or LLC cannot seize the personal assets of the owners.
Ownership in a Sdn Bhd company can easily be transferable to others, either in whole or in part.
Raising funds through sale of stock.
Capital from investors can be raised for Sdn Bhd corporations through the sale of stock.
A Sdn Bhd company is capable of continuing indefinitely. Its existence is not affected by the death of shareholders, directors, or officers of the corporation.
Suppliers, customers and other outside parties are more confident in dealing with a Sdn Bhd company compared to a sole proprietor or partnership.
Regardless of an owner’s personal credit scores, corporations acquire their own credit rating, and build a separate credit history by applying for and using corporate credit.
Availability of Government Funds.
Most government funds and grants set up to encourage industry growth is only available for Sdn Bhd companies.
Many government projects are only given to Sdn Bhd companies as opposed to Sole proprietorship.
For the reasons above, many businesses seek our company registration services to upgrade their business status to Sdn Bhd.