How to Change from Enterprise to Sdn Bhd

How to Change from Enterprise to Sdn Bhd

If a business owner started out the business as an enterprise, i.e. as a sole proprietor or in a partnership, as time goes by, the owner could be reaping the joy of having steadily increasing profits. There comes a time where he or she may recognise the stability of the enterprise and will be sourcing for upgrades for the business, including the business entity. However, unlike a software, upgrading from an enterprise to a private limited company in Malaysia (Sdn Bhd) is not simply a button away. Here we will discuss the process we propose to you for your upgrade.


An enterprise is a business registered with Registration of Business and is governed under Registration of Business Act. An enterprise is simple and easy to register, many business owners are attracted to its simplicity and convenience, yet having full control of the business income. It is only available for Malaysian citizens or permanent residents (PRs). The ease in registering the business comes with its risks. It is considered an unlimited business entity and not considered a legal entity i.e. is tied to the business owners. In the event where the business is to declare bankrupt or has outstanding creditors of huge amounts, the business creditors are able to go after the owner of the business and his or her personal finances and assets.

Private Limited Company/ Sdn Bhd

A Sdn Bhd is a company registered with the Registration of Companies and is governed under Companies Act. Unlike an enterprise, a Sdn Bhd is a limited entity and is separated from the owner(s). It can have a minimum of one shareholder to a maximum of 50 shareholders. This business entity is open to non-Malaysians who are interested to venture their business in Malaysia. It is easy to incorporate a company in Malaysia, especially through a service provider like Quadrant Biz Solutions.

Taking the leap

Here comes the part you have been waiting for, you might be thinking about how you can legally convert your enterprise to a Sdn Bhd? We recommend you to do the following steps: 

  1. Register a Sdn Bhd – Here are some of the requirements to register a Sdn Bhd: 
  • A minimum paid up capital of RM1. 
  • At least one director of a minimum age of 18 years old and residing in Malaysia.
  • All directors should not be bankrupt nor have been convicted in Malaysia within the last 5 years.
  • Appoint a company secretary within 30 days of successful incorporation
  1. Transfer your assets and other documentations from the Enterprise to the Sdn Bhd. You may require the services of a legal advisor or lawyer for this. 
  2. Close down the enterprise – This is to avoid being taken twice into consideration for tax.

We also would recommend you to speak to a tax advisor to help you make a better informed decision.

Do you need company secretarial services?

It is very important to conduct your own research and seek advice from professionals of different sectors to form an informed opinion to make a decision. In the meantime, if you come across the need for company secretary services, we at Quadrant Biz Solutions are available to lend a helping hand. Speak to us today!

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