Trading or Enterprise differs only in name. It is not necessary that a Trading company only deals with trading businesses. An Enterprise may deal with a variety of businesses. Furthermore, a company can also be named as “Syarikat“.

The difference between Trading, Enterprise and Sdn Bhd is that they can all be either solely owned (sole proprietor) or as a partnership. If a company is solely owned, it will be sole proprietor and with 2 or more shareholders, it will be partnership.

A sole proprietorship or partnership requires only simple accounts. You are not required to submit any audited reports or company accounts. All it requires is that you include the profits into your personal income tax. The benefit of this is that it is lower in cost and tax planning is easier to achieve. However, it is relatively more difficult to apply for loans， bid for bigger projects or government tenders. Furthermore, the company’s finance will indirectly affect your personal assets. In the event that the company faces bankruptcy the debtors may apply to court to auction all personal assets of the sole proprietor or company partnership to clear the debts.

Any companies that are under Trading, Enterprise or Syarikat may switch to Sdn Bhd anytime. It is entirely for you to decide if it would be worth the hassle. Switching means that you will have to incorporate a new company, set up new bank accounts and inform all suppliers and customers the change of companies, which also includes the amendments of Sales Invoices. Furthermore, you are also required to have a stock taking and physical sighting of all fixed assets. The total value of the aforementioned stocks and fixed assets will be assigned into the newly incorporated Sdn Bhd.