There are three types of business entities in Malaysia which are sole trader, partnership and limited company. Sole trader is also known as sole proprietorship. It is a business that own by an individual and he or she owns unlimited liabilities. There is no separation between the owner and its personal assets which means that if the business is bankrupt, trade payables can sue the owner for all the debts owed in respect of its personal assets, personal income, and employment income. For partnership, it is a legal form of business that is carried out by two or more persons who share management, profits and losses. (Partnership, 2014) Same goes to partnership businesses, it also consists of unlimited liabilities but it is governed by Partnership Act 1961 in Malaysia. In the case of Mollowo, March & Co v Court of Wardsi , Sir Montague Smith stated that ‘to establish a partnership, it must have agreed to carry on business, or to share profits in same way.’ Under limited company, there are two form businesses which are private and public. A private
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