What is the valuation of stock for the conversion from enterprise to Sdn Bhd?

Referring to Public Ruling 2/2020 Tax Treatment of Stock in Trade Part 1 - Valuation of Stock

Valuation of Stock equal to

1. Price paid on the sales or

2. Value of the consideration

Valuation of Stock is not market value of the stock

Conditions

Where a person permanently ceases to carry on his business and –

(a) any stock of the business is transferred on cessation or shortly after cessation for a valuable consideration to another person who intends to use that sold or transferred stock in his business

(b) the cost of the transferred stock is deductible as an expense in computing the other person’s adjusted income for the basis period for a year of assessment of his business

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP

• Website www.ktp.com.my

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𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

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• Website www.thks.com.my

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We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

Registration Procedure:

1. Complete the Registration Form.

2. Every business owner and partners must sign on the registration form.

3. Owner or one of the partners may submit the application over the counter or submit through online via SSM EzBiz Online services in the SSM’s website at www.ssm.com.my.

4. Documents to be attached are as follows:

• Owner’s and /or partner’s identity card;

• Original Business Registration Certificate for the change of business type;

• Supporting document or approval letter from relevant agencies for certain type of business if required by Registrar of Business.

Visit us

• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our job platform for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Our associate in secretarial & accounting services)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

Convert Enterprise (sole-proprietorship/partnership) to Sdn Bhd Explained. Part 1

Today we explain the difference between Enterprise and Sdn Bhd comprehensively.

1. Board of director

• Enterprise : Not required

• Sdn Bhd : Must have at least one (1) director

2. Liability

• Enterprise : The owner/partner(s) has unlimited liability and has to take risk in any loss of business fails

• Sdn Bhd : The shareholder(s) has limited liability. Company becomes separate entity

3. Tax Rate

• Enterprise : Tax rate for individual income tax between 0% to 30%

• Sdn Bhd : Annual gross business income not more than RM50 million and paid up ordinary share capital on or less RM2.5million, the tax rate is 17% for first 600K,24% for remaining.

4. Law

• Enterprise : Regulated under the Business Act 1956

• Sdn Bhd : Regulated under the Company Act 2016

5. Chargeable person

• Enterprise : The person is a chargeable person under tax.

• Sdn Bhd : The company is a chargeable person under tax.

6. Business Management

• Enterprise : The owner/partner(s) is to manage and run the business.

• Sdn Bhd : The board of director is to manage and run the business

7. Number of shareholder/owner/partner

• Enterprise : Sole proprietorship – at least one (1) owner. Partnership – at least two (2) to twenty (20) partners

• Sdn Bhd : At least one (1) to fifty (50) shareholders

8. Company secretary

• Enterprise : Not required

• Sdn Bhd : At least one (1) qualified company secretary

9. Statutory Audit Requirement

• Enterprise : Not required

• Sdn Bhd : Yes. Compulsory

10. Annual Compliance

• Enterprise : Not required

• Sdn Bhd : Yes. Compulsory to submit annual return and audited financial statement

11. Register Office and Statutory Records

• Enterprise : Required to keep accounting books and records at the place of business

• Sdn Bhd : Required to have a registered office within Malaysia which all correspondences & notices may be addressed. Required to keep registers.

12. Income Tax Position

• Enterprise : Tax on person either the owner or partner(s)

• Sdn Bhd : Tax on the company.

13. Public Access to Company Financial Situation

• Enterprise : No need to disclose.

• Sdn Bhd : Public can access to the financial performance & position of the company

Visit us

• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

• Youtube http://bit.ly/3ppmjyE

• Facebook http://bit.ly/3ateoMz

• Instagram https://bit.ly/3jZpKLo

𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our job platform for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Our associate in secretarial & accounting services)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.