How do I convert my sole proprietorship into a Sdn Bhd?
There is no direct conversion. You incorporate a new Sdn Bhd, then transfer the business, contracts, staff and assets to it by agreement, and end the sole proprietorship's registration with SSM. Banks, landlords, licences and tax records must all be moved to the company's name.
Sole proprietorships are registered under the Registration of Businesses Act 1956, and companies under the Companies Act 2016. The two regimes are separate, so the business cannot simply change form.
Typical steps
- Incorporate the Sdn Bhd (new name, directors, secretary within 30 days).
- Agree the transfer: a business sale or transfer agreement for stock, equipment, goodwill and contracts. Tax and stamp duty may apply, so take advice first.
- Move contracts and staff: customers, suppliers, landlords and employees need notice or new contracts.
- Transfer licences and permits: they are usually not transferable automatically; reapply in the company's name.
- Open the company bank account and stop using the personal business account.
- Close the old registration with SSM once trading has moved; continuing to run an expired or old registration can create duplicate obligations.
- Settle old liabilities of the sole proprietorship, which remain yours personally.
Trade under the new name only after incorporation, and tell your customers. Keep records of the transition date for your accountant.
Legal basis
- Registration of Businesses Act 1956
- Companies Act 2016, s.14
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- What business structure should I choose in Malaysia: sole proprietorship, partnership, LLP or Sdn Bhd?Pick based on liability, who owns it and how credible you need to look. A sole proprietorship or partnership is cheapest but the owners are personally liable; an LLP or a Sdn Bhd gives a separate legal entity. A Sdn Bhd is the usual choice once you hire staff, sign larger contracts or bring in investors.
- What is the difference between a sole proprietorship and a Sdn Bhd in Malaysia?A sole proprietorship is not a separate legal person, so you are personally liable for all business debts. A Sdn Bhd is its own legal person and shareholders are generally liable only for unpaid share capital. A Sdn Bhd costs more to set up and carries more yearly filing duties.
- What is an LLP in Malaysia and how is it different from a Sdn Bhd?A limited liability partnership (LLP) is a body corporate registered under the LLP Act 2012. It needs at least two partners (a shortfall is allowed for six months) and a compliance officer who is a Malaysian citizen or permanent resident living in Malaysia. It runs on a partnership agreement, not a board. A Sdn Bhd has directors, shares and heavier governance under the Companies Act 2016.
- How do I register a Sdn Bhd with SSM step by step?Search and apply for a company name, then lodge the incorporation application online with SSM through its e-services (MyCoID), with director and shareholder details, registered office and business activity. Pay the RM1,000 fee, then appoint a licensed company secretary within 30 days of incorporation.
- How much does it cost to incorporate a Sdn Bhd in Malaysia (SSM fees)?SSM's own fee is RM1,000 to incorporate a company limited by shares, plus RM50 for each 30-day name reservation (unless you use direct incorporation). Your total will also include the company secretary and any professional fees, which are not set by SSM.