A sole proprietorship is where a business is owned by one person. In Malaysia, this is allowed but the owner of business must be a Malaysian citizen or a permanent resident, residing and operating its business in Malaysia.
To close down one’s business, one must do the following:
- Notify the local municipal council in writing of your decision to close down the business; and
- Place a Notification of Disclosure of Business with the Registrar of Business (ROB) within 14 days from the date of termination.
Take note that it would be an offence if the business owner fails to inform the local municipal council and/or inform ROB in the event of closure of business. Should the business be terminated due to the death of the business owner, then owner’s personal representative or heir will need to notify the ROB and the local council as well as fill in the necessary form needed to notify ROB. This must be done within 30 days from the date of death of the business owner.
The sole trader is personally responsible for all the debts and liabilities accrued by the business. To voluntarily wind up the business, you will need to:
- Conclude any ongoing contracts;
- Sell stock and remaining assets;
- Collect outstanding debts / receivables;
- Pay creditors and all statutory debts and liabilities including taxes and amount due to the Employees Provident Funds (EPF) and SOCSO;
- Notify all interested parties eg: banks, landlord, customers, suppliers, local council and registering bodies;
- Distribute the remaining money to yourself.