Ownership by Company TPC – General Q4


Can I buy property using my business name?


The answer is YES and NO. Why?

If your business is a sendirian berhad or berhad company, then YES! If your business is a sole-proprietorship or partnership, then NO!

The new entity is called Limited Liability Partnership (LLP). This entity can in fact own property under its name. This is relatively a new thing in Malaysia, and some people are using this vehicle to manage their portfolio of properties. The administrative fee with LLP is cheaper than Sdn Bhd.

As a sole trader (sole proprietor), there is little distinction between you and the business. Any business liability becomes your debts. Your personal assets - including your house - are not protected (to pay your debts). So, ABC Enterprise is the same as Mr ABC. Hence, the property is own by Mr ABC, not by ABC Enterprise.

However, the law says sendirian berhad or berhad is a ‘person’ of legal entity. It can sue and be sued as itself. Hence, sendirian berhad or berhad can own property as like an individual person. However, a sole proprietor or a partnership is a loose association, each individual is an entity of his personal legal person. So, a sole proprietor or a partnership can only own property as named individual, not by the business association as above example.

All that is innovative accounting when tax and cost of administration becomes beneficial when risk is spread out with a company (investment holding company - IHC). Why? Because company is ageless. It is perpetually surviving compared to a human - as a going concern. Thus, rich people or investors pass on their properties (estate) to his descendants by using this vehicle of investment - company. They only need to transfer the shares of this company (whatever percentage suitable) to their descendants without transferring title of the properties.

However, running a company including an investment holding company requires cost. So, unless your assets are sizable, it may not be feasible to do it this way.