Closing of Business for Sole-Proprietor and Partnership

In the year 2022, the pandemic has been ongoing for nearly three years now. Not only has it reshaped various sectors across the globe, it also continues to profoundly disrupt various aspects of our lives. Regardless, life goes on.

In Malaysia, the economy started to recover in the fourth quarter of 2021. While some businesses were able to recover to their pre-pandemic state, others still struggle due to the many pandemic risks and unforeseeable circumstances. Consequently, some may consider closing their Sole-Proprietorship or Partnership.

Reason for Closing Sole-Proprietorship or Partnership

There are many reasons for one to close a Sole-Proprietorship or Partnership, some of these include:

• the company has ceased all business activities
• the death of the owner
• an economic downturn (e.g. lockdown, economic recession)
• pursuant to a court order
• the company deviates from its scope of activity

Expiration of Business Registered

Prior to business termination, one must first determine if the business registered has expired. In cases where the:

• business registered has expired
  The business registration will be automatically terminated by the Companies Commission of Malaysia (SSM).

• business registered has yet to expire
  Complete and submit the termination of registration business (Form C). The owner and all their partners must sign Form C. The owner and all their partners must submit the application to the counter OR through the online portal https://ezbiz.ssm.com.my/

Two Types of Form C

Many often confuse SSM’s Form C with one that is of the Inland Revenue Board of Malaysia (LHDN). It is crucial to realise that both Form Cs are dissimilar and of different purposes.

• SSM’s Form C
  Notice of termination for a registered business
• LHDN’s Form C
  Income tax return form for a company

Download SSM’s Form C here.

Documents to be Attached

Below are the documents required when filling in Form C to apply to close a Sole-Proprietorship or Partnership:

• Business Registration Certificate
• Photocopy of owner and/or partner’s identity card
• Photocopy of death certificate in the event of termination upon the death of owner or partner
• Copy of the court order if the termination was ordered by the court
• Relevant documents if the owner has become bankrupt

Closing Tax File Permanently

A Sole-Proprietorship or Partnership is not a legal entity, all its chargeable income will be taxed at the business owner’s personal income tax.

You are advised to consult your tax agent to close your tax file permanently and properly.

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