Registering a business is only the beginning. Once registered, an entrepreneur carries several legal responsibilities that must be met so that the business stays lawful and runs smoothly.
Responsibilities to the authorities
- Renewing the business registration with SSM before the expiry date.
- Registering with the Inland Revenue Board (LHDN) and paying income tax.
- Applying for the relevant licences or permits from local authorities, for example a food premises licence.
Responsibilities to employees
- Contributing to the Employees Provident Fund (EPF) for each employee.
- Making SOCSO (PERKESO) contributions for employees' social security protection.
Example
Mr Lim opens a restaurant. After registering, he applies for a food premises licence from the local council, registers with LHDN, and starts contributing to EPF and SOCSO for his three employees.
The responsibility to keep records
An entrepreneur must keep proper accounting records such as invoices and receipts for tax purposes and reference. Any change such as the address or a partner must also be reported to SSM.
Remember
Failing to meet responsibilities such as paying tax or contributing to EPF can lead to a fine or legal action.
In addition, if the business reaches the set income threshold, it may need to register for the Sales and Service Tax (SST) and collect the tax on behalf of the government. An entrepreneur is also responsible for following consumer protection rules, such as labelling prices clearly and not misleading customers. Neglecting these responsibilities not only harms the reputation but can also lead to enforcement action.
By meeting all these responsibilities, the business operates lawfully, protects its employees, and keeps a good reputation with customers and the authorities.