Documente Academic
Documente Profesional
Documente Cultură
Module for
Principles of Entrepreneurship (ENT 530)
BBA, Faculty of Business Management, UiTM
Module Focus
This module will focus on:
1. The main business forms that
appeal to new own-venture
entrepreneurs & their key features
2. Key licenses & permits to operate
a business
3. Key forms of intellectual property
& its protection
Introduction
Starting a new venture requires the entrepreneur
to make informed decisions regarding several
key issues that will impact on the entrepreneur s
ability and capacity to extract the best potential
from the target opportunity.
Some of the key initial decisions include the form
of business to register, the business licenses &
permits required to operate and protecting
unique assets or intellectual property that
impact greatly on the companys competitive
edge and ability to make money.
Fauziah Pawan, Sept. 2012
(ENT530)
Section 1:
Business Forms
&
Governing Legislations
Table 1
Summary of Business Forms &
Governing Legislations
Business Form
Sole Proprietorship
Governing Legislation
Registration of Businesses
Act 1956 (Amendment 1978)
Partnership
Registration of Businesses
Act 1956 (Amendment 1978)
Private Limited
Company (Sendirian
Berhad)
Sole Proprietorship
The most basic business entity in terms of ease of
registration and relatively simple business structure and
management requirements
Sole proprietorship allows only one person to be registered
as the legal owner
This single owner is also considered the manager for the
overall business and is often referred to as the ownermanager.
The size and scope of business is often relatively small and
as such the owner-manager may run the business activity
by himself or with the help of not more than 5 full time
workers
Fauziah Pawan, Sept. 2012
(ENT530)
Sole Proprietorship.cont.
The sole ownership entitles the ownermanager to all profits earned by the business
On the other hand the owner-manager has to
also bear the entire business risk and
unlimited liabilities. Unlimited liability implies
that personal assets can be seized to settled
outstanding business debts.
Death of the sole owner will result in
termination of the business
Fauziah Pawan, Sept. 2012
(ENT530)
Partnership
This business form involves two or more partners in a
single business concern
The maximum number of partners allowed is 20 persons
Professional business (e.g. legal firms, architect firms or
accounting firms) are allowed to have up to 50 partners
Like the sole proprietorship, a partnership also allows the
owners (partners) to manage freely with all profits being
shared by the partners.
Partners also bear unlimited liabilities that means their
personal assets can be seized to settle business debts.
Fauziah Pawan, Sept. 2012
(ENT530)
10
Partnershipcont.
Partnerships are encouraged to have a Partnership
Agreement outlining details of ownership,
entitlement to profits and share of liabilities.
Partnership Agreements are not required by law but
are very useful in case of disputes between partners.
Death or withdrawal of any of the partner may result
in termination of the business unless stipulated
otherwise in the Partnership Agreement
11
12
13
Sole
Proprietorship
Partnership
Private Limited
Company
Ownership
One individual
Up to 20 individuals
Up to 50 individuals
Share of
profits &
losses
Profits depend on
amount of investment
or as specified in
partnership agreement
Shareholder receives
share of profits
through dividend
payouts
Liability of
owners
Unlimited liability
extending to
personal assets
Unlimited liability
unless otherwise
specified in a
partnership agreement
Shareholder liability
limited to amount of
share or capital
contribution
In the hands of a
management team
guided by a Board of
Directors
Death of owner
dissolves the
business
Death or withdrawal
of shareholder has no
effect on existence of
company
15
Section 2:
Business Licenses
& Permits
16
17
18
19
Example
Manufacturing
Wholesale, retail,
trading, import &
export business
Building &
Construction
20
Business Permits
Business permits allows business to
undertake certain business related
activities that are regulated by
governing authorities at either the
federal, state or local level
Table 4 summarizes examples of
business permits
Fauziah Pawan, Sept. 2012
(ENT530)
21
Example
22
Section 3:
Protecting Intellectual Property
23
24
Patent
Patents are used primarily to protect inventions that
represent a new way of doing things
Inventions normally involve some level of technology and
can be in the form of a product or process
A registered patent gives exclusive right to the patent
owner to make, use and sell the patented product or
process for up to 20 years
A patent owner can still retain all rights to the invention but
license another party to use the patent within certain
agreed upon conditions and stipulations
The patent owner can also choose to sell the patent to
another party hence severing all rights to the invention
Fauziah Pawan, Sept. 2012
concerned.
(ENT530)
25
Patent
cont.
26
Copyright
Copyrights are used to protect a wide range of original
creative, intellectual or artistic works or authorship
This can include original works of art and literature, music
composition, audio recordings, drawings, sculptures,
broadcasts films and computer programs.
The idea behind the creative work is itself not protected
and as such some else can use the same idea but it must
be in a significantly different form or composition so as to
not infringe on an existing copyright.
A copyright can exist for up to 50 years after the death of
the registered author
Fauziah Pawan, Sept. 2012
Trademark or Brand
Trademarks are any distinctive name, mark, symbols,
words, shapes and colors
A trademark is sometimes also referred to as a brand to
indicate a distinctive representation of a company
In Malaysia it is not compulsory to register a trademark
but a company can still rely on common law to protect
against infringement or imitation.
to show a
28
29
Summary
In starting a new venture, an entrepreneur
must make decisions regarding fundamental
issues such as the form of business
registration, understanding business licenses
and permits needed to operate legally as
well as protecting intellectual properties
Making these decisions in an informed
manner are important to ensure a business
structure that can operate legally to optimize
its entrepreneurial opportunities
Fauziah Pawan, Sept. 2012
(ENT530)
30
References
http://www.malaysia.gov.my
http://ssm.com.my
Hisrich, Robert D., Peters, Michael P. & Shepherd,
D., (2006). Entrepreneurship, New York: McGrawHill / Irwin, 8th Edition, International Edition, 2010.
UiTM Entrepreneurship Study Group (MEDEC),
(2004). Fundamentals of Entrepreneurship,
Petaling Jaya: Pearson-Prentice Hall Sdn. Bhd. 2004
Fauziah Pawan, Sept. 2012
(ENT530)
31/27