Starting a Direct Sales (MLM) business in Malaysia is just merely a journey of the beginning. Choosing your precise unique product/services, Compensation Plan and Marketing team will certainly lead you to a huge impact of success.
DIRECT SALES LICENSE:-
Before engaging in a direct sales business in Malaysia, you are advised to have a clear understanding of the DIRECT SALES ACT 1993 (DSA 93).
SECTION 4(1) DSA 93
Subject to Section 14 and 42, no person shall carry on any direct sales business unless it is business incorporated under the Companies Act 1965 and holds a valid license granted Section 6
SECTION 2 DSA 93
Direct Sales means a door-to-door sale and mail order sale within the meaning of this Act.
Door-to-door-sale means the sale of goods or services conducted in following manner:-
► A person or any person authorized by him
• Goes from place to place not being a fixed place of business; or
• Makes telephone call.
Seeking our persons who may be prepared to enter, as purchaser, into contracts for the sales of goods or services; and
► That first-mention person or some person then or subsequently enter into negotiations with hose prospective purchaser with a view to the making of such contracts.
Mail Order Sale means the sale of goods or services which a person conducts, either by himself of through any person authorized by him, receiving an offer for sale contract by mail.
INCORPORATE A PRIVATE LIMITED COMPANY:-
Aside from sole proprietor status, most businesses set up as Private Limited Companies. The term limited derives from the fact that the company’s finances are distinct from the personal finances of their owners (unlike the sole trader arrangement).
Shareholders in limited liability companies are not responsible for company debts, although if required, directors may be required to guarantee loans or credit granted to the company.
The higher level requirements for limited liability companies are as follows:
• Company must be registered at Company Secretary
• Annual accounts must be filed at Company Secretary
• Inland Revenue Board must be informed if the Company has any profits or taxable income in a Company year.
• Company must complete an annual Inland Revenue Board tax return and pay the taxes of the Company each year.
Companies Secretary is responsible for company registration (incorporated) in Malaysia with Companies Commission of Malaysia (SSM). It also has a key role in providing information about Malaysian companies.
COMPANY SET UP
Sometimes building an infrastructure takes time; there may be office location to be position, the website to design, the printing of stationery and other matters (required licenses) which might be crucial in ensuring business survival.
The pre-trading period can provide a good opportunity to set up support systems which ensure that when the first customer is gained; they are not immediately lost due to poor support or service.
Having said that, procrastination and inactivity will just waste time, money and other resources and you watch the sales lose away. Having a list of key elements which are required before selling can commence might ensure the efficiency of proper set up.
Establish a business presence. Identify a location for the business and establish a business address. Things to be consider:-
How much space will be required?
How certain is the requirement?
What about expansion?
What about disaster?
Is space available on a short lease, so that you can move to larger or smaller if necessary?
Most cities require you to obtain a business license from local council, if you operate a business. This is a license granting the company the authority to do business in that city/county.
Intellectual property – Protect your company’s name. Businesses file names on a per-state basis, so other companies may be using the same or a similar name in other states. Conducting a trademark search ensures your unique company name isn’t already in use. Protect company name and logo, and any product designs or copyrights.
For more ideas on starting up a new business, why not contact us today for Start-Up Tips.