Annual Corporate Compliance Requirements for a "Sdn Bhd"
Once your company is incorporated in Malaysia, it is not the end of the hassle. It is the start of your business journey and your responsibilities as the director to manage and ensure corporate compliance are met. Here we will summarize the corporate compliance requirements post company incorporation under the Companies Act and Registrar of Companies (SSM) in Malaysia.
Display of company name and company registration number
A company must display/show the registered name and registration number at:
- The registered office
- Every place the business is carried on
- Every place where the books are kept; and
- Business letters, notices and other publications, Websites, Bills of exchange, promissory notes, endorsements and order forms, Cheques, Order invoices and other payment receipts
Documents to be kept at Registered Office
A company is required to keep its statutory documents, registers, minutes, resolutions books, records and other documents as required by the Registrar.
If there is a change to the address that the documents are kept, the company has to notify the Registrar within 14 days of the change.
Maintain proper accounting/financial records
A company is required to keep proper accounting and other records which sufficiently explain the transactions and financial position of the company. The proper records will help to substantiate the true and fair view of the profit and loss and balance sheet.
Any account transaction must be properly recorded in the accounts within 60 days from the transaction dates. All accounting and other records must to be retained for at least 7 years.
Company secretary and Director
A company must maintain a minimum one company secretary and at least one (1) director at least 18 years old and principally residing in Malaysia.
Annual return is a snapshot of corporate information about a company, containing the following details:
- Registered office address, Business office address/ Branch office address (if any)
- Principal business activities and MSIC Code (Industry Code)
- Total paid-up capital
- The total amount of indebtedness
- The particulars of directors, managers, secretaries, auditors and list of members
To learn more about annual return filing, please read - Annual Return Filing to SSM
The directors are required to circulate (send) the financial statements to all shareholders within 6 months from the financial year end. For example, if the financial year end of your company is 31 December, then the deadline to circulate shall be 30 June in the following year.
Upon the circulation of financial statements, the Company is required to lodge the financial statements to Companies Commission of Malaysia (SSM) within 30 days thereon.
The financial statements of the Company must be prepared in accordance with the applicable accounting standards. The approved accounting standards set out by Malaysian Accounting Standards Board (MASB) are:
- Malaysian Financial Reporting Standards (MFRSs)
- Malaysian Private Entity Reporting Standards (MPERSs)
You may need to consult with your accountant on the appropriate accounting standards to use for your company as each standard having different requirements. For SMEs and have no specific reporting requirements, the use of MPERs is more recommended as it is simple to apply and less disclosure burdens.
Every company is required to have its financial statements audited unless the companies are exempted under the SSM Practice Directive 3/2017 - Qualifying Criteria for Audit Exemption for Certain Categories of Private Companies, such as:
(a) Dormant companies - does not carry on business and there is no accounting transaction occurred
(b) Zero-Revenue Companies (as defined below) are the companies where
- it does not have any revenue during the current financial year;
- it does not have any revenue in the immediate past two financial years; and
- its total assets in the current Statement of Financial Position (FS) does not exceed RM300,000 as well as in the FS of the immediate past two financial years.
- it has revenue not exceeding RM100,000 during the current financial year and in the immediate past two (2) financial years;
- its total assets in the current Statement of Financial Position (FS) does not exceed RM300,000 and in the immediate past two (2) financial years; and
- it has, at the end of its current financial year and in each of its immediate past two (2) financial years end, not more than five (5) employees.
Incorporating a company is easy, but it take efforts to ensure compliance requirements are properly met. Otherwise, your company runs the risk of facing fines and penalties.
Frequently asked questions
1. How much it cost and how long it takes to register a company (Sdn Bhd) in Malaysia?
Incorporating a private company (Sdn Bhd) in Malaysia it usually take 2-3 working days, depends on the verification document preparation. Company incorporation is submitted via SSM Malaysia Corporate Identity (“MyCoID”) portal and SSM charge name reservation for RM50 and RM1,010 for company registration. Usually the market rate of company incorporation is RM1,800- RM2,500. Here at altomate, we offer very competitive pricing at only RM1,299 (including SSM fee).2. How much it cost to maintain a company in Malaysia?
The cost to maintain a dormant/semi-active company in Malaysia, involves:
- Company secretary retainer fee - RM2,000- RM3,000 (including company secretary retainer fee, filing of annual return, filing of financial statements, ad-hoc resolution preparation)
- Company tax compliance fee- RM1,500- RM3,500 (CP204 filing, preparation and filing of corporate tax return Form C, filing of employer tax return Form E)
- Compilation/Audit of Financial statements- RM600-RM1,500 for compilation and from RM1,200 for auditing services
Yes, a company is exempted to have its financial statement audited if it meets the criteria set under SSM Practice Directive 3/2017 . However, it should not be confused over the requirements to file financial statements even audit is not required. A Company is required to prepare and file a set of financial statements in accordance with the applicable accounting standards (a financial statements is not just a set of management accounts!)4. What are the director requirements for Sdn Bhd Company in Malaysia?
A company is required to have at least one (1) minimum director residing in Malaysia. The director is the person who is primarily responsible for the decision making and running of the business. The Director is also held responsible to ensure compliance requirement is met.