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Malaysia Corporate Compliance Requirement

All Malaysia companies must comply with the statutory corporate compliance requirement. The tables below summarize the details of the different requirements. Given the importance of compliance, it is advisable for Malaysian companies to take the necessary steps to ensure that their businesses are not in breach of any laws or regulations.

Compliance is the process by which an organisation takes steps to ensure that it observes and complies with the external statutory laws and regulations.

1.0 Obligations under Companies Act 2016

No.DescriptionCompliance Time FrameReference
1.1Publication of Name & Registration No.(a) Registered Office;(b) Place of Business(c) Place where its books (Accounting Records) are kept; and(d) all business letters, statements of account, invoices, official notices, official publications, websites, bills of exchange, promissory notes, endorsements, cheques, order forms, invoices, receipts and letters of credit of or purporting to be issued or signed by or on behalf of, the company, and all other forms of its business correspondences and documentation should have the Company name (whether or not it is carrying on business under a business name) & company registration numberImmediatelyS.30 of Companies Act
1.2Appointment of First SecretaryWithin 30 days from the date of incorporationS.236 of Companies Act
1.3Documents to be kept at Registered Officea) notice of registration issued under section 15;b) the constitution of the company, if any;c) certificates given under this Act or corresponding previous written law, if anyd) all registers, books, records and documents as required under this Act;e) minutes of all meetings of members and resolutions of members;f) minutes of all meetings and resolutions of the board and committees of the Board;g) copies of all written communications to all members or all holders of the same class of shares;h) copies of all financial statements and group financial statement;i) the accounting records of the company required under section 245;j) copies of all instruments creating or evidencing charges as required under section 357; andk) such other documents required to be kept by the Registrar.All the documents above are usually kept at the Registered Office as we are handling the Corporate Secretarial Services, except for item (i) the accounting records of the company which is not under our custody. Hence, a Notification to that effect has to be lodged with SSM.Immediately and within 14 days from the date of changeS.47 of Companies Act
1.4Proper Accounting RecordsKeeping proper accounting and other records which sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets.All appropriate entries are to be made in such accounting and other records within 60 days of completion of the transactions to which they relate the accounting and other records are to be retained for 7 years.In accordance to the Inland Revenue Board of Malaysia (IRBM) guidelines of record keeping, it is obliged that all accounting documents should be kept in its original form (hardcopies) although they could be converted to an electronic form (scanned copies) to be conveniently retrievable. The accounting record should be made available if IRBM officer requests for its original .Within 60 days of completion of transactionsS.245 of Companies Act
1.5Lodging of Annual Return, for each calendar year not later than 30 days from the anniversary of its incorporation date.Within 30 days from the anniversary of incorporation dateS.68 of Companies Act
1.6Preparation of Financial Statements Directors of every company shall prepare financial statements within 18 months of date of incorporation and subsequently, 6 months of financial year-end.Within 18 months of incorporation and subsequently 6 months of financial year-endS.248 of Companies Act
1.7Duty to circulate copies of Financial Statements (FS)Every company shall send copy of FS for each financial year to every member of company, every person entitled to receive notice of general meetings, every auditor of company and every debenture holder of company on request being made, to the last known address provided to the company.Within 6 months of financial year-end for private companyS.257 & S.258 of the Companies Act
1.8Duty to lodge financial statements and reports with the RegistrarThe financial statements and reports in the case of private company, has to be lodged with SSM via XBRL format within 30 days from the date the financial statements and reports are circulated to its members.Within 30 days from the date of circulation of financial statements and reportsS.259 of the Companies Act
1.9Audited Financial StatementsEvery company is required to circulate its audited financial statements to shareholders and auditors unless the companies are exempted based on the Practice Directive entitled “Qualifying Criteria for Audit Exemption for Certain Categories of Private Companies” issued by SSM.The following companies are eligible for audit exemption:-(a) dormant companies(b) zero-revenue companies(c) threshold-qualified companiesS. 267(2) of the Companies Act & SSM Practice Directive 3/2017

2.0 Directors’ duties and prohibition under the Companies Act 2016

No.DescriptionCompliance Time FrameReference
2.1Disclosure of interest in contracts, property, offices, etcAny director (including person connected with that director) who is directly or indirectly interested in a contract or proposed contract with the company shall as soon as possible as practicable, declare the nature of his interest at the meeting of the Board of Directors. The interested director must refrain from voting at the contract or proposed contract.ImmediateS.221 of Companies Act
2.2Loans to director & prohibition of loans to persons connected with directorsA company (other than an exempt private company) shall not make a loan to a director of the company or a related company or person connected with a director. Note : An exempt private company (“EPC”) means a private company in shares of which no beneficial interest is held directly or indirectly by any corporation and which has not more than twenty members none of whom is a corporationImmediateS.224 & S. 225 of Companies Act
2.3General duty to make disclosureA director shall give notice in writing to the company in respect of particulars of any change relating to shares, debentures, participatory interest, rights, options and contracts in the company or in related corporationWithin 14 days from occurrence of eventS.219 of Companies Act
2.4Any changes of particulars of director, manager and secretaryAny changes in the name, nationality, residential address, service address, business occupation, particulars of other directorships of public companies or its subsidiaries, IC/Passport number of directors including date of resignation, removal, retirement, not re-elected and death. In case of death, to provide death certificate.Within 14 days from the date of changeS.58 of Companies Act
2.5Any changes to the Business Address and/or Nature of BusinessWhere a company has resolved to change its business address or its nature of business, the company is required to notify SSM within 14 days form the date of such change .Within 14 days form the date of such change.SSM Practice Directive 2/2017

3.0 Responsibilities as Employers

No.DescriptionCompliance Time FrameReference
3.1Register with the Employees Provident Fund (EPF) BoardWithin 7 days of employment of first employeewww.kwsp.gov.my
3.2Register with the Social Security Organisation (SOCSO)Within 30 days of the date on which the Employees Social Security Act (ESSA) becomes applicable to the companywww.perkeso.gov.my
3.3Register Employer Tax File (E number) with Inland Revenue Board (IRB)Anytime before payment of salaries to employeeswww.hasil.gov.my
3.4Register with the Human Resources Development Corporation (Applicable to companies listed under Part 1, Schedule 1 of PSMBA)With effect from 1 April 2017, Registration with HRDF is compulsory if the employer hire ten (10) or more local employees in 63 sub-sectors.Within 30 days of incorporationwww.hrdf.com.my
3.5Register with the Employment Insurance Scheme (EIS)As soon as possiblewww.perkeso.gov.my

4.0 Obligations under Income Tax Act

No.DescriptionCompliance Time FrameReference
4.1Notification to Inland Revenue Board (IRB) to obtain Company Tax Registration Number (C number)Anytime before filing of first tax returnwww.hasil.gov.my
4.2Estimate of Tax PayableEvery Small and Medium Enterprise (SME) must furnish an estimate of its tax payable. With effect from Y/A 2014, where the SME which commences operations has no basis period for that year of assessment and for the immediate following year of assessment, the SME is not required to furnish an estimate of tax payable for that year and for the immediate 2 following years of assessment.First 2 years of assessment (YA) from the date of commencement of operations exempted. Nevertheless, it is advisable to submit the Form CP204 notifying the IRB of its SME status without having to state the amount of ETP to avoid any penalty for under-estimation of tax or penalty for non-submission being wrongly imposed by the IRB.Third year of assessment onwards: 30 days before the beginning of the basis period
4.3For companies (except SME) which first commence operations Generally, SME refer to resident companies that has a paid-up capital in respect of ordinary shares of RM2.5mil and lessWithin 3 months from date of commencement of operations only if the basis period for that year is not less than 6 months
4.4Submission of revised estimate of tax payableYou can submit the CP 204A to revise the estimate of tax payable in the sixth or/and ninth month of the basis period
4.5Submission of income tax return(must be prepared based on audited accounts w.e.f YA 2014)You must submit Form e-C within 7 months from the date following the close of its accounting period