SDN BHD COMPANY & INCORPORATION PROCEDURES

Q: What is Sdn Bhd ? What are Sdn Bhd’s Advantages & Disadvantages?
Q: What is a Sdn Bhd’s organizational structure?
Q: Where to Register Your Sdn Bhd Company?
Q: Can I Register My Company Directly with SSM?
Q: What is the incorporation procedures?
Q: What is the requirements to incorporate a Private Limited Company?
Q: What information/paper work required for Company incorporation?
 Q: How long does it take to incorporate a Private Limited Company in Malaysia?
Q: Once a Malaysia Company has been Incorporated, what are the Post Incorporation Issues need to be considered ?
 

DIRECTOR

Q: Who can be the Company’s director ?
Q: How many directors need to be appointed?
Q: What are the main responsibilities of director?
Q: Can a foreigner become a director of a Company?
 

SHAREHOLDER & SHARE CAPITAL

Q: What is the requirements being a Shareholder of the Company?
Q: What is the main differences between Shareholder & Director?
Q: How many shareholder need to be appointed?
Q: What are the rights of a shareholder?
Q: What are the liability of a shareholder?
Q: When and Where Must I Pay the Paid-Up Capital?
Q: What Will Shareholder’s Liabilities be if there is a high Paid-Up Capital?
Q: After money injected as the company’s Paid-Up Capital, how soon the money can be used as business expenses or investments?
 

COMPANY SECRETARY

Q: Who can be appointed as company secretary?
Q: What is the duties of company secretary?
 

COMPANY NAME SEARCH AND RESERVATION.

Q : What is a Name Search?
Q : How long does a Name Search take?
Q : What if the desired company name contain words prohibited by Minister?
Q : What is a name reservation?
Q : How long can my business name be reserved?
Q : Why Name Search Result Shows the Proposed Name is available but Name Reservation still rejected by SSM?
Q : What are the common reasons that the proposed name application will be rejected by SSM?
Q : Are there Reasons for a Delay in Name Reservation?
Q : Can an old company name be used again?
Q : For a name that has already been approved, how does an applicant change the name of the promoter stated in Name Reservation Form?
Q : Why is an applied name rejected when the applicant wishes to incorporate a subsidiary company for an existing company?
Q : Why is Name Reservation Form, which has been submitted with consent letter, still being queried by SSM?
Q : Can an approved name be transferred to another party?

 

 CONSTITUTION

Q: What is Constitution of the Company?
Q: What is MSIC Business Code? How many MISC business code should be selected

 

OTHER

Q: What is SSM and CCM?
Q: What is Business Licence requirements in Malaysia ?
Q: What is Common Seal and Statutory/ Register Book? Do Common seal, statutory/ register book have to be kept at registered office?
Q: What is Company Number?
Q: Different between Registered office and Business Address?
Q: Appointment of First Auditor?
Q: How to determine the financial year end for a new company?
 

BANK ACCOUNT(S) OPENING.

Q: What information is needed for bank account opening
Q: When the new company can proceed with bank account opening
Q: Can open bank account without a physical presence in Malaysia and How long does it take?
 

ANNUAL GENERAL MEETING & ANNUAL RETURN.

Q: Financial Statements?
Q: Annual return?
 
 

FAQ – REGISTRATION OF COMPANY

SDN BHD COMPANY & INCORPORATION PROCEDURES

Q: What is Sdn Bhd ? What are Sdn Bhd’s Advantages & Disadvantages?

Private limited company (popular known as ‘Sendirian Berhad’ or ‘Sdn. Bhd.’) is the most common type of business vehicle for doing business in Malaysia. Sdn Bhd provides limited liability protection to shareholders (i.e. business owners). The limited liability protection protects the entrepreneurs against trading losses, especially when working within an unstable and ever-changing economic climate.

Advantages of Forming a Company:-

  • Limited liability protection. Shareholders/Owners’ personal assets are not put at risk should the business fail. Shareholder’s liability is limited to the amount of shares subscribed.
  • Easy transfer of ownership. Ownership is easily transferable through the sale of shares.
  • Unlimited life. When a Sdn Bhd’s owner incurs a disabling illness or dies, the company does not cease to exist.
  • Raise capital more easily. Additional capital can be raised by selling shares to new investors (not allowed to sell shares to the public).
  • Sdn Bhd may be perceived as a more professional/legitimate entity than a sole proprietorship, conventional partnership or limited liability partnership. Customer / Commercial partners will have more confidences in dealing with your Company.
  • Easier Access to Funding. Forming a company will add to your business creditability. This makes it easier to secure finance for your business with less personal risk.
  • Greater Tax Advantages. More business expenses may be tax-deductible. more tax deductible expenses, tax incentives and lower tax rates
  • Conversion into Public Listed Company. Should the Company grows to a level that need access significant funding from public, then Sdn Bhd can be converted into a Public Listed Company.

Disadvantages of Forming a Company:-

  • Stringent Compliance Requirements. There are relatively more compliances requirements for Sdn Bhd compared to other business types. For example, Sdn Bhd is required to have annual statutory audit. Find out more on Compliance Requirements for a Sdn Bhd Company.

Q: What is a Sdn Bhd’s organizational structure?

The organizational structure of a Sdn Bhd includes three groups - Shareholders, Directors and Officers. A Sdn Bhd Company is owned by shareholders; however, they do not typically directly manage the company. Instead, they influence corporate decisions through electing and removing directors, approving or disapproving amendments to the Articles of Incorporation and voting on major corporate issues.

The directors, who comprise the “board of directors,” are responsible for managing the affairs of the Company. They usually make only major business decisions, and appoint and supervise officers, who make the day-to-day business decisions. Officers are responsible for the everyday company management.

A shareholder may serve on the board of directors and as an officer. In fact, this is common for most SMEs in Malaysia where shareholder(s) also serves as the director and officer.

Q: Where to Register Your Sdn Bhd Company?

All Sdn Bhd Companies need to be registered with the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia or SSM in Malaysia), SSM Malaysia is a statutory body which regulates companies and businesses. Besides that, you must engage a qualified company secretary to go through the whole company registration process.

Q: Can I Register My Company Directly with SSM?

Yes. The Promoter/Director can Incorporate the Company via SSM MyCOID 2016 System. However, you are advice to consult qualify Company Secretary Firm to ensure the information furnish are accurate and proper to avoid any error or amendment in future. Please also take note that, you are require to appoint the Company Secretary within 1 month from date of incorporation. 

Q: What is the incorporation procedures?

Incorporate Your Company With Yau & Co. In 3 Fast & Easy Steps

  1. Choose a package
  2. Complete the online company setup form
  3. Sign the company incorporation documents

Q: What is the requirements to incorporate a Private Limited Company?

The requirements to form a Company are:

  1. Minimum of one shareholders and minimum paid up capital of RM1;
  2. Minimum of one Malaysia resident directors; and
  3. A qualified company secretary.

Q: What information/paper works are required for Company incorporation?

If you incorporate a company through YAU & CO, simply complete out Online Company Set-Up Form or email us the following information and we will prepare and file the relevant incorporation documents with SSM.

  • Proposed company names
  • Principal business activities of the new company setup (max 3)
  • Photocopy of all directors’ & shareholders’ I/C or Passport;
  • Particular of director & shareholder (e.g. Name, NRIC No, residential address, email address, contact no. and race) *** residential addresses of all directors with proof of address such as utilities (if different from IC)
  • Paid-up capital information (min RM1 per share)
  • Number of Share for each shareholders.

Incorporation documents to be lodged with SSM

  • Name Reservation Form;
  • Super Form; 
  • Constitution of the Company (optional)

Q: How long does it take to incorporate a Private Limited Company in Malaysia?

Based on YAU & CO.’s past experiences dealing with SSM, the entire company registration process will take averagely 7 working days. Having said, Yau & Co.’s Expedited Processing Services successfully help our client register a company within 1-2 working days provided all information are complete. Please note that the incorporation timeline is very dependent on the accuracy and completeness of information and documents and also subject to the availability & stability of SSM’s MyCoID online system.

No公司注册程序Working Days
1 Company name reservation with SSM Malaysia24 hours
2 Once name approved by SSM , we will prepare the registration documents1* - 3
3 Signing of documents by all directors & shareholders(depend on client arrangement)
4 Submission to SSM for registration of your new company1* -2
5 Notification of Registration issued by SSM1 (depend on SSM approval)
   
Estimated Timeline for New Company Registration7

* Expedited Processing Service Expedited Processing Service speeds the turn-around time for your order. Yau & Co. prioritizes your order above non-expedited orders. Incorporation documents will be ready for directors/shareholders’ signatories within 1 business day after we receive full payment & complete information. Submission to SSM for registration of your new company within 1 business day after received complete signed incorporation documents.

Q: Once a Malaysia Company has been Incorporated, what are the Post Incorporation Issues need to be considered?

After your Malaysia Company has been setup, you can start your business activities immediately. However, you may need to do some or all of the following if applicable to you:

  • Open bank
  • If your business requires one or more licenses, you may need to obtain the relevant licenses first before you can commence your business
  • Register for Goods & Services Tax (GST) if necessary. The registration of GST is not mandatory unless your annual turnover exceeds RM500,000. We can help you register for GST.
  • If you intend to hire local employees (Malaysia citizens and/or permanent residents) you will need to open an account with the Employment Provident Fund (EPF) - a percentage of the local employees’ salaries will be contributed to the EPF Board on a monthly basis as part of their retirement fund. We can help you register your company EPF account and manage your staff payroll, if required.
  • You will need to decide on your company’s fiscal year end, which can be any date within 18 months from the date of incorporation. You will need to keep track of your income and expenses (bookkeeping) according to Malaysia accounting standards. Depending upon the volume of transactions, we can provide bookkeeping services either on a weekly, monthly, quarterly or yearly accounting basis.

DIRECTOR

Q: Who can be the Company’s director ?

  1. Natural person.
  2. Minimum aged of 18 and above.
  3. He or she is not a bankrupt and has not been convicted and imprisoned.

Q: How many directors need to be appointed?

Pursuant to Section 196(1) of the Companies Act, 2016 that a company shall have the minimum number of directors as follow:-

  • Private Company - one director ; and
  • Public Company - two directors.

The director must be ordinary reside in Malaysia by having a principal place of residence in Malaysia and exclude an alternate or substitute director.

The requirement of residency is mainly to ensure that there is a point of contact in Malaysia and for purposes of enforcement. Yau & Co’s Nominee Director Services could help you in fulfilling these requirements.

Q: What are the main responsibilities of director?

  • The directors manage the company's business in accordance with the company's Constitution and the law.
  • Disclosure of interest in contracts, property, offices and etc.
  • General duty to make disclosure pursuant to Section 219 of the Companies Act, 2016.
  • Any changes of particular (e.g. change of address, resignation and etc.)
  • Compliance with all Corporate Compliance Requirements

Q: Can a foreigner become a director of a Company?

Any person aged above 18 years old can be appointed as director. Before a person can be appointed as a director, he must make a declaration with SSM a statutory declaration declaring that he is not disqualified from being a director and he is consent to act as a director of the company.

In summary, a foreigner can be appointed as a directors provided he is not disqualified from being a director and company has fulfilled the requirements under Section 196(1) of the Companies Act, 2016 for private and public company. Please note that a foreigner would be considered as resident director if his principal place or only place of residence within Malaysia i.e. he has employment pass or permanent resident pass in Malaysia.

SHAREHOLDER & SHARE CAPITAL

Q: What is the requirements being a Shareholder of the Company?

  1. Minimum aged of 18 and above.
  2. He or she is not a bankrupt and has not been convicted and imprisoned.

 

Q: What is the main differences between Shareholder & Director?

The shareholders (also called members) own the company by owning its shares i.e. owners of the company whilst the directors are appointed by shareholders to manage a company. Although the roles are completely distinct, a single person can assume both positions (both directors and shareholders are the same group of persons), or lots of different people can fulfill these roles.

Directors

  • Also known as company officers.
  • Can also be shareholders.
  • Appointed to a company at the discretion of its shareholders.
  • Responsible for managing a company lawfully and ethically in accordance with the Companies Acts and the Articles of Association.
  • Required to run a business within their powers.
  • Expected to promote the success of a business with a view to making a profit for the benefit of the company and its shareholders.
  • May receive a salary and dividend payments.
  • Their rights and powers are determined by the shareholders
  • Legally responsible to ensure company is complying with all corporate compliance matters such as filing true and fair annual accounts, Annual Returns, and Company Tax Returns within the deadlines, and ensuring all required taxes are paid on time.
  • Can be removed and disqualified if they are incompetent, display ‘unfit’ conduct or breach their contract in any way.
  • Can be held personally liable and prosecuted should they fail to uphold their legal responsibilities and duties.
  • Normally authorised to issue and transfer shares in a company, but this depends on the Constitution & Companies Act, 2016.

Shareholders

  • Also known as members. The first shareholder is known as subscriber.
  • Can be a natural person or a corporate body.
  • Own some or all of a company through shares.
  • Liability is limited to the nominal value of their shares. Should the company run up any debts, they are only responsible for the amount of their shares.
  • Can also be directors.
  • Not involved with the everyday activities of the company, unless they are also directors.
  • Have the power to appoint and remove directors and company secretaries at any time.
  • Can choose what powers and rights the company directors have.
  • Proportion of ownership depends on the number, value and class of shares held.
  • Their voting rights, capital rights and dividend rights depend on the Prescribed Particulars of their shares.
  • Will make decisions about significant issues such as changing the company name or structure, investment opportunities, issuing shares, appointing an auditor to inspect the accounts, appointing or removing a director, changing a director’s powers, changing the Constitution or Shareholders’ Agreement.
  • Normally have a right to any surplus capital if the company is wound up.

Q: How many shareholder need to be appointed?

  • Statutory minimum number of shareholder is 1 for private company only.

Q: What are the rights of a shareholder?

While the day-to-day management of the company is the responsibility of the company’s Board of Director, the shareholders’ may exert a significant indirect influence by exercising the rights and powers available to them. The rights to them are accorded by the Companies Act 2016, the Constitution and shareholders’ agreement (if any).

  • Rights at shareholders’ meetings i.e. can speak and vote on resolution
  • Voting out directors
  • Electing to sell their shares
  • Right to receive dividend
  • Right to restrain the company from acting ultra vires
  • Right to approve any change in name of company
  • Right to ensure due observance of the company’s Constitution and Companies Act 2016
  • Right to receive a copy of the financial statement
  • Right to appoint and remove auditor
  • Right to return of capital on winding-up
  • Right to call a meeting
  • Right to appoint proxies
  • Right to request company in writing to provide information held by the company (with a right to appeal to the court if the company refuses)
  • Right to inspect statutory records [register of members, minutes book, register of directors, managers and secretary]

Q: What are the liability of a shareholder?

A shareholder of a Company Limited by shares (Sdn Bhd), is not liable for the company’s obligations/liabilities. The liability of the shareholder is limited to any amount unpaid on the shares held by him in the event of winding up.

 Q: When and Where Must I Pay the Paid-Up Capital?

The issued share capital must be paid up immediately upon incorporation. Therefore, YAU & CO.’s standard incorporation packages only support paid up capital from RM1 per share to RM1,000 as we assuming shareholders paid for the first subscription shares with cash (without asking payment proof). If the intended paid up capital is more than RM1,000, clients are advised to incorporate the Company with minimum statutory paid up capital – RM1 per share and subsequently increase the paid up capital to the desired account after bank account opened so that shareholders could provide the payment proof into the corporate bank account.

Q: What Will Shareholder’s Liabilities be if there is a high Paid-Up Capital?

Paid-up capital is money paid in by shareholders to the company to purchase shares. These funds can be used for all company expenses, including paying off all company debts. There is no personal liability on an individual shareholder if the necessary amount for the subscribed shares is fully paid. In the event that this amount is not fully paid, the creditors can demand that the shareholder be personally responsible for the shortfall.

Q: After money injected as the company’s Paid-Up Capital, how soon the money can be used as business expenses or investments?

There is no lockup period as such. You can immediately start using capital for your company needs.

COMPANY SECRETARY

Q: Who can be appointed as company secretary?

  • Sections 235 of Companies Act 2016 requires every company to have at least one secretary of whom his principal or only place of residence is in Malaysia. (please refer YAU & CO.’s Cost Effective Secretary Services)
  • Not disqualified under Section 238 of Companies Act 2016, i.e.
    • He is an undischarged bankrupt
    • He is convicted whether within or without Malaysia of any offence –
      • in connection with the promotion, formation and management of a company;
      • convicted imprisonment for 3 months or more for fraud or dishonesty
    • He ceases to be a member of the body prescribed by the Minister (in the case of LS)
    • He ceases to be a holder of a valid license issued by their prescribed bodies
  • No person shall act as a secretary of a company unless:
    • He is a member of a professional body;
    • The Malaysian Association of the Institute of Chartered Secretaries and Administrators (MAICSA)
    • The Malaysian Institute of Accountants (MIA)
    • The Malaysian Institute of Certified Public Accountants (MICPA)
    • The Malaysian Bar
    • The Sabah Law Association
    • The Advocates’ Association of Sarawak
    • The Malaysian Association of Company Secretaries (MACS); or
    • He is licensed (LS) by the Registrar of companies (SSM)

Q: What are the major duties of company secretary?

  • Understand and interpret the clauses in Constitution, Companies Act 2016 and any laws.
  • Maintain statutory registers –keeping and updating the registers
  • Update changes of the company to SSM by lodging the necessary forms and documents
  • Ensure compliance with the Companies Act 2016
  • Liaise with shareholders
  • To handle all paperwork, statutory documents and procedural matters which involve the running of a company.
  • File audited accounts and annual return within the time required under the CA 2016
  • Protect the company’s assets (company’s statutory registers)
  • Oversee arrangement to allow shareholders and others to inspect certain statutory registers of the company.

COMPANY NAME SEARCH AND RESERVATION

What is a Name Search?

A Name Search is performed by Yau & Co. using SSM MyCoid System as an initial step to ensure that your desired company name is available. Please note, this is only a preliminary Name Search. Final approval of the name is granted by SSM upon review of Name Reservation Form.

How long does a Name Search take?

Yau & Co. can notify you the availability of your desired company names within 24 hours (one working day). Please bear in mind that a name search conducted before the incorporation documents are submitted is considered preliminary. The final determination of business name availability rests with SSM.

What if the desired company name contain words prohibited by Minister?

You could apply to the Minister, stating the reasons or justifications for using such names or words as part of the proposed name by the company, together with a payment of RM300.00. The reply to the application for the consent normally takes some time. Therefore if the proposed company needs to be registered urgently, it would be advisable for the company to be incorporated under another approved name first, and subsequently, an application for the Minister's consent be obtained and thereafter effect the change of name of the company upon receiving the order. 

What is a name reservation?

Submission of Name Reservation Form to SSM for company name approval and reservation. Filing a name reservation will prevent another company from forming with that name.

How long can my business name be reserved?

An approved name by SSM can be reserved for maximum 180 days and RM50 for each 30 days. During the name reservation period for which the proposed name is reserved, SSM will not allow the use of the reserved name by any other person

Why Name Search Result Shows the Proposed Name is available but Name Reservation still rejected by SSM?

Name Search result from SSM Online system is not exhaustive. There were cases where name search result shows there is no one using the name. However, Name Reservation Form was rejected by SSM due to proposed name been used by another Company. Please take note that the availability of a proposed name, however, does not itself entitle the proposed company to be incorporated by that name. All name search applications are subject to the final decision from SSM.

What are the common reasons that the proposed name application will be rejected by SSM?

  • Proposed company’s name is similar to those existing ones and may cause confusion to the public (unless a consent letter are granted).
  • Proposed company’s name is similar to the former name of existing company and may create undesirable confusion to the Public members.
  • Proposed company’s name is prohibited by the Companies Act 2016 or any other relevant Acts.
  • Proposed company’s name is undesired for use as company name, for example, Ekor Ayam Sdn Bhd.

Are there Reasons for a Delay in Name Reservation?

SSM may randomly carry out a due diligence exercise, which may delay the name approval process. In addition, the business activity could be subject to control and regulation by other government authorities and hence need approval beforehand.

Can an old company name be used again?

The Company can change back to its old name after 12 months but a company cannot use the old name of another to incorporate a new company.

Why is a trade name not approved when the said name has been long used as a partnership or enterprise?

Pursuant to Section 26 Companies Act 2016, a company name will not be available if the name is identical to an existing company, corporation or business.

For a name that has already been approved, how does an applicant change the name of the promoter stated in Name Reservation Form?

If only one promoter that needs to be changed, there is no need to submit a new Name Reservation Form. The applicant can proceed with the incorporation of a company. If all the names of the promoter are to be changed, the applicant needs to submit a new Name Reservation Form together with new fees, and state the reason for this re-application.

Why is an applied name rejected when the applicant wishes to incorporate a subsidiary company for an existing company?

The applicant has to attach a consent letter by from the holding company for the purpose of incorporating a subsidiary company. Approval of name is still subject to the similarity of the existing companies.

Why is Name Reservation Form, which has been submitted with consent letter, still being queried by SSM?

SSM may raise query on the submitted Name Reservation Form due to the consent letter is not complete and / or did not comply with the regulations.

Can an approved name be transferred to another party?

Yes, an approved name can be transferred to another party by re-filling Name Reservation Form together with the fees and the consent letter from the previous applicant.

CONSTITUTION

Q: What is Constitution of the Company?

The Constitution is the document that governs the capacity, right, power or privileges of the Company, Director and Member. The Constitution shall describe the following:-

  • Company’s name
  • Location of its registered office
  • Object clauses (optional)
  • the capacity, right, power or privileges of the Company
  • any matters as the Company wished to include in its constitution

A private company may adopt a constitution after incorporation.

If a company does not have a constitution, the Companies Act 2016 shall govern the internal administration of the company.

Existing companies will have its Memorandum and Articles of Association deemed to be the new Constitution. If there is an inconsistency between the constitution and the new CA, the provisions of the new CA shall prevail.

 

Q: What is MSIC Business Code? How many MISC business code should be selected

The Malaysia Standard Industrial Classification (MSIC)/ business code is used in the collection, compilation and publication of statistics. The MSIC is intended to be a standard classifications of productive economic activities. Its main purpose is to provide a set of activity categories that can be utilised for the collection and presentation of statistics according to such activities. Generally, we advise our client to select only one (1) MISC business code that most relevant to the Company as SSM only allow one MISC business code for each object clause/ business activities. Furthermore, every MSIC code may constitute a separate business activity which need to report separately for accounting, tax or GST purposes. You could find the MSIC online or refer to the SSM MSIC Code - ROC

Others

Q: What is SSM and CCM?

SSM or Suruhanjaya Syarikat Malaysia is the malay term of CCM or Companies Commission of Malaysia. They serve as a government agency to incorporate companies and register businesses as well as to provide company and business information to the public.

Q: What are Business Licence requirements in Malaysia ?

Before a business can legally start operating, businesses are required to comply with some form of licensing, which could be a general licence, an industry/sector specific licence or activity specific licence. Business licences are required by the legislation and administered by various government agencies, statutory bodies and local authorities. Business licences includes registrations, approvals, licences and permits. The compliance requirements vary by industry, business activity and location. Business licences can be categorized into 3 different logical groups, namely: (1) General licences (2) Sector Industry Specific licences; and (3) Activity Specific licences. 

Q: What is Common Seal and Statutory/ Register Book? Do Common seal, statutory/ register book have to be kept at registered office?

The common seal of the company shall be only used with the authority of the directors or of a committee of the directors authorised by the directors in that behalf, and every instrument in which the seal is affixed shall be signed by a director and countersigned by the secretary or second director.

The Statutory/ Register Book and common seal are normally kept at the registered office of the Company (Company Secretary’s office).

Q: What is Company Number?

The Company number means:-

  1. In relation to a company, the number allocated to it by SSM on its Incorporation;
  2. In relation to a foreign company, the number allocated to it by the SSM on its registration; and

In relation to a proposed company, the reference number allocated to when a proposed name is approved by SSM.

Upon incorporation of a Company, the company number and the name of company must appear on the seal and all business letters, statements of account, invoices, official notices, publications, bill of exchange, cheques or letters of credit of or purporting to be issued or signed by or on behalf of the company under the Section 30(2) of the Companies Act, 2016.

Q: Different between Registered office and Business Address?

A company shall as from the date of its incorporation, have a registered office within Malaysia to which all communications and notices may be addressed and which shall be open and accessible to public pursuant to Section 46 of the Companies Act, 2016. Generally, most of the Companies (Sdn Bhd) are using their company secretary office as the registered address.

Whereas the Business Address is a place for conduct the business activities at any place in Malaysia, be at your home, shop, factory or even you don’t need to have business address as this is not required by SSM at the time of Company registration.

The use of YAU & CO.’s office premise as your company’s Registered Address is free when you engage us on Incorporation Services or Secretarial Services. Please note that the registered address is merely for fulfilment of statutory requirements under the Companies Act.

YAU & CO. also offers cost effective and reliable Virtual Office Solutions

Q: Appointment of First Auditor?

Every company must appoint an auditor under the Companies Act, 2016. An auditor is a person who principal task is to examine the financial statements and record of the undertaking and report whether in his opinion they properly reflect the activities of the undertaking during the period under review and of its assets and liabilities at the end of that period.

The directors of a company are obliged at any time after a company is incorporated and at least 30 days before the end of the period for the submission of the first financial statements to the registrar to appoint a person or persons to be the auditor or auditors of the Company.

Q: How to determine the financial year end for a new company

Section 2 of the Companies Act 2016 defines financial year in relation to any corporation as the period in respect of which any financial statements of the company is made up whether that period is a year or not. In short, financial period is the Company’s accounting period.

As the CA 2016 does not specify the date in which a financial year shall commence or end, the decision to determine the financial year, including any changes thereof, is entirely at the discretion of the company.

Nevertheless, Directors shall prepare financial statements under Section 248 (1) of CA 2016 within 18 months from the date of its incorporation and subsequently, 6 month of its financial year end. Most companies use either the end of the calendar year (December 31) or the end of any of the quarter (March 31, June 30 or September 30) as their fiscal year end date. 

Therefore, to determine the financial year end of the Company normally will be from 12-15 month from date of incorporation.

e.g. Incorporation date : 27 March 2017, Financial year end will be fixed at 31 March 2018. (within 12 - 15 months from the date of incorporation)

BANK ACCOUNT(S) OPENING

Q: What information is needed for bank account opening

Different bank(s) will have different requirements as to the opening of bank account. You are advised to visit the Bank to understand the bank account opening requirements and procedures. We will help to prepare the resolution for bank account opening, please furnish us the following information:-

  1. Bank's name, branch and address
  2. Type of account - e.g. current account, internet banking, foreign currency account etc. (Sample/Format of opening account resolution as provided by bank)
  3. Authorised signatories details (name as per IC, IC number, designation [if not Company Director])
  4. Mode of operation (solely or jointly or etc.)

Q: When the new company can proceed with bank account opening

Once the company incorporated successfully (Notice of Registration will be issued by SSM), you could proceed with the application for bank account opening together with all the relevant documents required. To expedite the bank account opening, there are some banks accept pre-incorporation submission of the application forms and verification of authorised signatories. Please consult your banker(s) accordingly.

Q: Can open a bank account without a physical presence in Malaysia and How long does it take?

Generally, banks in Malaysia require all the Directors/ Authorised Signatories to be physically present in Malaysia for the signing of official documentation at the time of opening of Bank account. However, some banks accept documents that are signed in–person at one of their overseas branches or witnessed by a notary public. Additionally, the banks may require additional documents on a case-by-case basis. Be forewarned that all banks in Malaysia must comply with stringent laws and regulations. They therefore will carry out a comprehensive series of checks and investigations on their potential clients before opening a new account for a company. This is not only to safeguard their risks against any potential default, but also are a part of their regulatory compliance and stringent anti-money-laundering policies. Thus, a company involved in dealings that are not above-board will not find it easy to engage in such transactions. We highly recommend our clients to be present in Malaysia to open the bank account to avoid any delay. A bank always reserves the right to request the beneficial owner to be physically present prior to the approval of a bank account.

FINANCIAL STATEMENTS & ANNUAL RETURN

Q: Financial Statements

Financial Statements shall comprise of the following:-

  • A profit and loss account for the period since last account.
  • A balance sheet as at the period of the financial year.
  • The directors of every company with responsible to prepare the financial statements within 18 months from date of incorporation and subsequently, 6 months from financial year end.
  • For Private Company, the financial statements shall be duly audited before circular to every member. The Circulation for a private company is within 6 months of its financial year end. 
  • For Private Company, the Financial statements for each financial year shall be lodged with the registrar within 30 days from the circulation to its members.

Q: Annual return?

Pursuant to Section 68 (1) of the Act, the Company shall lodge the Annual Return for each calendar year not later than thirty (30) days from the anniversary of its incorporation date to the SSM. 

Annual Return will be prepared by us accordingly, however, we need your co-operative to update us immediately if there is any changes in the Company's particulars:-

  1. Nature of its business;
  2. Business address(es) and branches address ;
  3. Address at which its financial records are kept;
  4. Change of shareholding/directorship;
  5. Total amount of its indebtedness; and
  6. Particulars of company, directors, managers, shareholders and auditors (i.e. contact details - address, contact number and email address).