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Proposed name(s) for the intended company
Name of at least one (1) Promoter
Nature of business, suggested 3 main business activities
Paid Up Capital, suggested rm3,000/= and below, (paid up capital > rm3,000/= shall requires proof of funds)
Information (Full name, copy of current NRIC(for Malaysian) / Passport(for foreigner), date of birth, residential address, email, contact number & service address) of Directors & Shareholders
Bank’s information for opening bank account immediately after incorporation (optional)
The company may decide to do as many businesses as deemed necessary, however, for clarity and practical reasons, three (3) businesses (object clauses) are highlighted in the Constitution (Sec.35).
Approximately five (5) working days excluding time spend on delivery of documents for signatures, and any other external causes beyond our control.
Must be a natural person who is at least eighteen (18) years of age, including foreigners (Sec.196)
A person who is not an undischarged bankrupt (Sec.198)
A person who has not been convicted for any offences (Sec.198)
To qualify as a “local” director, one must ordinarily reside in Malaysia by having a principal place of residence in Malaysia, this rule applies to Malaysian, Malaysian PR, Malaysian Work Permit holder and foreigner, (Sec.196)
Must have minimum one (1) “local” director
No fixed maximum number of director
Foreigner can be “local” director if he/she has a principal place of residence in Malaysia
Can be an individual or a corporation
Minimum 1 and maximum 50 numbers of shareholders
Can be held 100% by another corporation (wholly own subsidiary)
Every company (private limited & public) must have at least 1 licensed / qualified secretary (Sec.236). A company may have more than one secretary.
A company may engage a licensed secretary as their fulltime employee or they may outsource to professional secretarial firm such as ASI who shall provide two (2) licensed secretaries, with a total of 35 years’ of experience, to be on board to provide better services.
Preparing and filing of statutory records, reports and other registration and amendments documents to CCM
Advising the company & Board of Directors (BOD) to comply with laws and regulations as stated in the Companies Act, 2016
Advising and assisting the BOD & Chairman in conducting board and member’s meetings according to procedures, e.g. notice, quorum, agenda, minutes
Updating the compulsory registers
Consulting on directors/shareholders disputes
Yes, the BOD may pass a board resolution to effect the changes. In place of the outgoing licensed secretary, the BOD needs to replace with another licensed secretary within 30 days (Sec.239 & 240).
ASI may assist in changing secretary.
Secretary Retainer Fee to have one to two licensed secretary on board and reminders on compulsory compliances as required by Companies Act, 2016.
Registered Office Fee to maintain a registered office that house the Registers, Minutes books (Sec.47) and the presence of licensed secretary and her team of assistants to attend to authorities and public.
Secretarial Work Fees for additional secretarial work, e.g. changes in the matters re the company, preparation of minutes, assistance in meetings, attendance to inspections, consultations, etc.
Paid-up Capital is the actual/tangible capital committed by shareholder and put into company’s bank account. Paid-up capital is the asset of the company and may not be withdraw by the shareholder. The director may use Paid Up Capital in running the business and operation of the company.
A company may issue different classes of shares, e.g. ordinary shares, preference shares (Sec.69).
By injection of additional funds and approval of shareholders by way of resolutions or meetings (Sec.75)
All paperwork to be prepared by ASI and the online filing of Return of Allotment (ROA) thereof.
Annual General Meeting (AGM) was a compulsory formal meeting under the old legislation, sec. 143 of Companies Act 1965.
However the updated Companies Act 2016, sec.340, states that it is still a compulsory meeting that a public company must hold annually, but not for private limited company.
Yes, one may provide for such meetings in the Constitution of the company, using the rules as set out in the Companies Act 2016 as guidelines on the conducts of the meeting.
One may make changes to a company from time to time:
every officer such as secretary,
The only constant is the company number that remains the same throughout the lifetime of a company.
There are three (3) methods:-
*Strike Off/ De-register the company (Sec.549)
*Voluntary winding up (Sec.439)
*Creditor’s winding up (Sec.449)
*This is the easier way to close a company, it is an application to CCM to de-list the company from CCM.
Company must be dormant / ceased operation and in a negative shareholder’s funding position
Company must have no asset and no liability owing to 3rd party
Company must close all the Bank Account (if any)
Company must paid up all the outstanding / compound with CCM / LHDN & any other body regulatory
Company must not have impending legal proceeding within or outside Malaysia
Company must not be a “Guarantor Corporation”
Updated information of the company’s affairs with CCM as evidenced by company search with CCM
Unanimous consent from all shareholders in a member’s meeting/circular resolutions
Company must close the tax file and obtained tax clearance letter from LHDN
Company does not made any return of Capital to shareholders.
There shall be 3 replies from CCM before a Company is gazette to confirm de-registration. The 1st reply may take up to 3 months, in general, the whole process will take about 12 months.
Yes. Any person who is aggrieved by the decision of the Registrar to strike off the company, e.g. directors/shareholders/creditors/debtors may apply to the Court to reinstate the name of the company into the register;
Application must be made within seven (7) years after the name has been struck off, (sec.555)
A company may wind-up voluntarily if the shareholder wish to cease operation
The company must be in net asset position
The company has sufficient assets/funds to distribute to shareholder
The company is insolvent and creditor initiate the liquidation petition.
A Licensed Secretary (Sec.236)
External Auditors (Sec.248)
Other recommended professionals
Tax Agent for Corporate Tax compliance with LHDN (IRD of Malaysia)
GST Agent for GST compliance with Kastam Diraja Malaysia (Royal Custom of Malaysia)
Human Resource consultants for payroll compliances with KWSP, SOCSO and LHDN departments
Other Operational matters, e.g. import license, trading license, specific licenses
The Directors of a company shall ensure the accounting documents and records to be kept, readily for inspections and auditing (sec.245) and are prepared according to approved accounting standards (sec.244) and are audited before circulation to every members of the company (sec.248).
Non-compliance penalty is up to five hundred thousand ringgit (rm500,000) and/or one (1) year imprisonment (sec.248)
Within eighteen (18) months from the date of its incorporation and subsequently within six (6) months of its financial year end (sec.248).
The Directors/Managers shall cause appropriate entries to be made in the accounting record within sixty (60) days of the completion of the transactions/operations (sec.245)
Seven (7) years (sec.245)
Data entry of all the accounting transactions in accordance with Malaysia Private Equity Reporting Standards (MPERS), using UBS/SQL Accounting softwares;
The entries are based on the accounting documents provided;
Perform bank reconciliations, prepare Fixed Assets Listings with Depreciation Schedule;
Generates General Ledgers, Trial Balance, Statement of Comprehensive Income (Profit & Loss), Statement of Financial Position (Balance Sheets), and bank reconciliation statements;
Attending to audit queries.
Audited opening balances from previous financial year and Fixed Assets Listings with Depreciation Schedule (for 2nd financial year onwards);
Current year’s invoices/tax invoices to clients/customers/trade debtors;
Records of receipts of payment from debtors/other parties;
Records of stock values : opening stock and closing stock (applicable to trading companies that carry stock), suppliers/trade creditors/non-trade creditors’ invoices/tax invoices, paid and unpaid;
Paid and unpaid sub-contractors’ invoices, outsource consultants’ invoices, service providers’ invoices/tax invoices;
Payment Vouchers on bank payments with proper numberings, date of payments, descriptions of nature of payments, cheque numbers, and supporting documents attached;
Cash Vouchers on petty cash payments with proper numberings, date of payments, descriptions of nature of payments and supporting documents attached;
Journal Vouchers for non-cash transactions with descriptions of nature and supporting documents;
Hire Purchase/lease Agreements, tenancy agreements, service contracts, banking facilities agreements;
Bank statements for the current 12 months plus subsequent 3 months;
Generally income tax for a company is imposed on income earned within Malaysia. There are a few exceptions that income is assessable on a world income scope and Labuan entities are subject to Labuan Business Activity Tax Act 1990.
Income Tax Act, 1967 (ITA) and the relevant Public Rulings states the rules in how a company shall be taxed, www.hasil.gov.my.
Corporate income tax rates fluctuates from year to year and are usually announced in the Budget in the month of October.
Year of Assessment 2017, 24% is the standard rate; 18% for first taxable profit of rm500,000 and below for company and LLPs which are SME.
Malaysia practice PAYE, all company must submit the estimated tax payable during the financial year and shall contribute the tax installments monthly (CP204).
There is annual tax submission of Form C, within 7 months from close of financial year end.
Although tax agent is not compulsory for a company, however, it is highly recommended due to complexity of the tax matters.
Preparation and submission of the company’s annual income tax returns (Form C & R) to Malaysian Inland Revenue Board (LHDN);
Tax computation and preparation of tax worksheets as required under ITA based on audited financial statements and additional information to be provided by the company;
Foreigners who perform services, earn dividends, interests and royalties in Malaysia shall subject to WHT, and their local counterparts are responsible to withhold such taxes and submit to LHDN accordingly, www.hasil.gov.my
Malaysia has entered into Tax Treaties with some countries to have lower tax rates.
ASI assists in submission of forms CP37.
With effect from April 2015, GST is implemented and all businesses with turnover/revenue/billings of rm500,000 must register with the customs (Kastam) to collect GST from the clients and forward to Kastam accordingly. http://gst.customs.gov.my
GST rate for 2017 is 6%
ASI assists in registration and/or monthly/quarterly submission of GST-03.
There are other taxes such as Real Property Gain Tax which imposed in real properties e.g. residential, commercial properties, lands. Foreigners and companies are subject to higher tax rate as compares to the locals.
Transactions in buying and selling of assets, including company shares shall subject to various stamp duties.
Import/Export Duties are imposed on goods and governed by the Kastam, (Royal Custom of Malaysia).
It is the responsibility of the Directors of a company to ensure the accounting documents be audited before circulation to every members of the company (sec.248).
The Directors need to appoint an independent licensed external auditor to perform this task.
The consolidated financial statements for a financial year shall include all the statements of the subsidiaries (sec.250)
Non-compliance penalty is up to five hundred thousand ringgit (rm500,000) and/or one (1) year imprisonment (sec.248)
Your Company, as an employer, upon employing employee, shall need to register with the following departments for compulsory compliance :-
KWSP (Employees Provident Funds) is a retirement funds for employees. Under this scheme, the employer shall deduct a certain % (2017:12%~13%) from the employees’ salary, top up with employer’s contribution (2017:11%) and pay into the employees’ account with KWSP, www.kwsp.gov.my ;
PERKESO/SOCSO (Social Security Organization) is a form of workmen compensation that both employees and employer need to contribute (2017: employer 1.25~1.75%, employee 0.5%) based on salary, www.perkeso.gov.my
PCB (monthly tax deduction) is the personal tax that employer is liable to withhold from the salary of the employees and forward to LHDB, www.lhdn.gov.my
The Company shall need to register with all the 3 departments as soon as possible before the due dates of 1st contribution in the following month,
All the three (3) contributions are on monthly basis and must contribute into respective department by 15th day of the following month, e.g. Feb2017 salary, contributions submit by 15th March 2017.
There will be penalty on late submission and interest charges.
Foreign employees are not required to contribute to KWSP and SOCSO, although the foreign employee may opt to do so, especially when they have the intention to stay in Malaysia for long term;
PCB is a tax liability of any individual who works or generate income from within Malaysia, regardless of the nationality of the employee/individual. It is the “tax residency” of the individual that will determine if a flat rate of the highest tax bracket (2017:28%) is applicable, or a progressive tax rates with benefits of tax rebates will applies.
Malaysian employers need to remunerate the employees and provide benefits according to the Employment Act, 1955 which protects employees with monthly salary RM2,000 and below.
Such terms and conditions shall be highlighted in an Employment Contract with the employee.
ASI may assist in preparation of such employment contract after consultation with the employer.
ASI shall provide consultation on overall payroll handling and administration
ASI assists in first registration with the respective department to obtain Employer’s numbers;
ASI assists in monthly handling of payroll, salary calculation, payslip printing, forms filling for KWSP, SOCSO and PCB and submissions thereof;
ASI arrange payments to respective department, and/or salary payments to employees;
Payroll files with all submissions shall be maintained in ASI’s office for inspections and interviews by respective departments; all such documents shall eventually return to your company.