Who signs off your company's financial statements in Malaysia — and what happens legally if they are wrong? Under the Companies Act 2016, company directors' financial reporting duties are personal, statutory and non-delegable.
In this guide, we discuss directors' duties under the Companies Act 2016 when preparing, approving and lodging financial statements. We cover deadlines, fees, exemptions, penalties and how a Corporate Services Provider can help directors comply.
What Does the Companies Act 2016 Require of Directors?
Directors must keep proper accounting records and prepare true and fair financial statements that comply with the approved accounting standards in Malaysia.
Section 245 of the Companies Act 2016 requires the company, directors and managers to keep proper accounting records. These records must enable the preparation of true and fair financial statements. Section 246 also requires directors of public companies and their subsidiaries to maintain a system of internal control.
Directors may engage Corporate Professional Advisors to prepare the accounts. Their statutory responsibilities remain with them. The Companies Commission of Malaysia (SSM) administers the Act and provides guidance on annual submissions. Company officers must ensure lodgement within the prescribed period.
Under Section 248, directors prepare the financial statements. They must approve them and attach a separate directors' report under Section 252 before circulation.
1. Maintaining Proper Accounting Records
Records must be sufficient to explain the company's transactions, reveal its financial position with reasonable accuracy, and allow statements to be conveniently and properly audited. Records must be kept for seven years after completion of the relevant transactions or operations.
2. Preparing True and Fair Financial Statements
Statements must follow the approved accounting standards applicable to the company. These include the Malaysian Financial Reporting Standards (MFRS) or, for eligible private entities, the Malaysian Private Entities Reporting Standard (MPERS).
3. Preparing the Directors' Report
Under Section 252, directors must prepare, approve and attach a directors' report to the financial statements. Separately, Section 251 requires a directors' statement on whether the statements give a true and fair view. Each document must be signed by at least two directors, or by the sole director.
When Must Financial Statements Be Lodged With SSM?
A private company must lodge its financial statements within 30 days of circulating them to members; a public company has 30 days from its annual general meeting (AGM).
Timing is where most directors stumble. The lodgement clock does not start at financial year end — it starts when the statements are circulated or presented to members.
A private company must circulate its financial statements within six months of financial year end. It must lodge them with SSM within 30 days of circulation. A public company must generally circulate its statements at least 21 days before the AGM and lay them at the meeting; a shorter circulation period is permitted if all members entitled to attend and vote agree. It must generally hold the AGM within six months of year end and 15 months of the previous AGM. It then lodges the statements within 30 days of the AGM.
Lodgement is made through the Malaysian Business Reporting System (MBRS). The free offline MBRS Preparation Tool (mTool) validates data and generates an XBRL file. The submission is made through the online MBRS Portal, accessed through SSM4U. Only an appointed licensed company secretary or the company's agent may lodge the documents.
1. Preparation and Approval
Statements and the directors' report are finalised, approved by the board and signed. For companies requiring an audit, the auditor's report is included.
2. Circulation to Members
A private company circulates its statements within six months of financial year end. A public company generally circulates them at least 21 days before its AGM and lays them at the meeting; a shorter circulation period is permitted if all members entitled to attend and vote agree.
3. Lodgement Through MBRS
Within 30 days of circulation (private) or of the AGM (public), the appointed company secretary lodges the XBRL file via the MBRS Portal.
Key Financial Reporting Deadlines Under the Companies Act 2016
| Requirement | Private Company | Public Company |
|---|---|---|
| Circulation / laying of financial statements | Generally within 6 months of financial year end | Generally circulate at least 21 days before the AGM and lay at the AGM; shorter circulation is permitted with agreement of all members entitled to attend and vote |
| Lodgement with SSM via MBRS | Within 30 days of circulation to members | Within 30 days of the AGM |
| Annual return lodgement | Within 30 days of the anniversary of incorporation | Within 30 days of the anniversary of incorporation |
| Underlying record retention | At least 7 years | At least 7 years |
Which Companies Are Exempt From Audit and Full Lodgement?
Eligible private companies may elect for audit exemption, while qualifying exempt private companies may lodge a certificate instead of full statements.
Audit exemption and relief from lodging full statements are different. Neither removes the duty to keep records and prepare financial statements.
Under SSM Practice Directive 10/2024, an eligible private company may elect for audit exemption without applying to SSM. It must still circulate and lodge unaudited statements and the required reports. The lodgement also includes a director-signed audit exemption certificate.
An exempt private company has no more than 20 members, none of whom is a corporation, and no corporation holds a direct or indirect beneficial interest in its shares. Under Section 260, it may instead lodge an EPC certificate within 30 days of circulation. The certificate confirms that audited statements have been circulated and that the company appeared able to meet its liabilities. It must be signed by a director, the secretary and the auditor. A company choosing this certificate route cannot also elect for audit exemption. SSM lists the certificate lodgement fee as RM200.
Applications for extensions or other relief are separate from audit exemption. SSM lists a RM100 fee for each extension, waived-lodgement or relief application.
1. Exempt Private Company Status
Exempt private company status concerns ownership, not audit exemption by itself. The Section 260 certificate is an alternative to lodging the full statements, subject to its conditions.
2. Audit Exemption Criteria
For financial periods starting in 2026, at least two criteria must be met: revenue and total assets of no more than RM2 million each, and no more than 20 qualifying full-time employees, subject to the specified exclusions. The assessment covers the current and two preceding financial years. SSM's phased thresholds depend on the period being assessed. A company may also qualify if dormant since incorporation, or during the current and preceding financial years. Exclusions apply, including to public companies, their subsidiaries and foreign companies. An audit may still be required by eligible members, the Registrar or other applicable requirements.
3. Extension of Time Applications
Where deadlines cannot be met, apply for an extension with the applicable fee within SSM's prescribed lead time; for a private company, this is at least seven days before the relevant circulation or lodgement deadline, and approval is not automatic.
SSM Lodgement Fees for Financial Statements and Annual Returns
| Document | Company Type | Fee (RM) |
|---|---|---|
| Annual return | Private company | 150.00 |
| Annual return | Public company | 500.00 |
| Annual return | Foreign company | 500.00 |
| Audited financial statements and reports | Private company | 50.00 |
| Non-audited financial statements and reports | Private company | 20.00 |
| Audited financial statements and reports | Public company | 200.00 |
| Financial statements and reports | Foreign company | 200.00 |
| Extension of time / waiver / relief application | Per application | 100.00 |
What Happens if Directors Breach Their Reporting Duties?
Reporting breaches can expose the company or its officers to fines, depending on the offence, and may lead to prosecution.
The Companies Act 2016 specifies the persons liable for each reporting offence. Depending on the provision, liability may apply to the company, its officers or directors.
For a breach of the lodgement duty under Section 259, every officer who contravenes the section commits an offence. On conviction, the fine may be up to RM50,000. A continuing offence may also attract a daily fine after conviction. SSM may offer a compound as an alternative to prosecution.
Weak financial reporting can also create tax exposure. The Inland Revenue Board of Malaysia (LHDN) generally requires Form e-C within seven months of the accounting period end. Disorganised accounts can therefore affect both tax and Companies Act compliance. If your company's structure spans borders, our guide to MNCs in Malaysia provides further business context.
1. Fines on the Company
The company may be liable for a fine under the reporting provision that applies to a particular breach.
2. Personal Liability for Officers
Officers who contravene Section 259 may be fined personally. A continuing breach may attract an additional daily fine after conviction.
3. Tax and Audit Ripple Effects
Poor records delay the Form e-C filing due to LHDN within seven months of year end, and can complicate statutory audits for companies that are not exempt.
Who Is Responsible for What in Financial Reporting
| Task | Primary Responsibility | Can It Be Delegated? |
|---|---|---|
| Internal control system and proper accounting records | Directors | No — statutory duty under Section 245 |
| Preparation of true and fair financial statements | Directors, supported by Corporate Professional Advisors | Preparation may be outsourced; responsibility may not |
| Directors' report | Directors | No — must be signed by director(s) |
| Circulation to members / laying at AGM | Company officers | Administration may be delegated |
| Lodgement with SSM via MBRS | Licensed company secretary or company's agent | Yes — only they may lodge |
| Corporate tax return (Form e-C) to LHDN | Directors (responsible persons) | Preparation may be outsourced; responsibility may not |
How Can Directors Discharge Their Duties Effectively?
Directors can rely on three practical safeguards: a disciplined compliance calendar, professionally prepared accounts, and a company secretary who manages lodgement on time.
In practice, the directors we support avoid penalties not through heroic effort but through routine. A fixed reporting calendar, a capable preparer and an appointed company secretary together close almost every gap that leads to late lodgement.
Directors should review draft statements critically before signing — the signature is a personal attestation, not a formality. Sector-specific reporting treatments may apply. A food-truck or café business may face different revenue-recognition and inventory issues from a services firm. Our guide to starting a food truck business in Malaysia provides context for planning the business from day one.
To discuss these safeguards and your reporting needs, contact our team.
1. A Compliance Calendar
Fix the key dates — year end, board approval, circulation, AGM (if public), lodgement and the LHDN Form e-C deadline — and assign responsibility for each.
2. Professionally Prepared Accounts
Engaging Corporate Professional Advisors to maintain books monthly, rather than reconstructing them at year end, keeps statements audit-ready and defensible.
3. An Appointed Company Secretary
Only a licensed company secretary or agent can lodge through MBRS, so appointing one early ensures the 30-day lodgement window is never missed.
Conclusion
Directors' financial reporting duties in Malaysia rest on three pillars: proper records, true and fair statements, and timely lodgement. Sections 245, 248 and 259 of the Companies Act 2016 cover these duties. Generally, lodgement is due within 30 days of circulation for private companies or the AGM for public companies. Eligible exempt private companies may use the certificate route instead. Directors remain responsible even when preparation is outsourced.
Breaches can expose the company or its officers to fines, depending on the offence. Poor records can also create tax risk. Practical safeguards include a compliance calendar, well-maintained books and timely MBRS lodgement.
At 3E Accounting Malaysia, we help directors discharge these statutory duties with confidence. Our Corporate Professional Advisors maintain your books and prepare statements and the directors' report. Our corporate secretarial team manages MBRS lodgement and SSM deadlines. Speak to us about a reporting routine for your company.
Get Your Financial Reporting on Track
Talk to our team about preparing, approving and lodging your company's financial statements on time, every year.
Frequently Asked Questions
The directors are responsible for preparing the statements under Section 248. Section 245 also requires the company, directors and managers to keep proper records. Outsourcing preparation does not remove directors' statutory responsibilities.
A private company must lodge its financial statements within 30 days of circulating them to members, and circulation must occur within six months of financial year end. A public company lodges within 30 days of its AGM.
An eligible exempt private company may lodge a Section 260 certificate instead of full statements. It must still prepare and circulate audited statements. Audit-exempt companies generally lodge unaudited statements and the required reports and certificate.
Under Section 259, an officer who contravenes the lodgement requirement may be fined up to RM50,000 on conviction. A continuing offence may also attract a daily fine after conviction. SSM may offer a compound instead of prosecution.
Only an appointed licensed company secretary or the company's agent may lodge annual documents through the Malaysian Business Reporting System (MBRS), which combines an offline preparation tool with an online portal.
Abigail Yu
Director
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
