Automatic Compound Reduction Implemented by the Companies Commission of Malaysia (SSM)
The Companies Commission of Malaysia (SSM) will implement an automatic compound reduction rate method. This method is effective as of 1 July 2019.
This measure is meant to help facilitate the settlement of compounds within a specified period. This approach encourages the corporate community to comply with the provisions of the Companies Act 1965 and Companies Act 2016. It will also allow the corporate community to enjoy higher rates of compounding without the need for appeals of reductions.
The mechanisms and the rate of compound reduction automatically are as follows:
|Payment Period from Compound Date||Subtraction Rate from Compound Origin Value|
|1 to 40 days||85%|
|41 to 60 days||75%|
|61 to 90 days||60%|
|91 to 180 days||30%|
Automatic compound reduction will be given to compounds offered for offenses under the:
- Companies Act 1965
- Companies Act 2016
Compounds are applicable under the two acts, except:
- Compounds for Out-of-Court Settlements, or
- Inquiry Papers issued by the Prosecution & Litigation Division and State / Branch Offices
- Expired but renewed compound for payment process; and
- Compounds which have been reduced through the appeal process before.
SSM Playing Their Roles as a Corporate Regulator
The automatic compound reduction offer is subject to Section 38A (1) of the Companies Commission of Malaysia Act 2001. When the court action has been taken, all appeals will not be entertained. SSM is the corporate regulator is responsible for ensuring the high level of compliance with the provisions of the Companies Act. It up to SSM to uphold this responsibility in the Malaysian corporate community. This need exists because good corporate governance can guarantee the continuity of operations and the existence of a company.
SSM is constantly monitoring aspects of compliance that are critical to ensuring the integrity of corporate information stored in SSM. In particular, regarding the updating of information through the filing of the Annual Statements and Financial Statements required by law administered by SSM. The duty of compliance is to ensure that the information held by SSM is the most current information accessible to the public. Especially for the corporate community. This is to assist in the decision making of various business transactions conducted by companies in the country.
SSM encourages citizens of the corporate community in Malaysia to take this opportunity to settle the compound to avoid any court action. After a court action is taken, no appeal will be entertained. Compound payments can be made at any SSM Office counter throughout Malaysia.
Any queries pertaining to the above can be referred to the SSM Call Center at 03-77214000 / 03-22995334. You may visit SSM’s website at www.ssm.com.my for more information.