When Companies Comply With Companies Act 2016, the More Transparent Businesses Are
Business owners are often plagued with every single thing that is related to the business. This includes looking through all the financial worksheets and keeping everything in check and balance. Often, small or medium-sized companies may not have the capacity to hire professional experts in crucial areas such as marketing, finance or taxation. SMEs often juggle between these areas when the need arises sometimes overlooking deadlines for yearly submission. Nevertheless, big corporations also have missed a cut-off date or two. After all, business owners are set on making money the moment they decide to start doing business. Hence, complying with the Companies Act, 2016 takes a back seat, and they are fined for not fully abiding.
Companies Act 2016 Compliance Campaign
As such, the Companies Commission of Malaysia (SSM) will launch a Company Act 2016 compliance campaign for registered companies in Malaysia beginning 1st January until 30th April 2020. SSM is offering up to 90 per cent of discount to compound of companies in Malaysia in the following conditions:
- Active and registered companies that desire to remain registered must update and lodge Annual Statement and Financial Statement as allocated in the Companies Act 1965 (AS 1965) or Companies Act 2016 (AS 2016);
- Dormant and inactive companies are required to request to strike off company according to Section 550 of Companies Act 2016.
Companies are commonly found to fail at complying several sections of both the Companies Act. The more often companies make the offence, the more these companies will have to fork out to pay for the compound.
Discount Applicable to Specific Sections
However, the 90 per cent discount is only applicable to the following frequent offence according to AS 2016 and AS 1965:
|Section of Offence||Offence Description|
|68 (1) AS 2016||Failure to lodge Annual Returns|
|248 (1) AS 2016||Failure to prepare Financial Statement|
|258 (1) AS 2016||Failure to circulate Financial Statement|
|259 (1) AS 2016||Failure to lodge Financial Statement|
|340 (1) AS 2016||Failure to chair the Annual General Meeting (for public companies)|
|7 (11)(b) AS 1965||Failure to provide feedback on notice by SSM|
|143 (1) AS 1965||Failure to chair the Annual General Meeting|
|165 (4)/(5) AS 1965||Failure to lodge Annual Return|
|169 (1) AS 1965||Failure to present Financial Statement|
These offences are the most common offence that the corporate communities are subjected to. Failure to comply with these sections can have a devastating effect on the company. Companies must submit their statement and returns to SSM for SSM to ensure information integrity in its safekeeping. This mandatory compliance is also to provide information kept within SSM is the latest version and can be accessed by the public as well as interested parties.
An opportunity such as this may come once in a blue moon. Hence, the corporate communities of Malaysia should take up this opportunity to pay up outstanding compounds. Failure to pay up and clear outstanding compound amounts could lead to legal actions taken by the Court. Once companies are subjected to Court, no further appeal will be entertained. Business owners can pay up their compound at any SSM office nationwide. For further queries on this matter, visit the SSM website.