Important notes for Company's Directors
Compliance of Audited Financial Statements Submissions
The old Companies Act 1965 (CA 1965) was replaced by the new Act - Companies Act 2016 (CA 2016) and has came into effect on the 31st January 2017. In essence, the new Act has introduced the decoupling of the audited financial accounts and annual returns.
In gearing towards full compliance, companies must observe the following steps:
Abolition of the requirement for annual general meeting for Private Companies -
Beginning from 31 January 2017, all private companies are no longer required to hold Annual General Meetings (AGM). Instead all decisions of private companies can be fully made through circular resolutions.
For Public Companies -
Prepare and audit the financial statements in accordance to Section 248 of the CA 2016; and to laid before an AGM in accordance to section 340 of the CA 2016. Please take note that, the date of submission will be within eighteen months from the date of its incorporation and subsequently, within six months of its financial year end.
Failing to Comply
For Directors failing to lodge the Audited Financial Statements of the Company on time as mentioned above will be liable under Section 248, subsection (3) where it states:
"Any director of the Company who contravenes this Section commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit or imprisonment for a term not exceeding one year or both."
If you were aware / noticed that your Company has failed to submit the Audited Financial Statements (AFS, i.e. Audited Accounts) on time, please inform us immediately to avoid heavy penalties imposed by the new CA 2016.
Black Listing Directors
Following the implementation of the new Act 2016, those Companies or Directors who were blacklisted previously for both Private and Public Companies will still be liable under the old Act (s. 125) and the outstanding compounds would still need to be settled to the Companies Commission of Malaysia (a.k.a. Suruhanjaya Syarikat Malaysia - SSM).
For compound(s) issued by SSM charged towards the Directors and Company that remained unsettled will reject the appointment of Director(s) during formation of a Company thereof. As a result, the statutory documents cannot be registered, the appointment of directors cannot be effected and Company could not be registered. Hence, the status of the individual would have to be verified prior to lodgement of documents with SSM. Please contact us for any further clarifications needed.