Understanding the exceptions of a startup with respect to statutory compliance helps in building the right expectations from hiring professionals.
Paving your way in entrepreneurship includes learning a broad bunch of skills, from financial planning, brainstorming marketing policies, and human resource management, to dealing with laws and regulations put forth by the government. One can always rely on company secretaries and accountants to deal with such matters yet knowing the regulations and exceptions of building a startup with statutory compliance helps in setting the right expectations when looking for help from professionals.
The Companies Act 1965
The Companies Act 1965 was the pioneer law ascertained to govern starting and running a company in Malaysia. Although the law has been replaced with Companies Act 2016 yet there are various key updates that streamline the statutory compliance a company is required to follow. These regulations are only restricted to companies that are registered after the Companies Act 2016 came into force. These are some examples of compliance a company is no longer obliged to follow:
A common seal is a melted wax impression or an indentation on any official document that holds the document officially executed. According to the Companies Act 2016, 2 signatures authorized persons are required out of which one should be the director for the execution of documents.
If in case, the company has only one director, signatures of the director and one witness are permissible. Henceforth, newly registered companies no longer need a common seal.
Memorandum and Articles of Association (M&A)
In the former years, M&A was established in the constitution to govern a company including responsibilities of directors, allotment of shares, etc. Today, The Companies Act 2016 can be utilized as a constitution per se without any need to ascertain a separate M&A unless the company requires more rules and regulations for smooth functioning.
Annual General Meeting (AGM)
AGMs are organised every year between the directors and shareholders of a company to evaluate the company’s performance as well as plan business strategies for the coming year. However, holding an AGM every year is no longer mandatory for private limited companies in Malaysia. The directors and shareholders of the company are given rights to sign a circular resolution without organising an in-person meeting.
Submission of Tax Payable Estimations
Corporate tax in Malaysia is one of the company tax payable estimations in Malaysia that is needed to be submitted within 3 months of operation for a new company. For companies with capital of less than 2,000,000 Malaysian Ringgit, the estimation of tax payable is not required to be submitted for the first 2 assessment years. In such a case, the company is only required to file the corporate tax within 7 months after the end of the assessment year.
Sales and Service Taxes (SST)
If your company offers taxable goods or services to customers, you might want to know when you can start collecting Sales and Service Taxes (SST) from the customers. Your business needs to register for SST if your annual sale value exceeds 500,000 Malaysian Ringgit in twelve months.
If you are confused about how SST will be applied, don’t worry! We, as the best audit firm in Malaysia, can provide you the most comprehensive taxation advisory services for SST in Malaysia.
Audited Financial Statement
Every year, the company secretary files the annual returns and financial statements of your company to the SSM. However, you are free to put forward an unaudited financial statement if your company belongs to one of these three categories:
It includes the companies that have had no transaction since their inception.
Companies with zero revenue
It incorporates companies with zero revenue for the current as well as past two financial years adding up to a total asset of less than 300,000 Malaysian Ringgit.
It includes companies with less than 100,000 Malaysian Ringgit revenue with total assets adding up to less than 300,000 Malaysian Ringgit along with less than 5 employees for the current and past 2 financial years.
A company secretary Malaysia is best suited for the job. They can offer advice in regard to laws and regulations of running a company. These experts can also get you in touch with a pertinent professional for other required services. For further readings, check out this guide on all you need to know about company secretary Malaysia.
That said, do not let statutory compliance of your company come in the way of growing your business operations. It is best to appoint an experienced company secretary to assist you readily in making well-informed decisions with statutory compliance.