Running a business in Malaysia through a Sendirian Berhad (Sdn Bhd) structure offers numerous advantages, including limited liability, credibility, and tax efficiency. However, with these benefits come specific annual filing and reporting requirements that every Sdn Bhd must comply with under the Companies Act 2016.
Failing to meet these obligations can lead to penalties, fines, or even the striking off of the company from the register. This guide outlines the essential annual compliance tasks, reporting timelines, and key responsibilities for registering a Sdn Bhd companies in Malaysia.
What Is an Sdn Bhd Company?
Before diving into the requirements, it’s important to understand what an Sdn Bhd company is. A Sendirian Berhad (Sdn Bhd) is a private limited company registered under the Suruhanjaya Syarikat Malaysia (SSM). It is a separate legal entity, which means it can own assets, incur liabilities, and enter into contracts independently from its shareholders.
This structure is the most common for small and medium-sized enterprises (SMEs) in Malaysia due to its credibility and the protection it offers to its shareholders.
Overview of Annual Compliance Requirements
Once your Sdn Bhd company is incorporated, it must adhere to several annual statutory requirements, which include:
- Annual General Meeting (AGM) (if applicable)
- Annual Return Filing
- Financial Statement Preparation and Audit
- Filing of Financial Statements with SSM
- Tax Filing with LHDN
- Employer-Related Filings (EPF, SOCSO, EIS, etc.)
Let’s go through each of these in more detail.
1. Annual General Meeting (AGM)
For private companies, the requirement to hold an AGM has been removed under the Companies Act 2016. However, if your company constitution requires an AGM or if the company chooses to hold one voluntarily, it must follow the standard procedures.
Public companies, however, are still required to hold an AGM within six months of the financial year-end and not later than 15 months after the previous AGM.
2. Annual Return Filing
All Sdn Bhd companies are required to file an Annual Return with the SSM. This document serves as a summary of the company’s general information such as:
- Registered office address
- Principal business activities
- Directors and shareholders
- Company secretary information
- Share capital and structure
Timeline:
The Annual Return must be filed within 30 days from the anniversary of the company’s incorporation date.
Penalty for Non-Compliance:
Failure to file the Annual Return can lead to fines of up to RM50,000 and/or the company being struck off the register.
3. Financial Statements and Audit
All Sdn Bhd companies, unless exempted, must prepare financial statements annually. These statements must comply with the Malaysian Financial Reporting Standards (MFRS) and be audited by a licensed auditor.
Audit Exemption:
As of recent updates, certain dormant, zero-revenue, or threshold-qualified SMEs may be eligible for audit exemption, provided they meet criteria set by the Companies Commission of Malaysia.
Key Elements in Financial Statements:
- Statement of Profit and Loss
- Balance Sheet
- Cash Flow Statement
- Directors’ Report
- Notes to the Financial Statements
4. Filing of Financial Statements with SSM
After the audited financial statements are prepared, they must be lodged with the SSM using the MBRS (Malaysian Business Reporting System) platform.
Timeline:
This filing must be completed within 30 days from the date the financial statements are approved by the Board of Directors.
Penalty for Late Submission:
Late filing may result in penalties of up to RM50,000, with a daily fine for continuing offenses.
5. Corporate Tax Filing with LHDN
In addition to SSM filings, all Sdn Bhd companies must file tax returns with the Inland Revenue Board (LHDN).
There are two key filings:
a. CP204 – Estimate of Tax Payable
- Must be submitted 30 days before the beginning of the financial year.
- Revisions are allowed in the 6th and 9th months of the basis year.
b. Form C – Income Tax Return
- Must be filed within 7 months after the end of the financial year.
Note: Even if the company made no profit, tax returns must still be submitted.
6. Employer-Related Statutory Contributions
If the company hires employees, it must register and contribute to the following:
- EPF (Employees Provident Fund)
- SOCSO (Social Security Organisation)
- EIS (Employment Insurance Scheme)
- PCB (Potongan Cukai Bulanan or Monthly Tax Deductions)
These payments must be made monthly, with deadlines typically on or before the 15th of the following month.
Responsibilities of Directors and Company Secretary
Under the Companies Act 2016, company directors are legally responsible for ensuring all filings and compliance obligations are met. They must ensure that:
- The company secretary is competent and licensed
- Financial statements are true and fair
- All statutory deadlines are respected
The Company Secretary plays a pivotal role in coordinating filings with the SSM and maintaining statutory registers and company records.
Also Read: How to Apply for Company Incorporation in Malaysia?
Common Pitfalls and How to Avoid Them
- Missing Filing Deadlines:
Use a compliance calendar or engage a corporate service provider to track deadlines. - Improper Record-Keeping:
Maintain accurate financial and statutory records from day one. - Non-Updated Company Information:
Always notify the SSM of changes in directors, shareholders, or company address. - Neglecting Tax Estimates:
Failing to submit CP204 can result in underestimated taxes and penalties.
Conclusion
Compliance is not optional—it’s essential for maintaining the good standing of your business. Understanding and adhering to the annual filing and reporting requirements for Sdn Bhd companies in Malaysia helps you avoid legal complications, build trust with stakeholders, and focus on growing your business.
If managing compliance internally is overwhelming, consider partnering with a professional company secretary or accounting firm. Their expertise can ensure your company stays on the right side of Malaysian corporate law, saving you time, money, and stress in the long run.