Malaysia Covid-19 Relief Measures under Companies Commission of Malaysia
This guide was published on 14 April 2020 and was later updated on 15 June 2020 and 25 October 2020.
In this first of a series of summaries covering the relevant government bodies, we cover the relief measures under the Companies Commission of Malaysia (SSM). These are applicable to companies and limited liability partnerships registered with the SSM.
Increase of Indebtedness Threshold and Time Extension for Response to Notice of Demand
- Increase of the indebtedness threshold from RM10,000 to RM50,000 until 31 December 2020.
- Extension of time for companies to respond to a notice of demand from 21 days to 6 months.
Under the Companies Act 2016, a company is deemed to be unable to pay its debts and may be subject to a winding up action, if it fails to pay a debt exceeding the prescribed indebtedness threshold, within the prescribed period after being served with a notice of demand at its registered office.
Extension of Time for Public Companies to Hold Annual General Meetings (*Updated on 25 October 2020*)
(*updated on 25 October 2020*)
There is an extension of time for public companies to hold AGMs for an extended period of 90 days. This 90-day period is effective from the date the AGM was supposed to be held.
Companies are required to apply to SSM for such extension by 15 November 2020, with application fee waived.
Extension of Time for Circulation of Financial Statements and Reports (*Updated on 25 October 2020*)
(*updated on 25 October 2020*)
There is an extension of time to companies having financial year ending after 31 August 2019 to 31 March 2020 to circulate its financial statements and reports, for an extended period of 90 days. This 90-day period is effective from the date the financial statements and reports were supposed to be circulated.
Companies are required to apply to SSM for this extension by 15 November 2020, with application fee waived.
Extension of Time for Lodgement of Financial Statements and Reports (*Updated on 25 October 2020*)
(*updated on 25 October 2020*)
There is an extension of time to companies having financial year ending after 31 August 2019 to 31 March 2020 to lodge financial statements and reports with the SSM, for an extended period of 90 days. This 90-day period is effective from the date the financial statements and reports were supposed to be lodged.
If the last day of the period of time that the financial statements and reports were supposed to be lodged with SSM or the approved extended period of time by SSM for the lodgement ends on or before 31 December 2020, the company can lodge its financial statements and reports with the SSM without any late lodgment fee provided it is lodged during the period from 22 October 2020 to 31 December 2020.
Companies are required to apply to SSM for this extension by 15 November 2020, with application fee waived.
90% Compound Reduction For Company Striking-Off Application (*Updated on 25 October 2020*)
(*updated on 25 October 2020*)
From 17 August 2020 to 31 December 2020, the Companies Commission (SSM) offers a 90% compound reduction for company striking-off applications and orders. Both the company and its directors are eligible for the 90% compound reduction rate.
The 90% compound reduction rate applies to all offences under Companies Act 1965 and Companies Act 2016 except the following offences:
- Compounds for out-of-court settlements or inquiry papers offered by the Companies Commission’s Prosecution & Litigation Division as well as its state or branch offices; and
- Compounds that are considered serious corporate governance offences.
A company that is in the process of winding up will not be eligible for the 90% compound reduction rate under this incentive.
A company that was previously given a compound reduction and is currently applying for a striking-off is entitled to the 90% compound reduction rate, provided that the earlier discounted compound remains unpaid and the 90% reduction rate is calculated from the original compound amount, not from the amount of the earlier discounted compound.
If the company fails to settle the 90% reduced compound, the application for striking-off will not be approved, and the amount of the compound will return to its original amount after the expiry date and further enforcement action will be taken.
Compound Exemption for Delayed Business Registration Renewal (*Updated on 15 June 2020*)
(*updated on 15 June 2020*)
Companies Commission (SSM) grants compound exemption on delayed renewal of business registrations that are expiring from 17 March 2020 to 30 June 2020.
Extension of Time for Renewal of Company Secretary’s Licence (*Updated on 15 June 2020*)
(*updated on 15 June 2020*)
Effective from 21 April 2020, extension of time for company secretaries to apply for renewal of company secretary’s licence based on the following categories and conditions:
- Category 1 – Company secretary’s licence has expired and who complies with the 60 CPE points requirement:
- Extension of time until the end period of the MCO.
- Category 2 – Company secretary’s licence has expired or will expire from 1 January 2020 until 31 December 2020, and who does not comply with the 60 CPE points requirement:
- Extension of time until the next renewal of licence to collect the remaining CPE points.
- Application for the renewal of licence will be approved with conditions, where failure to collect the remaining CPE points will result in the subsequent application for the renewal of licence to be rejected.
Lodgement of company secretary licence’s renewal application shall be made once Companies Commission’s counters start operating as usual.
Company secretaries are still qualified to act until the licence is renewed.
Extension of Companies Act Compliance Campaign
Extension of the deadline of the “2020 Compliance Campaign of the Companies Act 2016” to 30 June 2020, during which SSM will provide 90% compound reduction rate from the original compound value to companies, directors and company secretaries, for common offences under Companies Act 1965 and Companies Act 2016 for the following situations:
- where an active company has updated its annual returns and financial statements;
- where a dormant or inactive company has applied for name revocation; and
- where the SSM has given a notice demanding any information required by it for the purposes of the Companies Act, the company secretary has provided written feedback to such notice.
The 90% compound reduction applies to the following common offences under the Companies Act:
- failure to respond to a notice by SSM demanding information required by it for the purposes of the Companies Act
- failure to hold annual general meetings in accordance with the Companies Act
- failure to lodge annual returns with SSM in accordance with the Companies Act
- failure to prepare financial statements in accordance with the Companies Act
- failure to present financial statements at annual general meetings in accordance with the Companies Act
- failure to lodge financial statements with SSM in accordance with the Companies Act
- failure to circulate financial statements to shareholders in accordance with the Companies Act
The 90% compound reduction do not apply to the following:
- any compound for any other breaches of the Companies Act not mentioned above
- any compound under any out-of-court settlements and investigation papers imposed by SSM
- any compound for breaches considered by SSM to be serious breaches of corporate governance
- companies under winding-up process
Exemption from Obtaining Approval for Solicitation of Covid-19 Public Donation by Companies Limited By Guarantee
Exemption for companies limited by guarantee (CLBGs) which have been approved by the Inland Revenue Board (LHDN) from the requirement to obtain approval for solicitation of public donation to help those affected by Covid-19. This exemption is available until 31 December 2020.
CLBGs which have not been approved by LHDN may carry out donation solicitation activities from the public, subject to the following conditions:
- they must make an official application to the LHDN within 30 days after the MCO ends.
- CLBGs that collect donations for the Covid-19 pandemic must keep a record of donations for SSM’s monitoring purposes.
- CLBGs must mention in promotional documents relating to the donation solicitation activities (such as templates, brochures, advertisement) that the CLBG is not “an institution or organization which has obtained approval from the LHDN under subsection 44(6) of the Income Tax Act 1967. SSM has explained that this is to avoid confusion from potential donors or contributors on the issue of tax exemption.
This summary is updated as of the date of writing. The relief measures above are attached with different conditions and some of them require submission of forms and documents. Should you need any clarification or assistance in this respect, please feel free to contact us.
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