Is it necessary to appoint a Company Secretary?

Pursuant to Section 139A of Companies Act 1965, it is compulsory for every company to maintain a qualified Company Secretary who is also a member of a professional body prescribed by the Ministry of Domestic Trade, Cooperative and Consumerism. The Prescribed Bodies are the bodies that have been prescribed by the Minister through notification published in the gazette under section 139A(a), Companies Act 1965. For the time being the prescribed bodies that have been given such prescribed status are as follow:

• The Malaysian Institute of Chartered Secretaries and Administrators (MAICSA);
• The Malaysian Institute of Accountants (MIA);
• The Malaysian Bar;
• The Malaysian Institute of Certified Public Accountants (MICPA);
• The Sabah Law Association;
• The Advocates’ Association of Sarawak; and
• The Malaysian Association of Company Secretaries (MACS).

What are the role and duties of a company secretary?

Role and Duties The Company Secretary (abbreviation Co-Sec) is an Officer of the company and advisor to the Board.

• He/She should familiarize himself/herself with the provisions of the Memorandum and Articles of Association of the company.
• He/She is expected to be well-versed in the compliance of numerous statutory and regulatory bodies.
• He/She must ensure correct procedures are followed and adhere to it in accordance with the Company’s Memorandum and Articles of Association (M&A) and the Companies Act, 1965.
• He/she must also be able to advise the Board and to ensure that the interest of the board and members are well-protected at all times.

What kind of secretarial services will be chargeable?

Secretarial matters of non-routine nature will be chargeable on a per request basis and all out of pockets expenses such as:

• Increase of paid-up capital
• Change of shareholding
• Change of M&A
• Change of directors
• Opening of additional bank accounts
• Change of registered address

What is secretarial services?

Secretarial services doesn’t comprise of filing and corresponding but also the compliance of statutory and legal issues which form the foundation of any company. Company secretaries perform the function of bridging the gap between the administrative and geographical inadequacies in a formation of the company as every state or a country have their own drafted plethora of rules and regulations. Corporate secretarial service stands as a supporting structure to the company’s compliance needs regardless of nature of the company as the company secretary is adept in handling all types of company.

What is the agenda for the first board meeting?

After the company is incorporated, the directors are to hold the first board meeting to approve the following:

• company registration
• appointment of the directors, secretary and other officers including auditors
• subscription of shares
• registered address
• financial year end
• adopt the common seal & other matters

What are the company secretary’s responsibilities?

The company secretary is usually responsible for establishing and maintaining the company’s records. Monitoring and ensuring compliance with relevant legal requirements, particularly under the Companies Act, is adhered to on a timely basis:

• any changes in the director(s) of a company or particulars relating to director(s)
• changes to a director’s name or residential address
• removal from office in accordance with the Act or constitution
• appointments / resignations / deaths
• annual return
• change of company name
• adoption, alteration and revocation of constitution
• issue of shares
• any other changes that requires updating

Does a Malaysia Branch Office need to appoint a Company Secretary?

You do not need a Company Secretary for a Malaysia Branch Office. However, it is highly recommended to have one as he/she can help you to stay in compliance with statutory regulations.

What corporate secretarial services do we provide?

SMI Corp provides the following services, but not limited to these services, to assist our clients in their business needs:

• Incorporation of private limited company
• Purchase of Shelf Company
• Appointment as Company Secretary
• Corporate Secretarial Services and Statutory Compliance
• Arrangement of opening bank accounts for foreign directors
• Application of Ministry Of Finance (MOF) licence
• Provision of Registered Address and Correspondence Address
• To introduce Agent for Employment Pass
• Deregistration of Company
• Members Voluntary Winding Up.
• To introduce Secretary for Company Formation in Labuan

Are dividends taxable in Malaysia?

Malaysia is under the single-tier tax system. Dividends are exempt in the hands of shareholders.

What is the corporate tax rate in Malaysia?

Small and Medium Enterprises (SMEs) with a paid-up capital of up to RM2.5m at the beginning of the basis period: Chargeable Income YA 2019 The first RM500,000 17% In excess of RM500,000 24% Company with paid-up a capital above RM2.5m at the beginning of the basis period : 24% Non-resident company / branch : 24%

What is the withholding tax rate in Malaysia?

The Income Tax Act, 1967 provides that where a person (referred herein as "payer") is liable to make payment as listed below (other than income of non-resident public entertainers) to a non-resident person (NR payee).

• Contract Payment - 10%
• Interest - 15%
• Royalty - 10%
• Special classes of income: Technical fees, payment for services, rent/payment for use of moveable property - 10%
• Interest (except exampt interest) paid by approved financial institutions - 5%
• Income of non-resident public entertainers - 15%
• Real Estate Investment Trust (REIT), effective from 01/01/2007:
  • Other than a resident company - 10%
  • Non Resident company - 25%
  • Foreign investment institution - 10%
• Family Fund/Takaful Family Fund/Dana Am
  • Individual and other - 8%
  • Non Resident Company - 25%
• Income under Section 4(f) ITA 1967 - 10%

What is Withholding Tax?

Withholding tax is an amount withheld by the party making payment (payer) on income earned by a non-resident (payee) and paid to the Inland Revenue Board of Malaysia. 'Payer' refers to an individual/body other than individual carrying on a business in Malaysia. He is required to withhold tax on payments for services rendered/technical advice/rental or other payments made under any agreement for the use of any moveable property and paid to a -resident payee. 'Payee' refers to a non-resident individual/body other than individual in Malaysia who receives the above payments.

What is Company Constitution Malaysia?

A company constitution malaysia (previously referred to as Article and Memorandum of Association) is a legal document recognised by the Companies Act 2016 . It generally specifies the rules governing the relationship and activities of the corporate, its shareholders and directors.

When to adopt Company Constitution and is it mandatory?

Company Constitution Malaysia is not mandatory. At the point of incorporation, shareholders may choose to adopt a constitution either on or after company registration. It is best to adopt when there are more then one (1) shareholders in the Company.

What is the difference of Company Consititution compared to Shareholders Agreement?

A constitution is a special form of contract as it binds the company, shareholders and directors who initially agreed to adopt a constitution and any future shareholders, unlike shareholders agreement which only binds those who are parties to it.

Why adopting Company Constitution Malaysia?

First of all, a constitution has similar effect as a contract between the company, shareholder, director and company secretary. The provision is to be complied or a decision may be voided. However, it usually does not create enforceable rights between the shareholders, directors and/or company secretary. Usually the Companies Act 2016 will set out some rules governing the relationship between the company, its shareholders and directors. Company constitution may be adopted to exchange the provisions of the Companies Act 2016 that is applicable. If the Companies Act 2016 is silent on method to for decision making, the company constitution can be used to fill in the gap. As an example, the Companies Act 2016 states that issuance of new shares requires ordinary resolution, which can be passed through majority vote. Shareholders may use Company Consitution to override this and state that issuance of new share must be decided with unanimous vote.

What are the 3 common types of business setup in Malaysia?

1. Sole Proprietorship / Partnership
   • Pros
     • Easy and Cheap Registration (<rm100)<> </rm100)<>
     • Lower Tax if taxable income is <rm200k<> </rm200k<>
     • No monthly maintenance fee
   • Cons
     • Unlimited personal liability – (Sole Proprietor)
     • Higher Tax if taxable income is >RM200k
     • No equity financing and limited financing options
2. Private Limited Company (Sdn Bhd)
   • Pros
     • Limited Liability – Shareholders are only liable up to the paid up capital.
     • Separate Legal Entity which can own assets, property, sue or be sued in its own name.
     • Able to apply for Tax Incentives
     • Fixed Tax
     • Perpetual Succession – Company will remain in existence even if the founder(s) depart from Company
     • Allows Equity Financing and More Financing Options
   • Cons
     • Monthly Company Secretary Retainer Fee
     • Reporting Requirement and Strict Statutory Compliance
     • Non-Compliance may lead to penalty and imprisonment
     • Fixed Tax is not worthwhile if revenue is <rm200k<> </rm200k<>
3. Limited Liability Partnership (LLP)
   • Pros
     • Limited Liability – liabilities of LLP borne by its assets.
     • Separate Legal Entity which can own assets, property, sue or be sued in its own name.
     • Flat Tax Rate of 20% on the First RM500k
     • Perpetual Succession – partners departure will not affect the life of LLP.
   • Cons
     • Requires appointment of Compliance Officer who is responsible for compliance with LLP Act.
     • Reporting and Strict Statutory Compliance Requirement
     • Non-Compliance may lead to penalty and imprisonment
     • No Equity Financing

Can I incorporate a company myself?

Yes. New Companies Act 2016 w.e.f 31 January 2017, the process for Company Registration Malaysia can be done online at RM1,060.00 by using only one (1) persons name.

What is the fee for company registration?

The fee charged by Company Commission Malaysia (CCM Malaysia) involved are as follows:

• RM50 – Reservation of Name for 30 days
• RM1,010.00 – Incorporate Fees

What are the information required for company registration?

• Name of proposed Company – get ready with 3 names just in case your first and second choices are taken.

Do I still need a company secretary if I register the company myself?

Yes, a company secretary is still needed for the following reasons:

• CCM Malaysia requires that you must appoint a company secretary within 30 days from the date of incorporation and that the position must not be vacant for more then 30 days. Fees will be imposed for late appointment of company secretary.

Who is SME Advisor Sdn Bhd?

SME Advisor is a registered and licensed company secretary in Malaysia that provides company registration with the SSM, company secretarial services and other corporate services to small businesses in Malaysia.

Is it legal to register my Sdn Bhd online through SME Advisor?

Yes, SME Advisor's company secretaries are licensed and compliant with the requirements set by the SSM. We help businesses to ease the process to register business themselves.

What is the incorporation process via SME Advisor?

Registration through SME Advisor in just simple 3 steps:

1. Complete our simple online questionnaire, or call us directly and one of our team members will walk you through the process.
2. Sit back and relax while one of our filing experts completes the required paperwork quickly and accurately on your behalf.
3. Your application will be submitted to SSM for approval. We provide you with your completed filings and any other necessary documentation. It's that simple, done within 3 working days.

How long does it take to get my business registered via SME Advisor?

Generally, it takes 3 - 5 working days to register your Sdn Bhd, subject to approval by the SSM.

Can I register my business via SME Advisor but appoint my own company secretary?

No. SME Advisor is automatically appointed as your company secretary when you choose to register your business with us.

I am running an existing business. Can I appoint SME Advisor as the company secretary?

Surely yes. Contact us to switch your company secretarial services to us.

Can I register an enterprise, partnership, or LLP via SME Advisor?

No. According to the regulations set by the SSM, registration of business (enterprise and partnership) and LLP require in-person visit to the SSM counter for all first-time registrations of businesses and LLP.