TO ALL ACCOUNTANTS
SSM ANNOUNCED SEVEN INITIATIVES TO EASE THE BURDEN OF THE CORPORATE SECTOR DURING THE MOVEMENT CONTROL ORDER (MCO)On 10 April 2020, the Companies Commission of Malaysia (SSM) announced seven initiatives to ease the burden of the corporate sector during the MCO. Two of the initiatives were additional measures involving SSM which were included in the PRIHATIN Package for SMEs (Additional Measures) announced on 6 April 2020 as follows:
- SSM will grant a moratorium of 30 days from the end of the Movement Control Order (MCO) to lodge all affected statutory documents with SSM. All transactions under the Companies Act 2016 and Limited Liability Partnership Act 2012 have to be lodged to the Registrar after the end of MCO. During the moratorium period, the late lodgement fee will be exempted.
- SSM will grant an extension of time (EOT) of three months for companies to lodge their financial statements to SSM. SSM will also waive the application fee of RM100 for companies involved in the EOT.
Please refer to Institute’s Circular 38/2020 SSM’s FAQs on Extension of Time for Lodgement of Financial Statements and Moratorium of Submission of Statutory Documents issued on 10 April 2020 for the Frequently Asked Questions (FAQs) issued by SSM with regards to these two measures.SSM then introduced five additional initiatives, which is in line with the Prime Minister’s proposal to ease the burden of the business community as follows:
- SSM will extend the compliance period of Section 241 of Companies Act 2016 for company secretaries to fulfil their CPE requirements, until December 31, 2020, subject to certain terms and conditions. Please refer to the Institute’s Circular 26/2020 Extension of Time For Renewal of Practising Certificate for Secretaries under Section 241 of the Companies Act 2016 and HERE for the FAQs relating to this initiative.
- SSM will increase the value of indebtedness under Section 466 of the Companies Act 2016 from RM10,000 to RM50,000 until December 31, 2020, to reduce the winding up action against companies. Additionally, companies will also be given a period of six months from the current 21 days, to respond to a notice of demand. Please refer HERE for the FAQs relating to this initiative.
- SSM will to extend the deadline of the “2020 Compliance Campaign of the Companies Act 2016” to June 30, 2020, in which SSM will provide a maximum compound reduction rate of 90 per cent from the original value of the compound for common offences under Companies Act 1965 and Companies Act 2016 for situations where an active company has updated its Annual Returns and Financial Statements; a dormant or inactive company has applied for name revocation under Section 550 of Companies Act 2016 or the company secretary has provided written feedback for the notice under Section 7(11)(b) of the Companies Act 1965. Please refer HERE for the FAQs relating to this initiative.
- SSM will introduce an exemption from obtaining approval for solicitation of donation from the public to help those affected by the COVID-19 pandemic, by Companies Limited by Guarantee (CLBG). To expedite this noble cause, SSM will grant exemption to CLBGs which have been approved by the Inland Revenue Board Malaysia (IRB) pursuant to subsection 44(6) of the Income Tax Act 1967 (ITA 1967) from applying for the Minister or Registrar’s approval to conduct activities for solicitation of donation from the public for the purpose of COVID-19 pandemic. This exemption is applicable until December 31, 2020. CLBGs which have not been approved by the IRB can also proceed to conduct the solicitation of donation activities from the public but must make an official application 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. Please refer HERE for the FAQs relating to this initiative.
- SSM will grant EOT for the holding of the Annual General Meeting (AGM) until three months after the MCO ends. However, in order to ensure that there is no abuse of the EOT, companies will be required to apply for the EOT to SSM. The companies involved will be exempted from paying the RM100 fee for EOT. Please refer HERE for the FAQs relating to this initiative.
To further facilitate the implementation of initiatives relating to EOT for AGM and lodgement of financial statements, the SSM had issued the Practice Directive No. 6/2020 on Extension of Time for Annual General Meeting and Lodgement of Financial Statement to provide clarity on special procedure for application for extension of time for lodgement of financial statements and AGM for companies affected by COVID-19 pandemic.
It is hoped that these proposed initiatives will help reduce the burden of the corporate sector to meet their obligations under the laws regulated by SSM.
You may refer to HERE for the press release issued by SSM.
Please be guided accordingly.
MALAYSIAN INSTITUTE OF ACCOUNTANTS
DR. NURMAZILAH DATO’ MAHZAN
Chief Executive Officer