Frequently Asked Question
When do I need to prepare management accounts?
You can prepare management accounts either quarterly or annually. Annual management account is mandatory as it has to be audited by a professional auditor after the financial year end. Your management accounts should include a profit and loss statement, balance sheet and cash flow statement. These will give you insight into the overall financial health of your business, as well as allocated budget amounts for each area of expenditure. An analysis of your variances against budgeted amounts will help you to identify areas of overspending and investigate why these have occurred. This information can then.
When do I need to audit my company?
The Companies Act requires every company to audit their financial statements annually. You should engage an auditor as soon as possible after the financial year-end, as you need to circulate the audit report to the board of directors by 6 months after the financial year end, while you need to lodge the financial report to SSM by 7 months after the financial year end.
The requirement to have audited financial statements is a statutory obligation under Section 317 of the Companies Act. It is an offence for a company to publish its annual report without having had its financial statements audited. Directors who are in breach of this provision may be liable to a fine, imprisonment or both.
When do I need to submit the audit report?
You need to circulate the audit report to the board of directors by 6 months after the financial year end and need to lodge the financial report to SSM by 7 months after the financial year end.
Is it mandatory to audit my company?
All companies are required to audit a company in Malaysia unless it is classified as exempted. Company law requires that you keep proper accounting records and submit financial statements to the Registrar of Companies annually. However, an audit can give you greater assurance about the accuracy of your financial statements and can help uncover any potential problems with your business operations.
It is generally advisable to have an annual audit, especially if your company is large or complex. However, the decision ultimately rests with you and your board of directors. If you do decide to go ahead with an audit, be sure to engage a reputable firm that has experience in auditing companies in Malaysia.
What is the penalty if an audit report is not submitted?
Under Malaysia company law, the audit report must be submitted to the Registrar of Companies within 30 days from the date of the annual general meeting. If the report is not submitted within this timeframe, a fine of RM2,000 will be imposed on the company. The directors of the company may also be liable for a fine of up to RM1,000 each.
When do I need to circulate the audited report among the board of directors?
As per the Companies Act 2016 (Section 377), if a company has its Securities Commission of Malaysia (“SC”)-issued recognition, it must circulate its audited financial statements to the board of directors within 6 months after the end of its financial year. The board will then approve the statements before they are signed by a director and presented at the AGM. However, if the company does not have SC recognition, it must provide its audited financial statements to the Registrar of Companies within 1 month after the end of its financial year. There is no requirement for the board to approve these statements before they are submitted.
When do I need to declare a tax return for my company?
Under Malaysian company law, a company is required to submit its annual tax return within 7 month of the end of the financial year. Note that late submissions will attract penalties and interest charges. If you are unsure about your company’s tax obligations or would like assistance in preparing and filing the annual return, it is advisable to seek professional help from an accountant or taxation specialist.
What is the company tax rate in Malaysia?
The company tax rate in Malaysia is 17%. The Inland Revenue Board (IRB) is the Malaysian government agency responsible for the administration of taxes in Malaysia. The IRB’s main objectives are to collect taxes efficiently and fairly, to provide taxpayers with excellent services, and to promote voluntary compliance with the tax laws.
What is the penalty if a company does not declare a tax return?
The penalty for not declaring a tax return can be quite severe, depending on the circumstances. The Inland Revenue Board (IRB) of Malaysia, for example, can charge a company up to 200% of the amount of tax owed if it fails to file a return. Additionally, if directors and officers of a company fail to file a return, they may be subject to civil penalties or even criminal prosecution.