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On 16 December 2024, the Companies Commission of Malaysia revised the qualifying criteria for the audit exemption of private companies (Sdn Bhd). Prior to the amendment, only dormant/zero-revenue companies, and companies with revenue not exceeding RM100,000 are eligible for audit exemption. Under the new criteria, private companies will qualify for audit exemption if it fulfils at least two (2) of the following criteria:
Do note that the audit exemption revenue threshold relaxation will be implemented over a period of three (3) years on staggered basis (as shown below), starting from RM1,000,000 in 2025, RM2,000,000 in 2026 and RM3,000,000 in 2027. The maximum number of employees will also be increased incrementally from 10 employees to 30 employees in 2027.  Through audit exemption, companies that have elected to be exempted from audit are still required to prepare and submit its Unaudited Financial Statements with the Companies Commission of Malaysia.
We wish to highlight that audit exemption does not apply to the following categories of companies:
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The Malaysian Government is spreading some love to the creative industry as well.
If you are a business owner in the following activities, then you will be eligible to apply:- 1. Visual Arts (e.g. Paintings & Sculptures) 2. Performing Arts (e.g. Theater & Dancing) 3. Music (e.g. Recording Studios & Music Academy) 4. Literature (e.g. Book Publisher) 5. Content Creation (e.g. Cinematic and TV Content) 6. Fashion and Design (e.g. Couture & Fashion Academy) 7. Traditional and Cultural Arts (e.g. Songket & Crafts) Often times, when setting-up a new private limited company (Sdn Bhd) or Limited Liability Partnership (LLP) in Malaysia, information of registered office/ address is required. Some of you will opt to use your business address as the registered office whilst the rest will have them located at the office of the Company Secretary. Have you ever wondered why Registered Office is required though? I mean, other than it being required by law that every company must have a registered office, do you really know why it is required?
Authorized Share Capital is the amount of shares that a company is authorised to issue and it forms no part of the actual Paid-up Share Capital of the company. In layman term, Authorized Share Capital is basically the company's quota for share issuance. Whereas, Paid-up Share Capital is the actual shares of the company issued to its shareholders after consideration for the shares, be it cash or non-cash, have been deposited with the company.
In the final and last part of this post, we'll discuss about the most helpful tool offered by Cradle Fund ie Coach & Grow Programme. Other than coaching the business owners, Coach & Grow Programme also provides grants to the business owners under Cradle Investment Programme (CIP) if the company fulfills the conditions under the respective grants.
So if you have a good product idea or already has a company generating revenue and is looking to achieve sustainable growth and going global, this programme is perfect for you as it is crafted to provide entrepreneurs with the tools and ‘show-how’ to develop and implement strategies and plans during commercialisation and growth stages. It also equip companies that have growth potential to scale and go global. This is the second part to our first blog post. In Part 1, we started with the funding opportunities under Cradle Investment Programme (CIP) whereby grants are given for start-up companies to conduct product commercialization and prototype development. You may find Part 1 of this post here.
In this second part, we'll proceed to the tax incentive provided under Cradle Fund. The tax incentive provided by Cradle Fund is offered via ANGEL TAX INCENTIVE (ATI) programme. For entrepreneurs who are thinking of venturing/ or have just started a business in ICT, Bio-Technology & Life Sciences, Material Sciences and High Growth Technology industries or generation of ideas for an Innovative Knowledge-Based society and economy, this is good news for you as there is an opportunity for you to qualify for funding by Cradle Fund.
Or is there such a thing? As a company secretary, quite often I get asked by business owners what is the type of business entity that suit them best . Is Sdn Bhd (private limited company), or Sole Proprietorship better? Particularly since the introduction of LLP - Limited Liability Partnership, many are saying that it is the best business structure for business owners in Malaysia.
Limited Liability Partnership (LLP) was introduced by Companies Commission of Malaysia last year.
With the introduction of a new business vehicle by Companies Commission of Malaysia, we thought it might be worthwhile to come up with a comparative table that will briefly explain the significant differences between each business entities available in Malaysia. If you are one of those wondering what is the difference between a Sdn Bhd, partnership, LLP and sole proprietorship, we hope the table helps. |
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