Suruhanjaya Syarikat Malaysia, commonly known as SSM is the main regulating body of businesses and companies in Malaysia. As the chief governing body, SSM formulates and stipulates processes and procedures for smoother and more efficient transactions. The stipulations and regulations are not only for the benefit to register SSM but also for the benefit of business owners and companies as well.
With SSM’s all-encompassing scope, the efficiency and the compliance of businesses are a top priority. In addition, to promote and even encourage all business types, even small to medium businesses, there are instances where companies are granted an audit exemption certificate. To qualify for the audit exemption, here are the business categories and a broad description of each for easier understanding.
Dormant companies – Dormant companies are those that are inactive since the time of incorporation and have remained dormant or inactive through the current and the immediately preceding financial years. In addition, to fully determine a company dormancy, such a company should not have had made any financial transaction for the period of inactivity. Otherwise, they lose eligibility for the audit exemption.
Zero-revenue companies – Zero-revenue companies are considered as such if there is no recorded revenue for the current year and the 2 immediate previous years. In contrast to dormant companies which are inactive, zero-revenue companies operate and have financial transactions but due to various reasons have not made any revenue, thus the term zero-revenue. In addition, to qualify, such companies’ assets should not exceed the set ceiling in their Statement of Financial Position or FS for the current and 2 immediate past years. In view of this, zero-revenue companies are granted audit exemption.
Threshold-qualified companies – Threshold companies are those employing a maximum of 5 employees only, for the current and the two previous years of operation. Also, unlike zero-revenue companies, threshold companies are making a profit through below the stipulated minimum amount. Furthermore, threshold companies should not exceed a prearranged amount of assets in the Statement of Financial Position, again for the current year and the 2 years immediately preceding it. If all requirements fit all the aforementioned descriptions, a company may be eligible for the audit exemption.
For the most part, companies falling under this category may be granted an exemption, as long as the necessary application and attachments are submitted to SSM. To reiterate, the categories above are given broad descriptions, to know more it is best to check the SSM website or the nearest SSM office. For companies and businesses, it is always best to ask and be well informed about updates and developments.
Ignorance of regulations is a no-no in the corporate world. Such negligence may mean earning a non-compliant status, at the least, or in worst-case scenarios, the closure of the business. SSM may be an agency with a very wide scope, but with its exceptional efficiency, it is not for the interest of a company to be complacent on the regulations and compliances. For businesses and companies, it is better to be safe than sorry.