Some of you might have heard of the RM 60,000 tax rebate if you incorporate your company this year.
We've also previously done our calculations and found that if you are earning more than RM 81,000 in annual profits (average of RM 6,750 in monthly profits), after taking into consideration all the additional fees and costs of incorporation, you'll still be saving more money in taxes overall if you register a Sdn Bhd as compared to doing business as an Enterprise (Sole Proprietor or Partnership).
Find out more using our Tax Savings Calculator below.
To find out how much tax savings you can get based on your profits, download our Free Tax Savings Calculator below.
Some of you must be wondering, what are actually all the additional fees and costs involved? Are there a lot of nitty-gritty details to take note of?
Some of these fees are actually tax deductible so overall, you still save on a lot of costs.
This often requires a number of procedures and paperwork, which you can hire a company secretary to help you with. For less than RM 250 a month, we are able to do this for you.
All companies incorporated in Malaysia must have their accounts audited by a Ministry of Finance approved auditor as mandated by the Companies Act 2016.
The fees will usually either be calculated based on the company's total assets, gross turnover, or total operating expenditure of the auditing firm, according to Malaysian Institute of Accountants (MIA)'s recommended practice guide.
These are MIA's recommended charges for auditors:
Although this guide has since been withdrawn to uphold the spirit of the Competition Act (CA) 2010, it has been used to guide many audit firms, including ours, in establishing their auditing fees, though we have to take into account inflation, considering these rates have been around for around 15 years.
For example, if your gross assets or turnover is around RM 300,000, you might need to pay around RM 1,800 – RM 2,000 in audit fees.
When you incorporate your company, it is compulsory for you to hire a company secretary, according to the Companies Act 2016.
Many people might have the misconception that the company secretary only deals with secretarial duties, but actually, the most important duty of your company secretary is to ensure that your company's compliance requirements are met in accordance with the Companies Act 2016, acting as both officer and advisor to your board members.
Your company secretary will also be a representative for legal documents pertaining to your business, ensure that the company’s directors are not operating against the law, provide you with the relevant advice when incorporating or striking off your company, prepare and file all statutory documents, ensure your company's details are all up-to-date, lodge annual reports required by SSM, attend and take minutes at all board meetings, Annual General Meetings (AGMs), Extraordinary General Meetings (EGMs) and more.
And according to the Companies Act 1965, your company secretary must be a:
Usually, company secretary fees can range from RM 80 – RM 150 a month, and are tax-deductible.
If you need company secretary services, our rate starts from RM 80 a month. Do reach out to us to find out more.
Your tax agent (also known as a tax consultant) will not only help you file your company's taxes but also advise you on what your company can do to save more in taxes legally.
It's important to hire a tax agent as wrong filing of taxes can result in heavy penalties, and in-house accountants can sometimes make these mistakes as well. In-house accountants would also require time to develop best practices.
Usually, if you outsource your company's accounting to an accounting firm, they will be able to offer tax consultancy services and take care of your tax filing too.
And the plus point is, accounting firms usually have more knowledge and experience on how best to save costs for you at every single point in time as they manage a number of clients at the same time, so they would already have their latest best practices on cost savings and tax savings that you can utilise.
Tax agent services typically start from RM 1,000 a year.
Tax agent fees and company secretary fees combined are tax-deductible of up to RM 15,000 every year.
An annual return will include the following information:
It is an offence if your company fails to submit this, and if convicted, the company, its directors and the company secretary will face penalties up to RM 50,000 under sections 68 (9) of the Companies Act 2016.
However, you don't need to worry if you've appointed a professional company secretary as they will file these for you. You will need to pay a fee of RM 150 to SSM for this filing, but this is usually calculated in your company secretary's fees.
If you need to close down your business, it's important to close your company officially with SSM (no you can't just leave the company as it is – you might incur more fees!).
If you don't officially close your company, you'll still need to pay company secretary fees, audit fees as well as tax agent fees. You'll still also need to file your annual returns and financial reports every year.
Penalties can be incurred if these are not filed and paid.
You can only close your company if you have had no business activities for two years, and after which, you can request your company secretary to strike off or wind up the company. This can only be done if all your shareholders agree to it, your company is not in debt, nor a holding company, and have met all the other necessary criteria. Hence it might take around 6-12 months to properly close down your company.
A good company secretary will be able to better advise you and handle this well so you don't need to stress over the paperwork.
Bank reconciliation ensures payments have been processed and cash collected by the business has been deposited into the bank. The reconciliation statement helps identify differences between the bank balance and book balance so that necessary adjustments can be made.
If this is not done properly, you might not have full visibility of how much money your business actually has, or you might not even have noticed if some money has gone missing!
Proper bank reconciliation will also help to ensure the accuracy of your tax filing and allow you as a business owner to have the most up-to-date understanding of your company's finances so you can better plan for potential funding and/or expenditure.
Your accountant or bookkeeper will be able to handle this for you as well, so you can focus on your business.
Often, setting up a Sdn Bhd involves a number of additional costs and ongoing processes, but for many Enterprises, as long as you are earning an annual profit of more than RM 81,000, you will overall save more money by converting to Sdn Bhd as compared to remaining as a Sole Proprietor or Partnership.
Not to mention most of these processes will be well-handled by your company secretary and accountant if you hire trustworthy ones, so you can focus on your business and leave all the paperwork and nightmare to the experts.
With 30 years of accounting, tax and financial advisory as well as company secretarial experience, we will be able to handle all of the above for you.
From less than RM 250 a month, incorporating your company as easy as 3 simple and easy steps and we will manage the rest for you:
Once the above is completed, we will incorporate your new Sdn Bhd with SSM immediately. After SSM approves the incorporation, within 3 months, the following will have to happen:
We will be appointed as your company secretary within 30 days of successful incorporation.
You will need to decide on your company's fiscal year-end, which can be any date within 18 months from the date of incorporation and we will advise you accordingly.
The entire Sdn Bhd set-up process can be as fast as 2 days if all goes well. If you currently have an existing Enterprise, reach out to us and we will help you transit your Enterprise to Sdn Bhd.
Leave the tedious work to us, so you can focus on your business.