Deregistration of a Malaysian company
Since 2003, Healy Consultants Group assists Clients with the deregistration of their Malaysian companies. In this case, our Client, a Malaysian investment holding company, contacted Healy Consultants in 2018 to legally deregister their company after its financial year ended on 31 October 2018.
- In March 2018, we sent the Malaysia company deregistration invoice to our Client. The Client settled the invoice in April 2018.
- We then e-mailed our Client an engagement project plan to legally deregister the company within six months of the completion of the company audit for the financial year-end 31 October 2018. This project plan outlines i) documents required from our Client to complete Malaysian company deregistration ii) a breakdown of weekly and monthly deliverables iii) timeline to complete the engagement and iv) any expected engagement problems and solutions;
- This detailed project plan helps our multinational Clients visualise the engagement over the coming months. Consequently, our Clients can prepare the necessary documents to efficiently and effectively complete the required renewal steps in a timely manner.
- Due to a delay in the completion of the previous year’s audit report, the 2018 audit report was only finalized in June 2020. This consequently incurred late filing penalties with the Companies Commission of Malaysia (SSM), which had to be settled before the Application to Strike Off Company can be submitted.
Engagement challenges and solutions
- Our Client was late in filing their audit report for the financial years 2017 and 2018 with SSM. As a result, they had accumulated multiple penalties on the directors totaling MYR25,000. As usual, Healy Consultants contacted SSM to professionally and aggressively negotiate for a reduction in these penalties for our Client.
- Due to multiple lockdowns in Malaysia during the Covid-19 pandemic, SSM officers were slow to respond to our requests for a discount on the penalties, as they were working from home and had limited access to records.
- Through sheer persistence on the part of Healy Consultants, SSM eventually agreed to reduce the penalties to MYR6,000 in October 2020. This translated into a more than 75% reduction on penalties for our Client.
- After our Client paid the reduced penalties, we were able to prepare the documents for the company shareholders to pass a resolution to enable to Company Secretary apply for the Application to Strike Off Company with SSM.
- In March 2021, Healy Consultants received confirmation from SSM that the Client’s Malaysian company had been successfully dissolved.
Unexpected situation with the Inland Revenue Board of Malaysia
- In October 2021, months after the company was struck off, our Client received a notice from the Inland Revenue Board of Malaysia notifying them of tax penalties relating to previous years, amounting to MYR2,000.
- My team and I assessed the situation as being unfair to our Client, because the company was already been legally struck off. I therefore recommended to our Client that we file a formal objection to the Malaysian tax penalties.
- Our Client agreed with my recommendation, and over the following three months, we aggressively and skillfully negotiated with the Inland Revenue Board of Malaysia the legality of the tax penalties. Through multiple email exchanges and phone call calls with Inland Revenue Board of Malaysia officers, we reiterated the fact that as the company was deregistered, there was no legal basis to serve tax penalties on the company. During the exchanges, we supplied LHDN with documentation from SSM showing the company was gazetted as struck off from the companies register.
- In January 2022, the Inland Revenue Board of Malaysia agreed with the facts presented by Healy Consultants and agreed to waive the tax penalties. We managed to obtain a statement from Inland Revenue Board of Malaysia confirming the company had no outstanding tax amount and they closed our Client’s tax file number from their records. We shared confirmation of this with our Client.
- Our Client is now relieved of the financial burden of tax penalties significantly reduced. So happy is our Client that they have recommended their business partners to Healy Consultants Group.
- We emailed our Client a Summary of Obligations including:
- We had also requested our Client to provide feedback: