COVID-19 & MCO: Corporate Initiatives By SSM
April 15, 2020
On 6.4.2020, the Government introduced an additional stimulus package amounting to RM 10 billion, which focuses on assisting small and medium sized enterprises (SMEs).
Subsequent to this announcement, the Companies Commission of Malaysia (SSM) on 10.4.2020 granted the following concessions:
(a) Moratorium Of Submission Of Statutory Documents
SSM has increased the moratorium period of 2 weeks to 30 days from the date of expiry of the Movement Control Order (MCO) for all companies and limited liability partnerships to lodge statutory documents. These documents include a company’s annual return, financial statements and filings relating to the updates of information in respect of shareholders, directors and officers and business address of a company.
This moratorium period applies automatically and SSM has agreed to waive any late lodgement or filing fee in this regard.
(b) Lodgement Of Financial Statements For Companies With Financial Year Ending 30.9.2019 Until 31.12.2019
Companies with financial year ending from 30.9.2019 until 31.12.2019 may apply for an extension of 90 days from the date the companies were required to lodge their financial statements. This extension is granted to enable companies to have additional time to prepare their directors’ report, financial statements and carry out the auditing process.
The application for this extension of time must be made by e-mail to firstname.lastname@example.org together with the form as set out in Appendix A in SSM’s FAQ. The customary application fee of RM100 typically required for companies applying for an extension of time is waived in this instance.
In addition to the above, SSM has also introduced 5 additional initiatives:
(a) Increased Threshold Of Indebtedness
With the view of assisting companies with limited cashflow to pay its debts, SSM has agreed to temporarily increase the threshold of “indebtedness” from RM10,000 to RM50,000 up to the end of 2020. In addition, companies are granted an extension to comply with the statutory notice of demand issued pursuant to section 466 of the Companies Act 2016 by a creditor to 6 months from the current 21-day period.
These measures are aimed at reducing the likelihood of a winding-up petition being filed by creditors against companies and to assist companies in restructuring and stabilising their financial position and cashflow during the extended period.
(b) Extension Of Time For Annual General Meetings (AGM)
Public companies with their financial year ending 16.9.2019 until 30.11.2019 may apply for an extension of time to hold its AGM for a period of 90 days from the date the AGM must be held.
Applications must be made by email to email@example.com together with the form as set out in Appendix B in SSM’s FAQ. The SSM has waived the application fee for this application.
(c) Exemption From Obtaining Approvals For Companies Limited By Guarantee (CLBGs)
In recent weeks, many companies have responded to the Prime Minister’s call to donate to the “COVID-19 Fund” launched on 11.3.2020 which was established to provide financial aid to those directly affected by the COVID-19 outbreak. To encourage this noble cause, SSM has introduced an exemption for certain CLBGs from obtaining approval from the Minister or Registrar of Companies for solicitation of monetary donation from the public to help those affected by the COVID-19 pandemic. This exemption is applicable until 31.12.2020.
CLBGs which have not been approved by the Inland Revenue Board previously may proceed to solicit for monetary donation from the public but are required to make an official application within 30 days after expiry of the MCO.
SSM has reiterated that donations received by CLBGs must be accurately recorded to ensure proper governance.
(d) Extension Of SSM’s “2020 Compliance Campaign Of The Companies Act 2016”
The “2020 Compliance Campaign of the Companies Act 2016” which commenced on 1.1.2020 and slated to end on 30.4.2020, has now been extended to 30.6.2020.
During this campaign, SSM had, amongst others, provided compound reductions of up to a maximum of 90% from the original value of the compound, subject to applicable terms and conditions which are is designed to encourage companies to comply with the provisions of the Companies Act 1965 and the Companies Act 2016.
(e) Extension Of Compliance Period By Company Secretaries
Lastly, SSM has agreed to extend the compliance period of section 241 of Companies Act 2016 for company secretaries to fulfil their CPE requirements until 31.12.2020, subject to certain terms and conditions as set out in their FAQ.
These initiatives by SSM will undoubtedly assist SMEs and corporations in reducing costs and complying with their statutory obligations during this challenging period.
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