A. QUALIFYING CRITERIA
1. Dormant companies
A company is dormant in a financial year if the company does not carry on business and there is no accounting transaction occurred. A dormant company is qualified for audit exemption if:
- it has been dormant from the time of its incorporation; OR
- it is dormant throughout the current financial year and in the immediate preceding financial year.
2. Zero-Revenue Companies
Zero-revenue companies refers to companies do not have any revenue during the current financial year. Revenue shall include revenue receivable. A Zero-revenue company is qualified for audit exemption if:
- it does not have any revenue in the immediate past two (2) financial years; AND
- its total assets in the current Statement of Financial Position (FS) does not exceed RM300,000 as well as in the FS of the immediate past two (2) financial years.
3. Threshold-Qualified Companies
A company is threshold-qualified if:
- it has revenue not exceeding RM100,000 during the current financial year and in the immediate past two (2) financial years;
- its total assets in the current Statement of Financial Position (FS) does not exceed RM300,000 and in the immediate past two (2) financial years; AND
- it has, at the end of its current financial year and in each of its immediate past two (2) financial years end, not more than five (5) employees.
B. EFFECTIVE DATE
This exemption takes effect as follows:
1. For dormant company –
- where the company is incorporated on or after 31 January 2017, the financial statements with annual periods commencing on or after 31 January 2017;
- where the company is incorporated on or before 30 January 2017, the financial statements with annual periods commencing on or after 1 September 2017.
2. For zero-revenue companies – the financial statements with annual periods commencing on or after 1 January 2018.
3. For threshold-qualified companies – the financial statements with annual periods commencing on or after 1 July 2018.
C. SUBMISSION OF UNAUDITED FINANCIAL STATEMENT
Any company that elects to be exempted from audit must lodge its unaudited financial statements with the Registrar accompanied with the required certificate in compliance with sections 258 and 259 of the Companies Act 2016.
The unaudited financial statements must also be accompanied by a certificate to be signed by a director certifying to the best of his knowledge and belief for the financial year ended 31 xxx 20xx, the company is entitled to exemption from audit under section 267(2) of the Companies Act 2016 relating to private companies and, where the director is not primarily responsible for the financial management of the company, the name of the person responsible should also be stated.
Extracted from Companies Commission of Malaysia PRACTICE DIRECTIVE NO. 3/2017 - QUALIFYING CRITERIA FOR AUDIT EXEMPTION FOR CERTAIN CATEGORIES OF PRIVATE COMPANIES
#LegalSelfHelp
#AtYourOwnRisks
Discuss this article at our Facebook page.