SSM drafting new Companies Act for better protection

The proposal to amend the Act is due to situations such as the prolonged MCO which had restricted and affected economic and business activities

by HARIZAH KAMEL/ pic by MUHD AMIN NAHARUL

THE Companies Commission of Malaysia (SSM) is currently drafting the Companies Amendment Act (2020) to introduce provisions to help companies with various financial problems, not just from the impact of the Covid-19 pandemic.

SSM chairman Datuk Seri Hasnol Zam Zam Ahmad (picture) said the commission is planning to bring the draft to the Dewan Rakyat this year, but it is still subject to the process at the Attorney General’s Chambers (AGC), and the status of other bills that will be presented in the Dewan Rakyat, which will begin at the end of July.

He said the proposal to amend the Act is due to situations such as the prolonged Movement Control Order (MCO) which has restricted and affected economic and business activities. “The provisions of the existing law may not provide effective protection to companies and the industry.

“To prepare the country and also to provide a more lasting and effective protection mechanism, we are proposing some changes to the existing laws,” he said.

Additionally, Hasnol announced seven initiatives to reduce the burden on the business community and corporate sector caused by Covid-19.

“The seven initiatives mentioned are temporary and ad hoc, and only uses the ministerial powers that the Act provides,” he said.

First, SSM will provide a 30-day moratorium on the expiration date of the MCO to file statutory documents with SSM. All statutory documents under the Companies Act 2016 and the Limited Liability Sharing Act 2012 must be submitted to the registrar after the expiry of the MCO. During the moratorium period, late deposit fees are excluded.

Second, SSM will provide an extension of 90 days for companies to distribute and submit their financial statements to SSM.

The RM100 fee will also be exempted for affected companies during the extension period.

Third, SSM has extended the period of compliance with Section 241 of the Companies Act 2016 for continuous professional earning points to company secretaries until Dec 31, subject to certain conditions.

Fourth, SSM has raised the threshold for indebtedness under Section 466 of the Companies Act 2016 from RM10,000 to RM50,000 from April 23 until Dec 31 to reduce the windfall of the company.

The period for responding to a notice of claim by a company is also extended to six months from the date of the claim compared to the current 21 days.

Fifth, SSM also extended the duration of the “Compliance Campaign 2020 of the Companies Act 2016” to June 30, where SSM would provide a maximum compounding rate of 90% of the original value of the compound for common offences under the Companies Act 1965 and the Companies Act 2016.

As for the sixth initiative, SSM has introduced an exemption for approval for “Syarikat Bhd Menurut Jaminan” in collecting donations from the public to help communities affected by the pandemic.

Lastly, SSM will provide an extension of 90 days of AGM compliance for companies holding it.

However, the company still needs to notify SSM to ensure that this extension is not abused. The companies involved will also be exempt from paying the RM100 fee during the extension.

At the same time, SSM has proposed several interim measures which can be beneficial to the corporate sector including compound exemptions due to the delay in renewal of business registration extended from March 17 to Dec 31.

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