FAQ

These are collected Frequently asked Questions (FAQs) and their answers about AdrianYeo's services. The FAQ pages are categorized into general questions and answers about the audit, tax, accounting and advisory services. 

 

If you don't find an answer to your question in this part of the FAQ, feel free to contact us via chat, contact form or call us right away.

Frequently asked questions

Audit & Assurance

What is statutory audit?


A statutory audit is a legally required review of the accuracy of a company's financial statements and records. The purpose of a statutory audit is to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial transactions. It is a requirement under the Companies Act of Malaysia that every private limited company doing business in Malaysia must appoint an approved company auditor for auditing its accounts and reporting to the members of the company annually.




What is voluntary audit?


A voluntary audit is an audit, which is not compelled or mandated by law. It is an audit that is exercised by choice, hence the very essence of it being voluntary. Even without specific obligation required by the law, many entities have the necessity, or think opportune, to demand a qualified and independent professional judgment on their own financial reporting.




What is internal control?


Internal controls are the mechanisms, rules and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability and prevent fraud. It is is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.




What is due diligence?


Due diligence is an investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material. It refers to the care a reasonable person should take before entering into an agreement or a financial transaction with another party.




What is the key difference between Statutory Auditor and Internal Auditor?


Statutory Auditors are appointed by the shareholders of the concerned company while the Internal Auditors are appointed by the company itself. Statutory Auditors must be a chartered accountant while no such qualifications are prescribed for an Internal Auditor Even though both of them do the same job, objectives specified for them are different. Statutory Auditors work for the shareholders and give their audit reports to them. Internal Auditors submit their audit reports to the company as they work for the sake of the company. Statutory Auditors can be removed only with the consent of the government while Internal Auditors can be removed by the company.




Who can be appointed as an Auditor for a company?


  • A person who has been approved under Section 263 of the Companies Act, 2016 as an approvedcompany auditor; and
  • Whose approval has not been revoked.




Does my business needs an audit?


Every sdn bhd company is required by the Companies Act 1965 to appoint an approved auditor for their companies. Whether active or not, large or small, all companies must have its accounts audited by the auditors every year before the Annual General Meeting (AGM). The shareholders shall then adopt and approve the audited accounts (audited financial statements) during the AGM. All enterprises (sole proprietors) or partnership are NOT required by Business Registration Act to appoint auditors to audit their accounts.




What are statutory audit requirements?


A firm needs to have the following documents before getting a statutory audit started:

  • Details of fixed assets
  • Bank statements with details of transactions therein and the details of cash receipts & payments
  • Information on secured and unsecured loans and advances
  • Trade payables & receivables
  • Local purchases & import purchases
  • Local sales and export sales information
  • Details of inventory
  • Administration and selling expenses
  • Details of foreign exchange earnings & expenditures
  • Statutory dues & other levies




Why voluntary audit?


A voluntary audit is entirely for the benefit of your business and provides an independent assessment of your financial statements, management and controls. If you are a business owner, a voluntary audit is particularly useful if you delegate the running of your business to a management team; if you are considering selling your business; or you are looking for investment. Voluntary audits can also help you to get your financial processes into shape before your business meets the criteria for a statutory audit.




What is the purpose of internal control?


A system of internal control is necessary to help employees and other partners understand the attitude and objectives of the organization as a whole. Internal controls provide reasonable assurance to customers and other parties that transactions are recorded properly and in a timely manner.




Who is responsible for internal control?


Management is responsible for establishing and maintaining the control environment. Auditors play a role in a system of internal controls by performing evaluations and making recommendations for improved controls.




Why due diligence is important?


When you are considering buying a business, conducting due diligence ensures you have access to important information about the business you're buying. It's the best way for you to assess the value of a business and the risks associated with buying it. Through the due diligence process, you thoroughly investigate all aspects of a business for sale. You look at the business's operations, financial performance, legal and tax compliance, customer contracts, intellectual property, assets and other details, often within a time period specified in a letter of intent.





Tax Advisory & Compliances

What is personal income tax?


Personal income tax is defined as the taxes levied on the net income (gross income minus allowable tax reliefs) and capital gains of individuals. Preparing and filing your income tax in Malaysia can be a challenging and anxiety-inducing experience every year for most people. By engaging our professional service, your tax return will be accurate, clear and easy to understand. The Personal Income Tax Rate in Malaysia stands at 28 percent. Personal Income Tax Rate in Malaysia averaged 27.07 percent from 2004 until 2018, reaching an all time high of 28 percent in 2005 and a record low of 25 percent in 2015.




What is corporate income tax?


A corporate tax, also called corporation tax or company tax, is a direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. Corporate tax is charged to the resident company (Sendirian Berhad and Berhad) receiving income in Malaysia and outside Malaysia for company carrying out insurance, sea or air transportion and banking businesses. The Corporate Tax Rate in Malaysia stands at 24 percent. Corporate Tax Rate in Malaysia averaged 26.30 percent from 1997 until 2019, reaching an all time high of 30 percent in 1997 and a record low of 24 percent in 2015.




What is real property gains tax (RPGT)?


Real Property Gains Tax (RPGT) is a form of Capital Gains Tax that is imposed on the disposal of property in Malaysia. It was suspended temporarily in April 2007 to December 2009, and reintroduced in 2010. In 2014, the RPGT was increased for the fifth straight year since 2009. According to the Real Property Gains Tax Act 1976, RPGT is a form of Capital Gains Tax levied by the Inland Revenue (LHDN). It is chargeable upon profit made from the sale of your land or real property, where the resale price is higher than the purchase price. RPGT is generally classified into 3 tiers:

  • Individuals (Citizens & Permanent Residents)
  • Individuals (Non-Citizens/Foreigners)
  • Companies
It was first implemented in 1995 and it has seen quite a few changes over the years. The most recent RPGT amendment to be implemented in 2019, will be the seventh one so far.




What is Corporate tax credit and incentive?


Malaysia has a wide variety of incentives covering the major industry sectors. Tax incentives can be granted through income exemption or by way of allowances. Generally, when income is exempted, any dividends paid out of such exempt income are not taxable in the hands of the shareholders. Where incentives are given by way of allowances, any unutilised allowances generally may be carried forward indefinitely to be utilised against future statutory income. However, with effect from year of assessment 2019, there is a 7 consecutive years of assessment carry forward limit on the unutilised allowances or losses for certain incentives (e.g. Reinvestment Allowance, Pioneer status). Upon expiry of the incentive, any accumulated unutilised allowances or losses can be carried forward for 7 consecutive years of assessment.




What is tax planning?


Corporation tax represents a substantial proportion of a company’s costs. Further to this the increased complexity with constantly changing assurance, regulatory, tax compliance requirements and harsher penalties for non-compliances means a large amount of your time will be taken up meeting these needs and not allowing for the appropriate consideration to ways in which you can minimise your corporate tax exposure which can have the potential to significantly improve your bottom line.




What is tax audit & investigation?


If you are chosen for a tax investigation the financial and personal costs of a protracted case can be significant and we understand what a stressful and worrying time a tax investigation can be for you.




What is withholding tax?


Withholding tax is an amount withheld by the party making payment on income earned by a non-resident individuals or companies and the withheld amount is then remitted to Inland Revenue Board of Malaysia. The tax rate is based on classes of income and is stated either in in Income Tax Act 1967 or in the Double Taxation Agreement (DTA).




What is expatriate tax?


Malaysia adopts a territorial principle of taxation, meaning only incomes which have a source in Malaysia are taxable there, regardless of where the expatriate is paid. It’s important to know that all tax residents and non-residents of Malaysia (this includes every person in the country regardless of nationality) will be taxed on all income earned within Malaysia if they are liable. Foreign income earned is not taxable.




What is Sales and service tax (SST)?


Service tax that is a tax charged and levied on taxable services provided by any taxable person in Malaysia in the course and furtherance of business. Tax is due and payable when payment is received for taxable service provided to customer by the taxable person Sales tax is a single stage tax levied on imported and locally manufactured goods, either at the time of importation or at the time the goods are sold or otherwise disposed of by the manufacturer.




Am I taxable?


An individual is regarded as tax resident, if he/she meets any of the following:

  • earning above RM34,000 per year (after EPF deductions) or RM2,833. 33 per month (after EPF deductions)
  • earning bove RM38,202.25 per year (before EPF deductions) or RM3,183.52 per month (before EPF deductions)
While taking all benefits, allowances, bonuses, overtime and commissions into consideration, he/she is:
  • in Malaysia for at least 182 days in a calendar year
  • in Malaysia for a period of less than 182 days during the year but that period is linked to a period of physical presence of 182 or more consecutive days in the following or preceding year.
Temporarily absences from Malaysia due to the following reasons, it will be counted as part of the consecutive days:
  • business trips
  • health treatment for illness
  • social visits not exceeding 14 days




What Is Employment Income?


Employment income in regarded as derived from Malaysia where the employee: being employed in Malaysia

  • is on paid leave which is attributable to the exercise of an employment in Malaysia
  • performs duties outside Malaysia which are incidental to the exercise of an employment in Malaysia
  • is a director of a company resident in Malaysia; or
  • is employed to work on board an aircraft or ship operated by a person who is resident in Malaysia
However, there are exemptions for for non-resident short-term employee.
  • If the aggregate of the period of periods of employment in Malaysia does not exceed 60 days in a calendar year or
  • where the total period of employment which overlaps 2 calendar years does not exceed 60 days




What Are the Classes of Income that is Tax Chargeable?


Income tax is chargeable on these classes on income:

  • Gains or profits from a business
  • Gains or profits from an employment
  • Dividends, interests or discounts
  • Rents, royalties or premium
  • Pensions, annuities or other periodical payments not falling under any of the foregoing clauses
  • Gains or profits not falling under any of the foregoing clauses




Is my company taxable?


A company is tax resident in Malaysia if its management and control are exercised in Malaysia. Management and control are normally considered to be exercised at the place where the directors' meetings concerning management and control of the company are held. Taxable income comprises all earnings derived from Malaysia, including gains or profits from a trade or business, dividends, interest, rents, royalties, premiums or other earnings. The standard corporate tax rate is 24%, while the rate for resident small and medium-sized companies (i.e. companies incorporated in Malaysia with paid-up capital of MYR 2.5 million or less and that are not part of a group containing a company exceeding this capitalization threshold) is 17% on the first MYR 500,000, with the balance being taxed at the 24% rate.




When is RPGT applicable?


RPGT is not applicable if the disposal price of a property is deemed equal to or lower than the acquisition price. It is only chargeable if there is a profit gain from the disposal of the real property.

  • Individuals (Citizens, PRs, Non-Citizens & Foreigners
    • If any of the above parties sell their property at a profit, they will have to pay RPGT based on their chargeable gain.
  • Companies
    • Usually, the selling of shares by companies are not subject to RPGT except Real Property Companies (RPCs) whose core business is in real property. An RPC company constitutes only if it has real property[1] or RPC shares amounting to no less than 75% of their company’s total tangible assets. However, if the company disposes of its shares or real property to the point where its RPC share percentage falls below 75% and it ceases to be an RPC, then the shares that are disposed of will not retain its RPC characteristic and will be liable for the RPGT provision.
Additionally, if a company reclassifies its real property from fixed asset to current asset (say, trading stocks) then it is also deemed as a disposal of a chargeable asset and is subject to RPGT. The disposal price of such assets will be at their market value at the date of reclassification.




What are the exemptions for RPGT?


There are some exemptions allowed for RPGT:

  • Exemption on gains from the disposal of one private residential property once-in-a-lifetime to individual (please utilise this once in lifetime opportunity wisely).
  • Exemption on gains arising from the disposal of real property between family members (e.g. husband and wife; parents and children; grandparents and grandchildren).
  • 10% of profits OR RM10,000 per transaction (whichever is higher) is not taxable.




What are the typical Allowable Expenses?


Any incidental costs incurred in disposing of the property (as follows) can be deducted from chargeable gain to calculate RPGT:

  • Legal fees, accounting fees, surveyor’s fee, etc.
  • Real estate fees (sales commission)
  • Administrative fees
  • Repair or renovation to maintain or upgrade the property such as interior design such as IKEA furniture to redecorate your house
  • Cost of preserving or defending one’s title to, or to a right over the asset
  • Cost of advertising to make the disposal




What is Allowable Loss?


If there is more than one transaction of real property in the assessment year, any loss incurred from a single transaction can be offset against another transaction, which generates a chargeable gain, as long as both the transactions fall under the same year.




How do I determine the applicable RPGT years?


The Property acquisition and disposal dates are based on the date of signing the Sales & Purchase Agreement (SPA) for both completed and under construction properties. If you inherited a property from a relative or friend who has passed away, when selling it off (you will be known as the executor), as per the RPGT Act for deceased’s estates: Date of death of the deceased = Acquisition Date by the executor The executor oversees the selling or disposing the estate before distributing it to the beneficiaries. The RPGT charged on the deceased’s estate is based on this acquisition date by the executor.




When do I have to pay RPGT?


For locals and permanent residents who sell off a property, their lawyers will retain 3% of the property’s selling price/disposal price when the purchaser pays the first deposit to buy the property for the purpose for RPGT payment. For non-citizens & foreigners, this retention rate is 7%. Your solicitor will make the payment with necessary forms to Inland Revenue Board within sixty (60) days from the date of the sale and purchase agreement to meet the RPGT payable.




I have received a tax investigation letter from IRB, what should I do first?


Read the letter carefully and seek professional advice if you are unsure or if it is a complicated request for information. Our tax team have significant experience supporting individuals and businesses at this stage, so at this point you may wish to contact us for a no obligation, confidential consultation to discuss your next actions.




Why am I under tax investigation? What triggers a tax investigation?


IRB will not specifically say what triggers a tax investigation, however:

  • Sometimes it is obvious, like an omission picked up by IRB.
  • Sometimes it is random.
  • You may be in a IRB target area – IRB set up taskforces to target areas that are thought to be at high-risk of tax fraud. These maybe geographic and/or specific sectors, with property income being perhaps the most common.
  • Have you done something to attract the attention of IRB? This may be that your income is dramatically up and down or that returns are always late, or that you are claiming excessively high expenses in proportion with your income – all these things can make you high risk in the eyes of IRB.




How long will a tax investigation take?


Some tax investigations finish with one letter, other investigations can go on for months with IRB asking for more and more information.




Can I appeal against my tax investigation?


No, unfortunately you cannot appeal against an investigation being opened.




What information will I need to provide during my tax investigation?


The information IRB will ask you to provide will depend on what they are checking. You’ll normally receive a letter telling you exactly what’s needed. You should be prepared to provide the information that your tax return was based on quickly and easily.




What powers do IRB have in a tax investigation?


IRB have extensive powers to request and obtain information from the taxpayer and from third parties. They can issue determinations if there is no co-operation but this is always a last resort.




What is voluntary disclosure?


Voluntary disclosure takes place when a taxpayer discovers their own error or omission and reports it to IRB.




What am I liable for in a tax investigation?


You are liable for any tax found to be due with related interest and penalties.




What penalties are involved in tax investigations?


Penalties are now very much codified and difficult to avoid. The penalties are calculated on a published scale which takes into account the behaviour of the taxpayer. The penalty is therefore significantly higher if the failure to disclose is deliberate, and even higher if there is an attempt to conceal the lack of disclosure. Typically a penalty can add another 15%-300%. An inadvertent mistake is likely to suffer a lighter penalty.




How can an accountant help with my tax investigation?


Accountants are able to help as follows:

  • Collating information and ensuring the correct information is provided to IRB.
  • Dealing with further requests for information.
  • Ensuring that IRB do not extend an enquiry unnecessarily.
  • Helping to negotiate a final settlement including interest and penalties.
  • Helping to negotiate time to pay.




Isn’t tax planning for rich people?


While the wealthy do need tax planning, a good estate plan can offer tax planning advantages to everyone. Wealthy individuals may need to be concerned about estate taxes, but your beneficiaries will most likely have to address income and real property gains taxes. A properly designed and executed estate plan can both reduce those taxes and defer them to a later date. This serves to pass on more of your property to your loved ones rather than the government.




What are tax credits?


Tax credits are economic development subsidies that reduce a company's taxes by allowing it to deduct all or part of certain expenses from its income tax bill on a dollar for dollar basis. Tax credits are usually granted for a particular kind of corporate activity a country wants to promote. Investment tax credits, which allow companies to subtract from their tax bill amounts spent on new facilities and/or equipment, are a boon for capital-intensive manufacturing industries. Research and development (R&D) credits are especially lucrative for pharmaceutical and high-tech companies.




What is withholding tax?


Withholding tax is an amount withheld by the party making payment (payer) on income earned by a non-resident (payee) and paid to the Inland Revenue Board of Malaysia. 'Payer' refers to an individual/body other than individual carrying on a business in Malaysia. He is required to withhold tax on payments for services rendered/technical advice/rental or other payments made under any agreement for the use of any moveable property and paid to a -resident payee. 'Payee' refers to a non-resident individual/body other than individual in Malaysia who receives the above payments.




What is the late payment penalty for withholding tax?


  • When you fail to pay the withholding tax within the due date, the IRBM will impose an increase in the tax rate by 10% of the original withholding tax amount payable.
  • If you fail to pay the withholding tax or the increase in the withholding tax, you will not receive any deduction for the payment made to the non-resident payee against business income in the income tax computation.
  • A civil suit can be filed to recover the withholding tax or the increased withholding tax that is not paid to the government.




What is Malaysian Tax Rate for Expatriate & Non-Residents?


The current tax structures for expatriates and non-residents are as follows:

  • If your stay in Malaysia is less than 60 days, then any income, fee, commissions or bonus received will not be taxed
  • If during your period of employment, your stay is not more than 182 days in a year, then you are a non-resident. As a non-resident, you will be taxed at a flat rate of 25% and you will not enjoy any tax incentives. UPDATE: The Malaysian Inland Revenue Board, (or known locally as Lembaga Hasil Dalam Negeri or LHDN for short) had increased the tax to 28% with effect from Year Assessment 2016
  • If your stay is more than 182 days in a year, then you are a RESIDENT. A resident will be taxed at a graduated rate of 0% to 25% depending on your income. You will also enjoy the tax incentives that includes personal and family rebates, allowances, etc. that will reduce your net taxable income considerably
  • If you work on board a Malaysian ship, your income is not taxable




What if I Have to Travel OUT of Malaysia within this 182-day period?


If you have to be physically away from Malaysia for the following reasons:

  • To attend meetings, seminars, exhibitions or conferences which are all related to your job
  • To seek medical treatment related to your health or your immediate family member
  • Social visit but not exceeding 14 days
then this brief absence shall be considered as part of your required 182-day.




What is Certificate of Residence (COR)?


A Certificate of Residence (COR) is issued by LHDN to confirm your residence status for Malaysian tax purposes. With this COR, you can claim tax benefits under the Double Taxation Agreement that Malaysia has with several countries, and to avoid being tax twice on the same income.




How Do I Calculate My Tax if I Worked for only 1.5 years?


Income received during your first 182 days will be taxed based on a non-resident flat rate of 25%. From 183rd day onward, the tax rate will vary. It will be based on the tax table as provided below. Since your contract is more than a year, you will be filing your tax return twice, e.g. the assessment year 2014 and 2015. Your assessment year 2015 will be calculated based on the resident tax rate and the non-resident flat rate of 25% will no longer be applicable.




Can I Get Any Tax Relief for My Family?


If you have family staying with you in Malaysia and you are considered a resident, i.e. stayed more than 182 days in a year, then you will be entitled to several tax exemptions.




Can I Get Tax Rebates at the End of My Contract?


Unfortunately, there are no special tax rebates at the end of your contract period. Any tax incentives and rebates are already provided for (follow the link provided above to see these rebates) and are the same as when you do your yearly tax return. Before leaving Malaysia at the end of your contract, don't forget to get your tax clearance from Income-Tax Office, LHDN.




Will I be Subject to Withholding Tax?


Non-residents will be subject to withholding tax only on the following types of income derived in Malaysia.

  • Use of movable property
  • Technical services, assistance or advice
  • Fees charged for installation of machinery, plant & other similar assets
  • Personal services for use of intangible property
  • Royalties on the use of intangible property
  • Interest




Will I be Subject to Capital Gains Tax?


The answer is no. However, if you bought and sold real property in Malaysia, any gains received from this disposal is subject to real property gains tax or RPGT. Any disposal made within the first three years is subject to 30% RPGT. For sales made in the third, fourth and fifth year will be charged at 30%, 20%, and 15% rate respectively. No RPGT for any disposals made after the fifth year. An Update on the Purchase of Malaysian Properties by Foreigners: The minimum price of RM500,000 is now increased to RM1m.




What is Service Tax?


  • Service tax that is a tax charged and levied on taxable services provided by any taxable person in Malaysia in the course and furtherance of business.
  • Taxable person is any person who belongs in Malaysia and is prescribed to be a taxable person.
  • Taxable service is any service which prescribed to be a taxable service.




When is Service Tax due and payable?


Tax is due and payable when payment is received for taxable service provided to customer by the taxable person




What is Sales Tax?


Sales tax is a single-stage tax charged and levied:

  • on taxable goods manufactured in Malaysia by a taxable person and sold by him (including used or disposed off) ; and
  • on taxable goods imported into Malaysia.




Who is the taxable person?


Taxable person is a person who manufactures taxable goods and is liable to be registered if the annual turnover has exceeded RM500,000.00 threshold. Such person is required to be registered under MySST system.




What is the rate of tax for sales tax?


The proposed sales tax rate is at 5%,10% or on a specific rate.




What are the responsibilities of taxable person?


Taxable person is required to be registered, issue invoice and charge sales tax on the sales, maintaining a proper records and account for the tax by submitting bi­ monthly returns to RMCD.





Advisory Services

What is Business Valuation?


Business Valuation is a complex process requiring broad knowledge of accounting, finance, economics, taxation, and financial analysis. It requires a significant amount of informed professional judgment and careful consideration of the unique facts and circumstances of each business. It's a process similar to an appraisal for a home sale, in which a business appraiser inspects and analyzes the entire business. This process usually includes valuation of assets (including depreciation) and other factors. Businesses can be valued in several ways, depending on the circumstances of the valuation (sale or bankruptcy, for example). If a business is being offered for sale, more than one valuation method may be presented, s part of the business valuation report. Sections of a business valuation report, including an economic analysis, industry analysis, and discussion of valuation methods used.




What is a Business Plan


As a business, operating in a tough market, funding and cash flow remain the greatest challenges that will be encountered. Obtaining the capital and funding that is required are often the greatest hurdles any business faces from time to time. A credible business plan remains as the key to unlocking the doors of financing your business whether it be a startup enterprise or a going concern that is looking to expand its operations.




What is financial application assistance?


A business loan is specifically intended to set up a business or expand an existing one. As with all loans, a business loan also involves a debt creation, which is repaid with interest. Many Malaysian banks provide competitive business loans to help entrepreneurs grow their business and optimise their profitability. Financing options are not just restricted to business loans from banks. We can also assist in arranging for financing from equity crowd funding, p2p financing, venture capital and other forms for financing for your business growth.




Why do I need an up-to-date business valuation?


Things happen, in business as in life. Just as you should always have a resume ready, and you should keep your business plan updated, you should prepare a business valuation and update it every year. Here are some reasons why you might need that business valuation report.




Who to ask to value your business?


An appraiser is an individual who estimates the value or worth of something. An appraiser sets a value on a property or other assets, including the assets of a business. There are many different kinds of appraisers, many of whom specialize in various types of appraisals. This article discusses how to find and use a business appraiser.




Why I need a business plan?


Many of us have the ideas to start a business but lack the startup funds! Now, we need to convince an investor to invest in our business or attempt to get a loan from a financial institution. In order to get financial aid, you need to approach investors or banks to assist you. An investor will need to be informed on the ins and outs of your idea and for that reason it is necessary to present a business plan. A business plan is just like a CV that you would send to a prospective employer. This is a document that you can submit to a potential investor that will provide them with both your proposal and a summary of the business itself.




What are in a business plan?


A business plan shall includes:

  • Business background, owner profiles
  • Products and services
  • SWOT analysis (strengths, weaknesses, opportunities, threats)
  • The business environment (industry, competitors
  • Corporate strategy – what is the purpose and differentiating factors?
  • Marketing strategy – how will you attract customers/clients?
  • Action plan – what needs to be done?
  • Financial plan
  • Key assumptions
  • Pricing
  • Forecast financial statements (Profit & Loss, Balance Sheet, Cashflow Statement)




What is the difference between striking off and winding up?


Companies can be liquidated either by “Striking Off” or “Winding Up“. Winding up and striking off both result in a company ceasing to exist. However, they are very different processes and should not be confused with each other.

A private company that is not trading and meets certain other conditions may apply to the Company Registrar to be struck off the register. In general, striking off is an easier, faster and less costly procedure, however it is only suitable for small or dormant companies that are able to meet the specific requirements. A company may not be struck off if it is the subject, or proposed subject, of insolvency proceedings or a compromise or arrangement with its members or creditors.

Winding up is a more formal company liquidation procedure that involves the orderly winding-up of the company affairs, the appointment of a liquidator to manage the process of realizing the company assets, ceasing or sale of its operations, payment of its debts (if any) and distribution of surplus assets (if any) among its members.




What are the requirements for striking off?


  • The company has not commenced business since incorporation and is not carrying on any business.
  • The company does not intend to begin business or carry on any business.
  • The company does not have any assets or outstanding liabilities. There should be no entries at the registrar of charges.
  • The company has no outstanding penalties incurred under the Companies Act of 1965.
  • The company does not owe any tax liabilities. The company should also be free of debt of any Malaysian government department or agency.
  • The company is yet to make any dividends to the shareholders.
  • The information of the company as lodged with the registrar of companies is up to date.
  • The company is not involved in any legal proceedings in or out of Malaysia
  • The company should not be a holding company or subsidiary of another company
  • The company does not identify as a guarantor corporation.




Why companies opt for voluntary winding up?


  • It allows for fair distribution of the company’s assets among the shareholders. This is unlike the past where the creditor rushed to liquidate as many assets as possible without considering the liabilities of the company to its employees.
  • It removes a loss making business from the industry. This is good as it eliminates the possibility of the company continuing to operate and incurring more debts.
  • It allows for proper investigation as to the cause of the problem. It identifies any wrong doing and holds those responsible to account.




What is compulsory winding up?


This is where the company is forced to wind up as it cannot settle its debts. This is a process forced through the courts. The law allows any creditor owed a debt of more than MYR 500 to send a demand note that should be payable within 21 days. If the demand note is not settled within this period, the creditor can invoke ‘Section 218 Notice’ simply known as ‘Section 218’ which comes from Section 218 of the Companies Act 1965. The creditor can then move to the court to have the company declared insolvent and forced to wind up.




What are the features and benefits of business loans?


The common features and benefits of business loans:

  • The loans have very simple documentation requirements.
  • The loans can be repaid in affordable monthly instalments.
  • The loans offer competitive interest rates.
  • The business loans have higher finance margins.




What are the documents required to apply for business loans?


For Partnership and sole proprietorship

  • Form D (Register of Business)
  • Last three years management account submitted to Income Tax
  • Last six months bank statements
  • Latest debtors and creditors ageing
  • A copy of NRIC of owners
  • Company profile, product catalogue, certification
  • A copy of Bank Offer Letter from other banks
  • The land title of the property which will be pledged to the bank
For SDN BHD (public company)
  • Form 24, Form 49 and the latest annual return
  • Last three years audited accounts and latest management accounts
  • Last six months banks statements.
  • Latest debtors and creditors ageing (if any)
  • ICs of directors of director
  • Company profile, product catalogue, certification and other relevant information
  • A copy of Bank Offer Letter from other banks
  • A copy of Land Title of the property which will be pledged to the bank




How does a Term Loan help businesses?


A Term Loan is a fixed amount of loan that is granted for an agreed time period and is repaid in fixed instalments. With fixed repayments, businesses can better manage the cash flow effectively.




What is the general eligibility criteria for a business loan?


The eligibility criteria to get a business loan in Malaysia:

  • Malaysian-owned business entities.
  • There should be no adverse credit history of the applicant.
  • For sole proprietorship or partnership, the age limit should be between 25 and 65 (upon full repayment).




What is the maximum limit of shareholders' funds in FSMI2?


All SMEs with shareholders' funds not exceeding RM10 million are eligible for FSMI2.




What are the different facility types available in business loan?


A business loan has the following facility types:

  • Overdraft
  • Term Loan
  • Trade Lines





Business Process Solutions

Do you provide accounting services?


This is a core service for us and our management team has an average of 12 years of experiences in preparing annual accounts! We constantly keep abreast of technology and regulatory changes to make the preparation of your annual accounts as quick and as painless as possible for you. We prepare accounts on a timely basis for

  • Limited Companies
  • Limited Liability Partnerships
  • Partnerships




What are Management accounts?


An up to date, relevant and quickly produced management information allows you to make the right decisions. Management accounts are a set of financial and statistical data which can be used by business owners and key management to make timely and meaningful day-to-day decisions. They can be produced at whatever frequency is required, but tend to be on a monthly or quarterly basis and their purpose is to give you an insight into the financial health of your business. We can provide a management accounting service that can assist in the preparation of periodic management accounts, budgets and cashflow forecasts to enable you to meet your business objectives. Our management accounting service can flow from our bookkeeping services or we can interface with your accounting operations to provide monthly or quarterly support.




Why does a business need accounts?


Most businesses are required to produce a set of accounts at least once per year. These accounts will form the basis for the tax return which tells IRB how much tax is owed. Aside from accounts being a requirement, as a business you can benefit greatly from carefully considering the information within your set of accounts. Accounts can tell you how your business performs and may highlight areas that need to be addressed. There is a vast amount of information contained within a set of accounts that can be utilised to improve your business. Accounts can be produced as frequently as you need them. So, if you require frequent up to date information about the performance of your business then monthly management accounts will possibly be best suited for you. However, if your business is very small and you have a rough idea of how well you are doing then you may only want the statutory annual accounts.




What’s involved with compiling your accounts?


Your accounts are a report based on the bookkeeping of your business, whether you have completed the bookkeeping yourself or we have completed the bookkeeping on your behalf. Before we start work on your accounts, we will thoroughly check the bookkeeping to ensure that there are no mistakes or omissions. From your bookkeeping records we will make all the necessary calculations required to turn the bookkeeping figures into a full set of accounts. Your accounts will then be passed over to another Senior Accountant for them to double check all work, and produce a series of recommendations for you if any have been found. Your accounts will be produced using our standardised professional template and will be presented to you in either paper format or as a PDF for you to review them. You will then be given the opportunity ask us any questions you may have about the figures given and anything else you are unsure of. Once you are happy with the accounts, and any amendments have been made, the tax return is produced and submitted to IRB.




What is include in the management accounts?


In short, only include what your board or management team need to see to allow for intelligent and educated choices.




What is the purpose of management accounts?


The primary goal of managerial accounting is to provide information for internal decision making, with an emphasis on planning and control purposes. Decisions made by managers rely substantially on accounting information.




What are the benefits I’ll receive on outsourcing to AdrianYeo?


Top benefits you’ll receive on outsourcing to us

  • Faster turnaround times - we work efficiently and effectively on customer's matters
  • Access to qualified staff - we are a team of 100 accounting professionals whom are available to assist you
  • Efficient support system - we believe in "Your success is our success!", hence we aim to provide greater support to our clients
  • Greater profitability - we will handle all your accounting matters, so that you will have more time in your core business that is more profitable for your business




What is your bookkeeping's scope of work?


  • Accounts tagged and produced from incomplete records
  • Accounting forms
  • Draft accounts for review
  • Final accounts for signature
  • Full set of accounts and tax computation
  • Accounts ready for a partner-level review




What should I provide for bookkeeping service?


  • A completed accounting checklist
  • Copy of last year or current year’s working papers, if any
  • Copy of last year’s working papers, if any
  • Accounts and bookkeeping software backup, if any
  • Your instructions and assumptions regarding the job




What reports you provide us?


  • Weekly or monthly job progress reports
  • Financial reports and analysis
  • General ledger
  • Trial balance
  • P & L account
  • Balance sheet
  • Cash flow statement
  • Excel working papers with indices, hyperlinks, lead schedules and control accounts




What is virtual CFO?


A Virtual CFO, has all the skills of a full time CFO with one key difference: he/she is a financial expert that could provides you the right amount of guidance at an affordable cost whom is not a full time employee of your company. You are effectively “renting” their expertise. You can continue to deploy your capital to sales activities that grow the top line and have an financial expert work with you to validate your thinking and help you execute your strategy. The Virtual CFO should already have expertise in your industry and be able to relate his or her experiences to your situation. He/She should be able to get into the details of the business… prepare financial models, supervise accounting staff and augment your management team, that make he/she can be on-boarded quickly and deliver immediate value.




What is interim CFO?


Many a times, companies require someone to immediately take over the responsibilities as their CFO. This could happen when the incumbent CFO suddenly quits or may fall sick for a long period of time. In such a scenario, you could either put in all your efforts in searching for a candidate, and lose precious time and money until the new recruit starts working for your company or you could bring in an experienced CFO from our team, as your Interim CFO. This will help the company tide over the gap formed by the departing CFO and the incoming CFO.




What is project CFO?


There may be times when your company is handling multiple projects at the same time. This can put immense pressure on your existing CFO, who may find it increasingly difficult to do justice to all the projects. Instead of spreading your CFO too thin, get him/her some help from us. Our CFO steps in for a limited period, till the project ends. Our CFO works in tandem with your existing senior management team and your full time CFO to expedite and execute these multiple projects with great efficiency.




What is secondment arrangement?


A secondment arrangement involves an employee being temporarily assigned to another part of their own organisation, a different employer within the same group or, in some cases, a different employer altogether (such as a client or business partner).




What is the benefit of staff secondment?


The benefits to your business of utilising our accounts staff secondment include:

  • Access to quality accounting staff
  • Availability of specific expertise that you require
  • Augment your in-house team's skills
  • Flexibility & continuity of quality support
  • Integrated multi-disciplined service delivery
  • Right resource at the right time at the right place




What is payroll outsourcing?


Businesses may hire an external firm to handle all payroll functions to save time and money, reducing the need for in-house trained payroll staff, purchasing and maintaining appropriate software packages, and staying compliant with updated PAYE legislation. Whether payroll outsourcing is cost-effective depends on the complexity of the organisation’s payroll requirements. The service level of payroll outsourcing varies – some suppliers provide a barebones service and others will also deal with everything involved, such as liaising with IRB and maintaining full compliance without the main organisation ever having to deal with payroll.




How does payroll outsourcing works?


A payroll outsourcing company will process your payroll by gathering your employees’ information (hire date, job title, pay rate), obtaining any timecard data, calculating the pay that’s due to each employee, and then depositing that pay into their bank account, or issuing a payroll check. These are the steps that they typically follow to do so:

  • Set up their payroll software with your company and employee data, including your payroll account and employee’s accounts for direct deposit
  • Request or obtain time card data each pay period to input into their payroll software
  • Add new employee information and provide state required new-hire reporting
  • Confirm hours worked each pay period as paid or unpaid and calculate gross pay
  • Run your payroll, processing pre-tax deductions (like benefits and taxes) as well as post-tax deductions (like garnishments for child support)
  • Make deposits to employees’ accounts (direct deposit, pay card) and/or mail or deliver paychecks and advices to your office or to employees’ homes
  • Make payments to vendors, such as insurance companies, on your behalf
  • Pay all payroll taxes and insurance when due, such as quarterly state and federal taxes
  • Provide reports to the business




What are the benefits of payroll outsourcing?


So why outsource payroll? There are many benefits of outsourcing payroll to software. Check out the benefits below to see why you should consider payroll outsourcing. You increase your time When you don’t have to do calculations by hand, manage payroll taxes, and constantly research the newest payroll numbers and news, you’ll free up some time. You can use the time you would normally use on payroll to build and grow your business. You save money It might seem cheaper to do payroll by hand, but it’s typically not. It’s easy to make mistakes when you do manual payroll. Payroll mistakes are costly. You can be hit by expensive penalties. When you use payroll software, the program does accurate calculations, files and deposits your taxes, and updates with the latest payroll rates. This helps you avoid any costly errors. You use payroll experts You might lack payroll expertise. You don’t have to worry about your inexperience when you use payroll software. The software company has payroll experts who work on the software’s development. They ensure that the software is accurate and meets your needs. You stay up to date Payroll rates and laws are constantly changing. It can be difficult to keep track of what is correct. Before you know it, you’re using the wrong tax rates. The payroll software company will do regular updates, so you never have to worry about running payroll incorrectly. You remain secure Payroll involves a lot of sensitive information, including pay rates and Social Security numbers. You must keep all this information safe. Payroll software stores your data on secure servers. This means you don’t have to worry about viruses or hackers. And because your payroll is behind a locked account, employees can’t easily walk off with information.




Top 4 reasons why you need to outsource your finance function.


  1. You don't have the numbers. This is the first and most obvious red flag. If you don't have the critical numbers you need to make important decisions about driving company growth, it's time to turn your nonexistent financial department over to a professional. It's tough when your financial situation is a big question mark, but spending the money on an analyst is the first step to getting your cash flow situation under control.
  2. You can't hire a team of accountants, but you need the capacity of one. Outsourcing a team is all about flexibility. Once you determine your budget, you can have the team work within it to give you an accurate picture of your financial situation. As things improve and you expand, you can increase the time allotted until you can afford to hire a full-time team if necessary.
  3. You have the numbers, but you need a translator. First, give yourself a gold star for keeping track of your accounts. The next step is to interpret the information you've gathered, and if you're unsure of how to do this, it's a good idea to call in an expert. Whether sales are up or down, an analyst will be able to read into the numbers to ensure your business is pointed in the right direction.
  4. You're spending an excessive amount of time on accounting details. It's tempting to save your business money by crunching the numbers yourself, but a trained professional will do the same work more accurately and efficiently, gaining greater insights as a result. Meanwhile, this frees up your time for coming up with ways to market your brand or design your next product line.
Read more here.




What is accoutns payable outsourcing?


Accounts Payable (AP) outsourcing is the act of hiring a 3rd party to handle an organization’s AP processes. Typically seen as a way to save time, money, and effort; the 3rd party would already have the proper people and processes in place and see economies of scale as they are specialized in AP functions.




What are the pros of oursourcing your accounts payable?


The benefit of outsourcing include: Cut Costs: Hiring your own in-house accounts payable staff, as well as all the equipment and programs that are necessary for the process, can be very costly. Outsourcing, on the other hand, means you can have experienced, equipped professionals do the same job at a lower cost. Plus, the outsourcing firm is responsible for keeping up with the increased workload as your company grows. Efficiency: Accounts payable service providers have access to automated processes and a wealth of experiences. Plus, your invoice copies and statements will be processed quickly because that’s the business’ core service to you. This means outsourcing can get your work done more quickly and accurately than a small in-house staff could. Constant Coverage: With an in-house AP staff, a supervisor would be responsible for managing scheduling and handling issues if employees are out. An outsourcing firm cross-trains multiple employees on accounts and maintains common standards. That means you never have you worry about being left uncovered. Automated Tracking: Even though outsourcers do the work off-site, modern technology lets you track each step of the AP process instantly. You’ll have constant real-time access to your accounts payable information. With this sort of access, you’ll never be left in the dark about your AP processing. Minimization of Error: Human error can lead to costly consequences. In fact, if you’re using spreadsheets to track accounts payable, it’s pretty much a given that there are already errors in your process. However, the automated processes and experienced professionals of a service provider can minimize common mistakes. Tighter Controls: Outsourcing accounts payable helps ensure you’re no longer losing or overlooking invoices. Your provider should have a reliable system in place with control procedures to keep track of your papers. Working with a BPO provider should also greatly reduce headaches around research and locating documents as needed. Better Resources: A good business partner can take on your AP operations and provide analytics on possible avenues for improvement. They also have a greater bandwidth to add more volume so they can absorb seasonal increases and year-end crunches more effectively. And if you work with a technology provider as well as an outsourcer, you will be in prime position to learn about the latest in technology and have personalized improvement opportunities available.





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