Sdn Bhd Survival Guide: Navigating Annual Fees 

Starting a company is easy, but sustaining it requires careful planning and financial commitment. Before diving into the incorporation of a company, particularly a Sendirian Berhad (Sdn. Bhd.) or Private Limited Company in Malaysia, it’s imperative to map out a concise budget for its yearly maintenance. 

A critical aspect of this planning involves understanding the company registration cost in Malaysia, especially for entrepreneurs eager to establish and maintain a Sdn Bhd. In this blog post, we will explore the significant annual recurring fees involved in sustaining your Sdn Bhd and why staying on top of these financial obligations is crucial for Malaysia’s business longevity. 

While company registration costs in Malaysia may seem overwhelming, remember that maintaining a business is an ongoing commitment. This blog post serves as your comprehensive guide to the essential annual recurring fees associated with your Sdn Bhd, empowering you to budget effectively and navigate compliance with ease. 

What is a Sdn Bhd Company, and How is it Different from Other Business Structures? 

Before delving into the annual recurring fees, let us first understand what a Sdn Bhd company is and how it differs from other business structures. Basically, a Sdn Bhd company is a type of business entity that offers limited liability to its shareholders, protecting their personal assets from business liabilities. Comparatively, sole proprietorship, partnership, and limited liability partnership do not provide the same level of protection for business owners. Sdn Bhd companies require a minimum of one director and one shareholder, and their liability is limited to the amount of share capital they hold. This business structure grants Sdn Bhd companies the capacity to sue or be sued in their own name, own property, enter into contracts, and pay tax on their profits at the corporate tax rate. 

Want to upgrade to a Sdn Bhd? Discover the key indicators in our blog: Key Indicators to Upgrade Your Enterprise to a Sdn Bhd.

Advantages of a Sdn Bhd 

Before we delve into the annual fees associated with a Sdn Bhd, let’s explore the benefits of incorporating one. A Sdn Bhd, or Sendirian Berhad, is a type of private limited company prevalent in Malaysia, known for providing numerous advantages to business owners: 

• Limited Liability Protection: Shareholders have the assurance that they are not personally liable for the company’s debts, which helps protect their personal assets. 

• Enhanced Credibility: A formal business structure like a Sdn Bhd tends to garner greater trust from customers, suppliers, and investors, enhancing the company’s reputation and stability. 

• Perpetual Succession: A Sdn Bhd continues to operate regardless of changes in ownership or management, ensuring its longevity and sustained operation. 

• Tax Benefits: This structure benefits from lower corporate tax rates and potential government incentives that are not available to informal business entities. 

• Easier Capital Raising: The ability to issue shares and attract a diverse group of investors makes it easier for a Sdn Bhd to access funding and grow. 

These features make Sdn Bhd an attractive option for entrepreneurs looking to establish a resilient and credible business presence in Malaysia. 

Understanding Yearly Maintenance 

“Yearly maintenance” refers to the fees you need to pay to keep your company compliant with the regulations and laws in Malaysia. There are typically four professionals that you will need to work with to ensure compliance and smooth operations: 

1. Company Secretary 
2. Tax Agent 
3. Auditor 
4. Accountant 

Let’s explore each of these professionals in detail and understand their roles. 

The Role of a Company Secretary 

The company secretary plays a crucial role in managing your company’s secretarial matters in compliance with the Companies Act 2016 and Suruhanjaya Syarikat Malaysia (SSM). As required by the Companies Act 2016, all Sdn Bhd companies in Malaysia must have a Malaysia company secretary, also known as pemegang saham. Their roles are to advise directors on issues pertaining to the Companies Act 2016 and ensure the company is in compliance with the Act. In Malaysia, there are various types of business entities, including Sdn Bhd companies, that require a company secretary or pemegang saham. While some larger companies may have an in-house company secretary, it is not cost-effective for SMEs to hire a full-time secretary. Therefore, many SMEs outsource this role to service providers like Grof to ensure a cost-effective solution. Key responsibilities include: 

• Annual Return: Every year, pursuant to Section 68 of the Companies Act 2016, within 30 days of your anniversary date, your company secretary helps you file the Annual Return with the SSM. This crucial document outlines your company’s essential details, keeping the authorities informed. 

• Financial Statement Lodgement: After your financial statements are audited and circulated to members, your company secretary ensures they’re lodged with the SSM within 30 days. This transparency is vital for maintaining good standing. 

The cost of appointing a company secretary in Malaysia typically ranges from RM60 to RM100 per month or RM720 to RM1,200 per year. Additionally, the company secretary assists in performing the Annual Return of the company. The cost of performing an annual return is usually around RM400 to RM800, depending on whether the fee to SSM is included or not. The company secretary is also responsible for lodging the company’s audited financial statements to SSM, which is estimated to cost approximately RM800 to RM1,200. 

At Grof, our pricing depends on the number of shareholders. For local companies, the fees are RM 3,800 for 1 shareholder, RM 4,100 for 2 shareholders, and RM 4,600 for 3 to 5 shareholders. For foreigners running offshore companies, the pricing is RM 15,800 for 1 shareholder, RM 16,100 for 2 shareholders, and RM 16,600 for 3 to 5 shareholders. Our secretary service includes all services, including Annual Returns (AR) and Audited Financial Statements (AFS), with no additional hidden costs. For more details, you can refer to Grof’s incorporation page.

The Role of a Tax Agent  

Filing company taxes in Malaysia can be complex, and it is not advisable for business owners to handle it themselves. Hiring a tax agent in Malaysia ensures that your tax computations and filings are accurate and optimised. A tax agent will track deadlines and complete the tax computation with the Inland Revenue Board of Malaysia (IRB). 

When incorporating your company, it is advisable to appoint a tax agent and fix your financial year-end. This allows the tax agent in Malaysia to monitor your tax compliance deadlines effectively. The typical cost for tax computation and filing for a startup company is between RM1,000 to RM1,500. 

The Role of an Auditor 

According to the Companies Act of 2016, all companies incorporated in Malaysia must have their accounts audited by an approved and qualified auditor. Engaging an auditor in Kuala Lumpur, the capital city of Malaysia, is not just about meeting legal requirements; it adds a layer of credibility to your business. Entrepreneurs and small business owners should view auditing as an opportunity to enhance financial transparency, instilling confidence in stakeholders and potential investors. This independent review strengthens financial credibility and instils confidence in stakeholders. An auditor: 

• Conduct a Comprehensive Review: They meticulously examine your company’s financial statements, ensuring accuracy and adherence to accounting standards. 

• Issue an Audit Report: Based on their findings, the auditor issues a report expressing an opinion on the fairness and accuracy of your financial statements. 

The cost of an auditor for a startup company in the first year usually ranges from RM1,500 to RM2,500. After the auditor prepares the audited financial statements and they are approved by the board, they will be lodged with SSM within 30 days by the company secretary. 

The Role of an Accountant 

Accountants are the architects behind your financial statements. Before being audited by an external auditor, financial statements are meticulously prepared by accountants. Their role is not just confined to number-crunching; they provide insights into the financial health of your corporation. Engaging a skilled accountant is an investment in ensuring that your financial records are not just compliant but also strategically aligned with your business goals. Depending on your needs, your accounting fee would cost between RM500 to RM7,000 a year. 

Before the auditor steps in, your accountant plays a crucial role. They: 

• Prepare Financial Statements: They meticulously compile your corporate’s financial records, translating them into clear and concise financial statements. 

• Work Hand-in-Hand with the Auditor: The accountant collaborates with the auditor, providing necessary information and clarifications for a smooth audit process. 

Typically, accounting fees for a startup company range from RM500 to RM3,500 per year. The fee depends on the complexity and volume of transactions. For companies with a higher transaction volume, the accounting fee is usually higher. 

Summary of Yearly Costs

To summarise the yearly costs of running a newly set up company in Malaysia, let’s take a look at the fees associated with each professional:

Professionals	Fees Range (RM)
Corporate Secretary	1,200 – 2,500
Accountant	500 – 5,000
Tax Agent	1,000 – 1,500
Auditor	1,500 – 2,500
Total Yearly Cost	4,200 – 11,500

It’s important to note that these costs are estimates and can vary depending on the complexity and size of your company. Additionally, it’s crucial to consult with professionals and service providers to get accurate pricing tailored to your specific requirements. 

Tips for Managing and Budgeting Annual Recurring Fees 

Managing and budgeting for annual recurring fees is crucial to ensure the financial sustainability of your SDN BHD corporate. Here are some tips to help you effectively manage these fees: 

• Plan Ahead: Incorporate the annual recurring fees into your financial planning from the beginning. This will help you allocate the necessary funds and avoid any financial strain. 

• Keep Track of Deadlines: Stay organised and keep track of the deadlines for filing annual returns and other required documents. Missing deadlines can result in penalties and affect your company’s compliance status. 

• Review Service Providers: Regularly review and evaluate the performance and fees of your service providers, such as auditors and company secretaries. Consider obtaining quotes from multiple providers to ensure you are getting the best value for your money. 

• Stay Updated with Regulations: Keep yourself informed about any changes in regulations or fee structures. Attend seminars or workshops conducted by industry experts to stay updated on the latest developments. 

By following these tips, you can effectively manage your annual recurring fees and ensure the financial sustainability of your Sdn Bhd company in Malaysia. 

Ready to Simplify Your Sdn Bhd Compliance? Outsource to Grof! 

Managing these diverse professionals individually can be overwhelming, not to mention time-consuming and expensive. Consider Grof, your one-stop solution for seamless business compliance. We offer a comprehensive package encompassing company secretarial services, tax filing assistance, and accounting support, all under one roof. This means: 

• Cost-Effectiveness: Eliminate the need to manage multiple invoices and enjoy competitive bundled rates. 

• Streamlined Efficiency: Say goodbye to juggling communication with different professionals. Grof acts as your central point of contact for all compliance needs. 

• Expertise at Your Fingertips: Leverage our team of dedicated professionals, each well-versed in their respective fields. 

Conclusion 

In conclusion, understanding and budgeting for annual recurring fees are essential aspects of sustaining your Sdn Bhd in Malaysia. From a diligent company secretary to a reliable tax agent, each professional plays a crucial role in ensuring your business’s compliance and financial health. By choosing Grof’s integrated services, you can simplify these processes, making the journey of sustaining your business not only compliant but also efficient. Grof offers a comprehensive solution that covers company secretarial services, tax agent responsibilities, auditing requirements, and accounting needs – all under one roof. This streamlined approach not only ensures compliance with SSM but also simplifies your yearly obligations. 

Running a successful business shouldn’t involve administrative headaches. Let us at Grof, your financial sidekick, handle the annual recurring fees for your Sdn Bhd, allowing you to focus on what truly matters: growing your business. Visit our website today to learn more about our incorporation and compliance services, and take the first step towards a thriving Sdn Bhd journey.