Step by step to change the name of the company

Change of company name, is it tough?

Introduction

The company is able to change its existing company name to another under section 28 of the Companies Act 2016

Only the existing company secretary may lodge the application to change the company name

Procedure to change the name of the company

a. name search and application of name

• Conduct a name search on the proposed company name with SSM via mycoid with payment of fee at rm50 per name.

• Once approved, the proposed name will be reserved for thirty (30) days.

• further extension is allowed to a maximum of 180 days with an additional payment of a fee

b. submission of application to change company name

• Submit the documents to ssm (over the counter) with a fee of rm100

  • document 1 - a copy of the application and reservation for the availability of names [section 27(1)(4)]

  • document 2 - a copy of the email from ssm for the approval notification of the reservation of name

  • document 3 - a copy of the application for change of name under section 28 of the companies act 2016

  • document 4 – a copy of directors’ and members’ resolutions

  • document 5 – a photocopy of certification of incorporation/ registration (form 9 or section 17)

c. verification of change of company name

• A notice of change of name will be issued by ssm upon compliance with the procedures and submission of duly completed documents.

• Certificate of incorporation on change of name can be purchase from SSM online portal (mycoid) with the prescribed fee.

d. notify on change of company name

The company can furnish the certificate (with certified true copy) to related government authorities bodies (such as land office, mbjb, mbjbt and etc…) and bank for an update on such change.

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

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Can director personally liable to company tax?

FAQ from our clients during this pandemic relates to this topic ''Director's Personal Liability'' under the Income Tax Act 1967 :

1. I don't have money to close company and submit tax return. Can I leave it there until I have enough money?

2. Will IRB go after me as a director of my company if I don't submit tax on my company?

3. I am a nominee director in this company only. Will IRB take action against me?

4. The outstanding tax arises prior to my appointment as director in 2020. Can I argue with IRB?

5. & more.

Stay tune for our upcoming recent tax cases on director's personal liability.

S75A of the Income Tax Act 1967

Any person who is a director of that company during the period in which the debt is liable to be paid by that company shall be jointly and severally liable for such tax or debt.

(a) where any tax is due and payable by a company, any person who is a director of that company during the period in which that tax is liable to be paid by that company or

(b) where any debt is due and payable from an employer under any rules made pursuant to section 107.

Director means any person who

(a) is occupying the position of director including any person who is concerned in the management of the company’s business and

(b) is either on his own or with one or more associates, the owner of, or able directly or or through the medium of other companies or by any other indirect means to control, not less than twenty per cent of the ordinary share capital of the company.

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

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• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

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We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

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Stamp duty for transfer of shares Malaysia

Section 105(1) of the Companies Act 2016 required any shareholder or debenture holder may transfer all or any of his shares or debentures in the company by a duly executed and stamped instrument of transfer and shall lodge the transfer with the company. 

What is IRB’s STAMPS?

Stamps is an Electronic Stamp Duty Assessment and Payment System via internet.  

STAMPS will be replacing the manual franking system in LHDNM’s counter  with effect from 01/07/2021. 
 
Who can register for STAMPS ? 
1. Company 
2. Agent (Lawyer, Real-properties Agent, etc) 

Stamp duty computation

According to the item 32(b) First Schedule of Stamp Act 1949:  

“On sale of any stock, shares or marketable securities, to be computed on the price or value thereof on the date of transfer, whichever is the greater –  

For every RM1,000 or fractional  part of RM1,000 RM3.00 

Method  #1 – Net Tangible Asset (NTA) 
Formula: 
= Total Asset – Intangible Asset – Total Liability  
 
NTA per share  
= NTA  / Number of shares issued 
 
Method  #2 – Consideration 

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

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• Telegram http://bit.ly/3ptmlpn

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• Website www.thks.com.my

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We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

#Thk

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• Duration under company constitution expires
• A resolution (majority of shareholders) is passed in general meeting
• Triggering event stated in the company constitution & resolution pass in general meeting
• Special Resolution (3/4 majority of shareholders)

We are one-stop (years+ history) audit, tax, secretarial, accounting, and payroll firms that commit to help and grow our client's business.

The disadvantages of buying property via Sdn Bhd (private limited company)

#1 Taxation

The Sdn Bhd will be taxed 24% instead of SME preferential tax rate (17% on first RM600,000 chargeable income, 24% on subsequent chargeable income)

#2 Cost

The cost of setting up a Sdn Bhd run from thousands dollar.

The annual compliance cost on audit, tax and secretarial run from thousands dollar.

#3 Profit distribution

Shareholder can only reap the profit via dividend distribution under the Company Act 2016.

#4 Personal guarantor

The director/shareholder may act as personal guarantor to the bank for loan financing on the property.

#5 Loan Financing Ratio

Bank normally charge higher interest rate and borrowing limits to Sdn Bhd compared with individual.

#6 Transfer of shares

Shares of Sdn Bhd are not openly tradeable and may be difficult to find a buyer.

#7 Closure of company

The closure of sdn bhd may be time consuming and costly.

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

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𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

The advantages of buying property via Sdn Bhd (private limited company)

#1 Risk Diversification

Pool more money up to 50 shareholders into the Sdn Bhd to buy one/more property.

#2 Easy/Flexible disposal

The shareholders who want to exit the investment can be done via transfer of share of the sdn bhd instead of disposal of property.

#3 Execute legal document

The shareholders of the Sdn Bhd can delegate the signing of documents to director of the company.

#4 Estate planning

Share of the deceased shareholder can be transferred to the beneficiaries.

#5 Debt Service Ratio

A ratio where bank use to determine the borrower capacity for payment of debt via company earning power.

#6 Loan to Share Capital Ratio

Higher share capital is used as one of criteria for bank borrowing on property.

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP (Audit, Tax, Advisory)

• Website www.ktp.com.my

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• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

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• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Secretarial, Account/Payroll, Advisory)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

Weekly E-KTP Newsletter #191: Permanently increase of Indebtedness threshold to RM50,000

Summary

A higher threshold for winding up proceedings against a debtor who inability to pay debts

Full story

Suruhanjaya Syarikat Malaysia (SSM) has permanently raised the indebtedness threshold for companies from RM10,000.00 to RM50,000.00 with effect from 1 April 2020; after introduced a temporary measure from 23 April 2020 to 31 March 2021 under Section 466 of the Companies Act 2016.

This initiative was aimed to reduce the burden and impact on companies facing cash flow problems. This is prevention to companies being winding up and able to continue doing business during the COVID-19 pandemic.

Upon implementation of this initiative, the number of winding-up petitions is expected to reduce and companies will be able to continue doing business without worry. This is supported by the number of petitions submitted to SSM from April to December 2020 recorded at 665 cases as compared to 1,760 cases in the year 2019 and 1,533 cases in the year 2018.

Is the threshold considered an appropriate amount? As elaborate from Datuk Seri Alexander Nanta Linggi, the Minister of Domestic Trade and Consumer Affairs, this amount was considered appropriate from two (2) perspective as below:

1. not too low in forcing companies to wind up due to small amounts of debt, and

2. not too high which could burden smaller creditors for not being able to take action against companies in debt.

Hence, SSM hopes that the implementation of this initiative will help and support the corporate sector during the economic recovery period, especially for companies affected by the COVID-19 outbreak.

Source :

SSM Press release https://bit.ly/3dLpE7s

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#windingup

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What should you do on tax matters after the conversion from enterprise to sdn bhd ?

Form CP 502

Upon conversion from enterprise to sdn bhd, you shall vary the instalment payments if do not agree with the Notice of Instalment Payments (CP500).

Form CP502 must be filled up by using a black ink pen and be submitted to the respective IRBM branch which handles the taxpayers' file.

The due date for submission of Form 502 is not later than 30 June 2020.

CP 204 Tax estimation for Sdn Bhd

Submission of tax estimate in Malaysia is mandatory under Section 107C of the Malaysian Income Tax Act, 1967.

According to Public Ruling 07/2011, A company which has been in operation (existing) should furnish estimation of tax payable not later than 30 days before the beginning of the basis period for a year of assessment.

For those that have just commenced business the estimate of tax payable should be furnished within 3 months from the date of commencement of business of the company, trust body or co-operative society.

SME is not required to furnish an estimate of tax payable or make instalment payments for a period of 2 years beginning from the year of assessment in which the SME commences operations.

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• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

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• Instagram https://bit.ly/3u2PxHg

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𝐓𝐇𝐊 (Our associate in secretarial & accounting services)

• Website www.thks.com.my

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We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

What is the valuation of stock for the conversion from enterprise to Sdn Bhd?

Referring to Public Ruling 2/2020 Tax Treatment of Stock in Trade Part 1 - Valuation of Stock

Valuation of Stock equal to

1. Price paid on the sales or

2. Value of the consideration

Valuation of Stock is not market value of the stock

Conditions

Where a person permanently ceases to carry on his business and –

(a) any stock of the business is transferred on cessation or shortly after cessation for a valuable consideration to another person who intends to use that sold or transferred stock in his business

(b) the cost of the transferred stock is deductible as an expense in computing the other person’s adjusted income for the basis period for a year of assessment of his business

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• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP

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𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our job platform for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Our associate in secretarial & accounting services)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.

Registration Procedure:

1. Complete the Registration Form.

2. Every business owner and partners must sign on the registration form.

3. Owner or one of the partners may submit the application over the counter or submit through online via SSM EzBiz Online services in the SSM’s website at www.ssm.com.my.

4. Documents to be attached are as follows:

• Owner’s and /or partner’s identity card;

• Original Business Registration Certificate for the change of business type;

• Supporting document or approval letter from relevant agencies for certain type of business if required by Registrar of Business.

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• Wisma 𝐊𝐓𝐏, 53 Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

• Wisma 𝐓𝐇𝐊, 41, Jalan Molek 1/8, Taman Molek, 81100 Johor Bahru

KTP

• Website www.ktp.com.my

• Instagram https://bit.ly/3jZuZuI

• Linkedin https://bit.ly/3sapf4l

• Telegram http://bit.ly/3ptmlpn

𝐊𝐓𝐏 𝐋𝐢𝐟𝐞𝐬𝐭𝐲𝐥𝐞 (Our internal community for our colleagues)

• Tiktok http://bit.ly/3u9LR6Q

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𝐊𝐓𝐏 𝐂𝐚𝐫𝐞𝐞𝐫 (Our job platform for interns, graduates & experienced candidates )

• Instagram https://bit.ly/3u2PxHg

• Facebook http://bit.ly/3rPxz9o

𝐓𝐇𝐊 (Our associate in secretarial & accounting services)

• Website www.thks.com.my

• Facebook http://bit.ly/3duvQ5z

We are one-stop (20 years+ history) audit, tax, secretarial, accounting and payroll firms which commit to help and grow our clients business.