The preparation and submission of financial statements to the authority is governed by Section 248(1)(a), Section 258(1)(a) and Section 259(1)(a) of the Companies Act 2016 (the “Act”). The preparation and submission of financial statements is the sole duty of the directors.
Failure to prepare and submit financial statements is a criminal offence that can be penalized in accordance with Section 248(3), Section 258(3) and Section 259(3) of the Act.
Section 248(3) states that the director of the company that contravenes this section commits an offence and shall, on conviction, be liable to a fine not exceeding RM500,000 or imprisonment for a term not exceeding 1 year, or both. Further, Section 258(3) and Section 259(3) carry a fine of not exceeding RM50,000.
The court of law may at their discretion impose bail and/or the surrendering of passport of director before the finalization of the case.
It was recently reported that many companies continue to commit routine offences, such as failing to submit annual returns and financial statements, which result in legal action.
The authority revealed that 6,517 legal actions were taken against companies last year for various offences, including corporate governance violations (The Straits Times, 29 December 2024). The failure to file annual returns and financial statements is one of the most frequent offences leading to legal action, as reported by the authority.
We enclose herewith, recent media announcement by the authority on pending legal case on the above subject matters. At the firm, we strongly advise directors to take a pro-active measure to clear backlog cases on the preparation and submission of financial statements to the authorities to avoid legal implications.
We, Megat Faizal Musa & Co, a Firm of Chartered Accountants, licensed by Malaysian Institute of Accountants and Companies Commission of Malaysia, provides extensive services in accounting/finance, taxation, secretarial and corporate advisory services.
We are a multilingual firm, proficient in English, Malay, and Chinese languages.
For English/Malay speaking clients, please contact:
E-mail: megat.faizal@mfmco.my
Mobile: +6010 372 6830 (Call/WhatsApp)
For English/Chinese speaking clients, please contact:
E-mail: lee.mf@mfmco.my
Mobile: +6010 381 2996 (Call/WhatsApp)