Articles
Learn how to start and properly operate a business in Malaysia. These articles are also useful for new business owners.
Customer Testimonials
Hear what our valuable clients have to say about their experience with Bossboleh.
BB e-Learning School
Education should be accessible to all. This platform breaks barriers with curated video lessons at your fingertips.
Fixing Your Financial Year End
What is a Financial Year End?
The financial year is a period in which the financial statements of the company are made up.
Your company’s financial year end will be the basis of which your corporate income tax, Annual General Meeting (AGM) if any, and lodgement date of financial statements with the Registrar are determined.
Although the Companies Act 2016 (‘Act’) does not specify the date of the financial year end, the Act requires that every company must prepare its first financial statement within 18 months from the date of incorporation, and subsequently within 6 months from each financial year end. The audited financial statements must be approved by the board of directors, and further circulated to its shareholders, directors, and auditor. After which, the company is required to lodge the financial statements with SSM within 30 days from the date of circulation.
How do I choose my Financial Year End?
We would advise to take into consideration the following factors when deciding the Financial Year End of your company:
- Business Needs
The financial year end of your company ideally corresponds with your business cycle and needs. Companies may also consider avoiding peak seasons such as June or December as their year-end.
For example, businesses that are inventory-intensive may consider fixing their year-end that is aligned with a time where inventory is at its lowest. With lesser inventory to be counted, you will be able to reduce the time required for inventory counting process, which reduces costs and allows you to close the books more efficiently. - Tax Period
Generally, the basis period of a company is the same as the company’s accounting period. The first accounting period is the basis period for a year of assessment when the accounts are closed. It would be the first year of assessment for the entity. The sooner your financial year ends, the sooner you are required to file and pay your company’s income tax. - Accounting Periods of Companies within the Same Group
The Act requires that the financial year of the companies in the group coincides with the financial year of the Malaysian holding company. The directors shall ensure that this requirement is complied with within 2 years after any corporation becomes a subsidiary of a holding company.
Want to know more about starting a Sdn Bhd? What’s the best way to start one, and what should you be mindful of? Register and find out in our upcoming webinar!
Are you ready to form your Sdn Bhd with Malaysia’s #1 award-winning Online Company Secretary? Contact us now via WhatsApp @018-767 8055