Malaysian Bill proposes to extend beneficial ownership reporting duties
Malaysian companies are currently subject to limited beneficial ownership reporting under the existing s.56 Companies Act 2016, together with guidelines issued by the commission. In July 2020, the commission issued a consultative document on the Companies (Amendment) Bill 2020, introducing extra provisions intended to bring Malaysia's beneficial ownership reporting framework into line with best international practices. However, that Bill was never tabled in parliament. The new Bill, tabled for its first parliamentary reading on 10 October 2023, will replace it.
As well as the regular reporting and updating requirement, the new Bill expands the definition of beneficial owner to include ownership of either the shares or the company itself, not just the shares. The beneficial owner of shares is defined as their ultimate owner, irrespective of any nominee owners. For companies, the beneficial owner is a natural person who ultimately owns or controls a company, including any person who exercises ultimate effective control over the company.
Section 60B of the new Bill imposes the requirement for a company to keep and maintain a register of beneficial owners at its registered office, as well as forwarding a copy to the commission. The company must also notify the commission of any changes within 14 days. Contraventions would result in a maximum fine of RM20,000 for the company and any responsible officer. Continuing failure to comply would attract further daily fines of up to RM500.
All companies must collect this information by writing to every member of the company and to any person whom the company has reasonable grounds to believe is a beneficial owner. It will be an offence to give false information in response to these letters. The Bill's provisions enable the commission to issue additional guidelines for the purpose of identifying a company's beneficial owner.
The content displayed here is subject to our disclaimer. Read more