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Q：
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What is the financial year of a company?
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A：
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The financial year is a 12-month period that a company uses for accounting and tax purposes. The first financial period of a company can be more than 12 months, so long as it is within 18 months from the date of incorporation. Malaysian companies has the freedom to set their own financial year end since the Companies Act 2016 does not specify a mandatory financial year end for Malaysian companies.
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Q：
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What are the common reasons for a company to determine or change its financial year?
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A：
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When determining a company's financial year end, factors like business nature, industry standards, and taxation period must be considered. Companies often change their financial year to align with their holding company's financial year or due to changes in internal operations or policy.
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Q：
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What are the compliances following change of financial year?
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A：
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A company must adhere to the circulation and lodgement requirements of its financial statements, even if it changes its financial year end (“FYE”). The company must circulate its financial statements to members within 6 months of the FYE, and lodge the same with the Companies Commission of Malaysia (“CCM”) within 30 days after circulation. Non-compliance with these requirements may render the company and every director liable to a fine imposed by the CCM.
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Q：
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What are the necessary actions to take following a change in the financial year?
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A：
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If the new FYE is later than the original FYE, the company must apply for an extension of time (“EOT”) to circulate and lodge the financial statement from the CCM. Such application must be made at least seven (7) days before the original circulation and lodgement due date.
However, if the change in FYE does not result in a new circulation due date later than the original, the company does not need to file for an EOT.
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Q：
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How many EOT attempts can a company make?
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A：
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If the company is unable to lodge financial statements and reports within the first extended time, it can apply for a subsequent EOT application for such lodgement. A maximum of 2 attempts at EOT can be made, and each attempt has an extension of 90 days.
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FAQ
