Shareholders can leave a company at any time for several reasons: it may be to remove shareholder from a company, recoup investment or as a result of death.

Regardless of the cause, their shares must be transferred through gift or sale to another person.

The new shareholder’s information needs to be recorded in the company’s register of members and subsequently updated in the SSM System.

Remove shareholder from a sdn bhd

Disputes amongst shareholders can result in several challenges. Therefore, endeavour to avoid them as much as you can.

It is very difficult to force members to leave a company. After all, they are under no compulsion to sell their shares, except if the agreement of the shareholders or articles is well-drafted to include a particular departure procedure.

The first thing to do to resolve an issue is negotiation. Most shareholders could offer a fair value for the minority’s shares. If they decline to negotiate, then you could take severe measures by winding up the company.

However, you can only perform this should the minority have below 25% of the issued shares. You will need a 75% majority of the shareholder’s votes to pass a specific motion to wind up the company.

As such, it is impossible to remove shareholder without proper consent from the respective parties

Shares ownership Transfer

Limited company shares can be gifted or sold to other individuals by using a stock transfer form. The company director is in charge of filling in this form to officially transfer ownership from one individual to another. Thereafter, a share certificate, upon request by the shareholder, must be given to the new shareholder.

Shareholder’s death

Should a shareholder die, their share’s ownership may pass under the terms of his or her will to a named recipient. In situations like this, the company director will need to implement a stock transfer form to formally handover ownership to the beneficiary. After all, the transfer of shares to an individual who does not have any relevant business know-how, or subscribe to the company’s visions and objectives can result in huge troubles.

Several companies incorporate provisions in a shareholders’ agreement to handle the demise of a shareholder. It is typical for an agreement to say that, upon a shareholder’s death, his or her shares will be passed to a particular person or be made available for purchase by current company members or the company itself.

Updating member’s register

Every limited company needs to keep a member’s register. This item is utilised to record the names and addresses of every member, details of the shares they hold, the date they were incorporated as a member of the company and the date they ceased to be a member.

Shareholders become members on the date they purchase shares. They stop from being members on the date their shares are transferred to another person.

A resignation of director can be effected by the existing director tendering his resignation to the board of directors.

You can have an existing director resigned from your company as long as they are not the only director that is currently listed on the board of directors.

If you are seeking to replace a single director with another one, you would need to add the new director first before having the old one resigned to ensure that there is always at least one serving director listed for the company at all times.

The sole company director must also be a person, not a corporate entity such as another company or a firm.

How to resign as director from sdn bhd?

A person may resign as company director in sdn bhd by tendering his resignation in writing to the board.

Upon receiving the intention from the director to resign as company director, the board of director must notify the company secretary.

The company secretary will prepare the resolution for the board to approve the resignation of the director and then submit the relevant document to SSM.

The information indicated in the document submitted to SSM includes:

1. Date of ceased as director
2. Full name
3. Identity card number

Board of directors may reject the resignation of director

In some circumstances,  the board of directors may refuse to accept the resignation of director and refuse to lodge the resignation document to SSM.

The refusal may due to the following considerations:

1. The resigning director is a contract employee
2. The resigning director is a party to the shareholders’ agreement
3. The resigning director is involving a possible serious breach of trust case

It is important to have the mutual understanding from all parties to resolve the matter in the win-win situations.

Starting a business is to make a change for better future.

“Change is the law of life and those who look only to the past or present are certain to miss the future.”
– John F. Kennedy, 35th President of the USA

An entrepreneur is anyone who chooses to go it alone and make the most of a business opportunity for themselves no matter how big or small.

Reasons for starting

People choose to become entrepreneurs for a variety of reasons.

For some it will be an opportunity to escape their mundane nine-to-five existence and to commit their working lives to something which is a lot closer to their heart.

For the ‘lifestyle’ entrepreneurs the important part of the deal is not how big their business ends up but the effect in has on their lives.

For more and more people this is becoming a legitimate career choice. Gone are the days when you had to have years of business experience under your belt before you might even consider taking the plunge with a startup of your own: nowadays everybody’s doing it.

And if you’re reading this, you’ve already taken your first steps in joining them

What business you can start

David Creswell, 27, of comics website ComicDomain.co.uk falls into this category: “I don’t care if I’m a comic geek, it’s my hobby and I’ve turned that into a small business, I’m proud of the service we provide and our customers are also happy.”

For others the motivation for starting up will come from spotting a gap in a market they know well. ‘Ski Bums’ Tim Slade and Jules Leaver spotted an opportunity for ‘been there done that’ T-shirts to sell to skiing holiday makers. Their high street chain Fat Face now turns over £25m.

And for Dee Edwards, 29, the same sort of insight helped her to launch internet company Habbo Ltd. “I really believed internet business could be made successful by using technology to run a business effectively and leveraging the different way people were changing their communication,” she says.

Whether it be t-shirts or technology the world is littered with those who’ve been able to see a business opportunity others simply can’t. In fact a lack of business experience could well give you the kind of perspective those with a blue-chip CV would struggle to attain.

What qualities you need

Passion

If you are going to choose to become an entrepreneur, one of the most important factor is passion.

No matter how much your potential your business might have for making money, unless you believe in it, how can you expect anyone else to? A bit of self-belief can go an awful long way.

Commitment

Hand in hand with passion comes commitment to the cause.

From day one you’ll need to work incredibly hard, often forgoing friends and family to get your venture off the ground.

You need to ask yourself whether you’re prepared to make that kind of sacrifice and whether you can keep yourself motivated to put in those long, long hours.

If you’re the sort of person who’s new year resolution lasts until January 2nd you might want to think again whether you’ve got what it takes, particularly when things might not be going your way.

Be alone

And, as you’ve probably realised, you’ll be going through all of this on your own.

While escaping the office might seem like paradise now you could soon be longing for a bit of mindless gossip and backchat.

You’ll need to dig deep to find the kind of emotional resilience to keep you from losing the plot when there’s no-one around to lend a helping hand.

So while you don’t need qualifications on paper, not just anyone can become an entrepreneur.

But if you think you’ve got what it takes then it could be one of the best decisions you ever make.

Malaysia itself is well located within Asia Pacific and Asean! Malaysia with recent ranking being the top 6^thcountry in the world as the most easiest and friendliness in doing business by World Bank! Malaysia achieves a commendable surge from 23^rd  position to 6^th position among 189 economies in the latest World Bank Doing Business 2014. This proof Malaysia truly on track on its economy transformation and bale to poise a place of investment welcoming foreigners!

Malaysia is ranked number one for Getting Credit, number four for Protecting Investors, number five in Trading Across Borders and is the 6th most competitive among 189 economies in the World Bank Doing Business 2014

Malaysia is a place of growth! A place of stability, affordable living with abundance of business investment opportunities in Malaysia! Malaysia welcomes foreigners! Begin your start-up in Malaysia, a perfect place to spring board of your business to the region!

The new Limited Liability Partnerships Act 2012 which came into force in December 2012 introduces limited liability partnerships (LLP) as a new alternative business vehicle which offers flexibility in terms of its formation, maintenance and termination and reduction of company registration fees in Starting a Business. Entrepreneurs now have more options to choose the most preferred form of business vehicle and the introduction of LLP would benefit small businesses (start-ups), professional groups, joint ventures and venture capital funds.

Industrial hub

A foreign owned company can invest in every business sector.

Because of the abundance of cheap raw materials and skilled labour, Malaysia’s reputation as a manufacturing hub is growing considerably. The country is rich in several natural resources such as palm oil, rubber, timber, oil, and tin;

Due to Malaysia’s vast amount of natural attractions, Malaysia is labelled as “a destination full of unrealized potential” by the World Travel and Tourism Council (WTTC). Therefore there is lots of growth potential in the Malaysian tourism industry which foreign investors can tap into with Malaysia business registration;

Malaysia is an ideal location for a regional headquarters. Located in the centre of South East Asia, Malaysia is in close proximity to many leading Asian markets such as Singapore, Vietnam, Thailand, China, and India; Malaysia is a natural choice for shared services in view of its low costs, particularly for infrastructure, conducive business environment, and high levels of global integration.

The labour market conditions in Malaysia are favourable. Labour costs in Malaysia are relatively low while productivity levels remain high in comparison with industrialised countries. Basic literacy  among the labour workforce is high, and the workforce is youthful and trainable and the environment is generally strike-free.

With four major ports, and an ideal location on the straits of Malacca, Malaysia is an excellent location for trade by sea;

Malaysia boasts five free zones offering foreign companies no custom duties, and flexible trading laws. The five free zones are Pasir Gudang, Port Klang, Port of Tanjung Pelepas, Kulim Hi-Tech Park, and Bayan Lepas;

Malaysia is a member of the Association of South East Asian Nations (ASEAN). Therefore companies registered in Malaysia can benefit from the free trade agreements that exist between the member states;

In order to attract foreign investors in Malaysia investment, some laws in regards to foreign ownership are being relaxed. The foreign ownership limit of stock brokerages is to be increased to 70% from 49%. There can now be 100% foreign control in wholesale fund management companies in Malaysia. The limit for unit trust companies has also been increased to 70%;

To attract foreign investors and encourage Malaysia business, the Malaysia government developed industrial parks, including free industrial zones, technology parks, and Multimedia Super Corridor (MSC). There are investment incentives such as Pioneers status, BioNexus status and Multimedia Super Corridor (MSC) status where companies can enjoy tax free for a number of years;

Malaysia’s continuous economic growth is reflected by the average GDP growth for the past 10 years of 1.17%. Malaysia has registered GDP growth of 6.3% which is the highest among ASEAN countries in the first half of 2014.The estimated GDP growth for 2014 & 2015 is between 5.5% and 6%. This continuous growth means more opportunities for entrepreneurs;

A cheaper alternative to Singapore

Malaysia is a great alternative to Singapore for a regional headquarters due to business costs.

In 2012, Malaysia’s monthly office rental space was US$17 per sqm. This is significantly lower than Singapore’s average monthly office rental space of US$ 68 per sqm

The average worker in Malaysia is more affordable than in Singapore. In 2012, the average wage in Singapore was US$3,245 whilst the average wage in Malaysia was only US$2,310;

To rival the successful Singapore tourism sector, Malaysia is aggressively building hotels, amusement and theme parks, shopping malls, luxurious residential complexes, art galleries and museums. By 2013, Malaysia is expecting to attract 29 million tourists;

Malaysia wants to repeat the success of Singapore by growing its industrial and services sectors. For example, Malaysia has already developed ports such as Port Klang to serve major shipping routes;

To compete with Singapore’s manufacturing sector, Malaysia provides investment incentives such as a pioneer status, and an investment tax allowance to foreign manufacturing companies.

Language

English is Malaysia’s second language, and is spoken by 70% of the population. Therefore, foreign investors interested in Malaysia will easily be able to communicate with local employees, customers and suppliers;

Business documents are mostly available in English, therefore translation costs and time can be saved during company registration in Malaysia or when conducting business.

Islamic community

Malaysia is a great location for members of the Islamic Community who wish to invest in South East Asia. Here are a few reasons why members of the Islamic community should consider Malaysia:

Halal Parks – These parks are designed to ease business registration procedures in Malaysia and provide incentives for all Halal-related manufacturing sectors;

Liberal views on Islam – Malaysia can be seen as the gateway between the “Islamic world” and the “Western world” due to their modern Islamic practices. As a result of this, Malaysia’s economy is suited for both Islamic and Western corporations;

Islamic Banking – Malaysia has one of the biggest sharia compliant assets. There is no restriction on repatriation between international Sharia bank accounts.

Population

The demographics of Malaysia are represented by the multiple ethnic groups that exist in this country. In 2010, Malaysia’s population is 28.6 million which makes it the 41st most populated country in the world. Of these, 5.72 million Malaysians live in East Malaysia and 22.5 million live in Peninsular Malaysia. The Malaysian population continues to grow at a rate of 2.4% per annum. In 2010, the Malays were 60.3%, Chinese 22.9%, and the Indians 7.1% of the total population. Malaysia’s population is projected  to  increase  by  10 million (35.0%) to 38.6 million in 2040.

Political Structure

The ethnically and religiously diverse constitutional monarchy of Malaysia has been ruled by the United Malays National Organization since independence in 1957.

Currency

Malaysian Ringgit (“MYR”)

Type of Law

Common Law

We will provide you with local Nominee Directors who are Malaysia citizen and closely associated with the management team in Bayabumi Accountancy, with guaranteed good services. Bayabumi Accountancy has been providing Nominee Directors services in Malaysia. Based on our extensive experiences and good feedback with 100% satisfaction rating received so far, we are confident that we will be able to provide you with guaranteed quality of Nominee Director Services that would satisfy your requirement. The Nominee Directors are supported by highly competent professionals and have the required skill set needed to discharge their duties as local directors and to assist companies in the fulfilling of the requirements and guidelines as set out in the Companies Act and by the local Authorities. Bayabumi Accountancy can help companies to maintain their good standing status and ensure their full regulatory compliance at all time. As the responsibilities of the Nominee Directors are very onerous, to safeguard the interests of the nominee director, we require a security deposit to be kept with us for as long as our Nominee Director Services is being engaged.

Our Nominee Director will sign an agreement with you to provide you with the assurance that they will not be involved in your business operation, as well as not to be your bank signatories, so that you can have full control over your bank account(s) and company.

We understand that we have competitors who are not collecting security deposit but you should always be aware that they usually are able to do so by outsourcing their Nominee Director services.

Some service providers in Malaysia are providing nominee director services without performing any due diligence review. These service providers are taking the risk of ending up with high risk clients especially those who are involved in money laundering or terrorism financing activities.

If a nominee director is involved in a legal suit, all the companies with the same nominee director will be affected as well. That nominee director might implicate your company resulting in investigation being carried out on your company. This is a very serious implication to you and will cause ample inconvenience to you including requiring your regular presence in Malaysia to assist with any investigation.

Only service providers who meant business and are concern with the reputation and well-being of all their clients will perform due diligence review and ask for valid and sufficient supporting documents to ensure conformity. This is a good practise which is beneficial to you as they will perform thorough screening of their potential clients ensuring that all clients are good and will not implicate each other causing unnecessary losses or inconvenience.

You should also be sceptical with service providers that do not perform or perform minimum due diligence review and are able to set up a company for you with nominee director services  using basic information such as passport and address proof only. Such errant service providers may be black-listed by financial institutions as high risk client category resulting in difficulty or pro-longed process in opening a bank account.

While some people have the misconception that companies with foreign setup will not be able to have a bank account successfully opened by the financial institutions, it is in fact due to the due diligence review issue which resulted in them being listed as high risk clients by the financial institutions. That is the reason why most banks prefer a foreigner with valid work pass before they consider approving a bank account for the foreigner as they could perform their due diligence review based on records available in the government’s database.

With the above analysis, please rest assured that with Bayabumi Accountancy , you will not encounter any of  these problem. Our world class due diligence review system which has passed the assessment by the Singapore Authority is of guaranteed quality of services. For customer like you and those who has reputable branding overseas the quality of your nominee director , is important and our assurance is to provide you with the stability required including the commitment of fulfilling all the rules and regulations.

With such good system, financial institutions place high confident in us and we have very close banking relationship with them. This can assure you a smooth and easier process for any bank account opening application, even with a 100% foreign ownership company, if you are starting  a genuine business start-up in Malaysia. Based on our records, we have not encountered any rejection of bank account opening application because of sole foreign ownership issue.

Choosing between having a local Malaysia nominee or not largely depends on the requirement of the nature of your business. If one is not careful on the appointment, the following four complications may arise:

• All directors are required to sign company documents for the smallest changes, nominees do not turn up to sign.
• Nominees credit score over time is not good, this will affect the health of the company
• Dispute to claims of the Company’s authority and shares.

In Bayabumi Accountancy , we provide our own Nominee Directors to guarantee our customers safety. You can terminate our Nominee Director Service anytime by providing us with the details regarding an alternate local resident director. We will do the necessary paperwork, file the change with authorities and promptly refund the security deposit back to you.
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Companies Act 2016 have finally come into force on 31st January 2017. It is said to create an environment that is more cost-effective for businesses .

Main changes that YOU SHOULD KNOW :-

1. One Person Company – Private companies can now be incorporated with one person being the only director and the only shareholder. Besides, the appointment of the first company secretary can be made within 30 days from the date of incorporation of the company.
2. Removed Authorised Share Capital – Private companies would no longer have Authorised Share Capital. There will only be Paid Up Capital.
3. No Par Values Shares – This means that issuance of shares no longer carries a par value.
4. Memorandum & Articles of Association (M&A) – M&A is no longer needed for incorporating a new company. For existing company with M&A, the M&A will now be deemed to be the Constitution. It is recommended that companies  review their M&A and make appropriate amendments, construct a Constitution; or choose not to have their own M&A / Constitution.
5. Common Seal Not a MUST HAVE – Companies are no longer required to have a common seal.
6. Annual General Meeting – Private companies are no longer required  to hold AGM as it can be simplified by passing written resolutions, unless constitution stated otherwise.
7. Filing of Annual Return – The annual return shall be lodged not later than 30 days from the anniversary of the incorporation date. Previously, the annual return would be filed after the AGM.
8. Dividends – Before declaring dividends, directors must be aware of the new solvency requirement.
9. Form 9 Has Been Removed – Companies will only receive Notice of Incorporation upon successful incorporation. Certificate of Incorporation will be issued upon application by the company and upon payment of a prescribed fee.
10. Publication of Name – A Company shall disclose its registered name and registered number on websites and all other forms of its business correspondence and documentation.

As a business owner, you dream of undivided focus on growing your business and increasing your profits. Last thing you want is your management resources being tied up by unproductive reporting, compliance and administrative work. However, you felt that you had no choice, as hefty penalties can be disastrous to your business should your team overlooked any material requirements.

At Bayabumi, we are professional accountants who understand business. That is why our solid, comprehensive offerings are put together to satisfy needs of most business owners. With a dedicated service personnel and multiple expert teams to help you in areas including GST, income tax, bookkeeping and company secretary, you can allocate more time to focus on your business activities. In terms of business consultancy, we are also able to leverage our one-stop proposition to take a helicopter view and share useful insights of your business situations.

For any business entrepreneur, selecting an ideal jurisdiction for company incorporation is a critical decision. Some of the most important variables to consider include the costs and procedures associated with incorporation, the regulatory requirements of the local Companies Commission and the degree of foreign ownership and directorship allowed.

In Malaysia, company incorporation is a relatively easy and quick process. The favorable market conditions, strong economy, tax benefits and 100% foreign ownership has encouraged several entrepreneurs to incorporate limited liability (Sdh Bhd) companies in Malaysia. Foreign investors are required to apply to a foreign investment committee when applying for more than 30% shareholding of their newly incorporated company.

In addition, setting up a company in Malaysia requires the appointment of a company secretary. According the rules set out by the Companies Commission Malaysia (abbreviated SSM in local vernacular), the company secretary shall be a local resident and a natural person and not a corporate. The secretary shall also be a member of any professional body as prescribed by the Minister of Domestic Trade and Consumer Affairs or as licensed by the SSM itself.

Extensible Business Reporting Language, which is also known as XBRL, is an electronic language designed to enable the automation of business information requirements, i.e. the preparation, sharing and analysis of financial reports, statements, and audit schedules. Governments, regulators, and other organisations in many nations have adopted XBRL as it automates the process and communication of business and financial data. Furthermore, XBRL helps to save cost, improve efficiency and accuracy to all involved in supplying or using financial data.

XBRL initiatives in Malaysia

Although the XBRL initiatives in Malaysia are in its infancy, we can foresee that the development and deployment of a new SSM’s XRBL online document submission platform will improve the administration of business reporting and the maintenance of data.

a) The automation of business reporting

The implementation of XBRL will be enable companies to file their annual returns and audited accountselectronically. In addition, it allows SSM to capture critical financial information from registered companies and provide analytical insights into the Malaysian business landscape.

b) The improvement in transparency and efficiency of data analysis

The new XBRL initiative will improve transparency and enhance the efficiency of capital markets by enabling analysts and other users to sort out and analyse facts easily with the automation of business intelligence.

c) The enhancement in data exchange

The new XBRL platform will make business information to be exchangeable among regulators (regulators here include tax and financial authorities, central bank and governments) because XBRL is a global standard used to electronically exchange business information.

Why XBRL?

The implementation of XBRL initiative has many advantages:

a) Global standard

XBRL is a global standard that has been accepted and adopted to reduce inconsistencies in terminologies and data formatting.

b) Improved accuracy

The automation of business data improves data accuracy, as the data can be both calculated and verified.

c) Speed

XBRL enables producers and consumers of financial data to switch from expensive manual processes to the automation of business data. The automation of business information is less time-consuming – where the time needed to assembly and re-entry of data is now much shorter than before.

d) Reusable

The XBRL data is reusable – the data can be reused to represent the same data in multiple ways and multiple formats once entered.

Who will benefit from using XBRL?

The following is a list of how XBRL will affect various parties in the financial information supply chain:

a) Companies who prepare financial statements

Financial statements will be created one time and rendered as printed reports, on websites, or as other regulatory filings.

b) Analysts, Investors, and Regulators

Automated analysis, less re-entering of financial information from one form into another form, are the advantages that will benefit analysts, investors and regulators.

On a final note, XBRL’s language is flexible in which it supports all current aspects of reporting in different countries and industries. It can be adjusted to meet particular business requirements, even at the individual organisation level. SSM’s new XBRL platform will automate the data collection process, transform the submission of statutory reports by registered companies and allows data consumers to conduct company information analysis easily.

Though the concept of unfair dismissal or unlawful termination is not new in Malaysia, there have been numerous misconceptions about it. Though there has been increased awareness about the rights of employees in Malaysia, many still remain unclear. Below are several salient points on the matter.

Limitation period

From the time of dismissal, an employee has 60 days to file a complaint of unfair dismissal under Section 20 of the Industrial Relations Act 1967. As for those dismissed with notice, they are free to file the complaint any time during the notice period, but not later than 60 days from the expiry of his notice. If for any reason, the complaint is not filed within the limitation period, the complaint will be barred. If this happens, the complainant may look at other avenues in the civil courts. However, the damages and remedies awarded may differ.

Cases are not heard immediately at the Industrial Court

Anyone who wants to lodge a complaint on unfair dismissal must firstly do so at the Industrial Relations Department (IRD). Following this, the IRD will get both parties, the employer and employee to attend a reconciliation meeting with the hope of amicably settling the dispute. However, if there is no positive outcome, the IRD can then refer the matter to the Industrial Court. At times, it could take more than a year for a claim to be referred to the Industrial Court. This all depends on the number of backlog cases. Also, there is no guarantee the claim will be referred and those who are unhappy with the IRD’s decision can apply for judicial review at the High Court.

IRD meeting not a court hearing

The IRD officer does not have any power to decide on the merits of the complaint during the conciliation meeting. It must be remembered that the IRD meeting is not a court hearing and the IRD will not make any ruling or decision as to whether the dismissal is unfair. The purpose of the IRD meeting is to get parties to reach an amicable settlement. Section 54 of the Industrial Relations Act 1967 provides that no evidence shall be given of any conciliation meeting other than a written statement agreed to and signed by the parties. Parties should feel comfortable to discuss matters freely during the conciliation meeting.

A big part of forming a company is choosing a name. Why is this step so important? Because the name of the company is going to be a lasting one. It is going to be around for as long as your business is, and it is what your customers will associate and come to recognize when they hear the name of your business. A lot of thought and careful planning needs to go into the company name selection process.

Another important part of the company naming process is to conduct a company name search to determine whether your chosen name is already in use or too similar to an existing company name. If the name already exists, you will need to change it and if it is too similar to an already existing company, you may want to consider changing it too because you do not want to create confusion among your clients. There is also the risk that your company name may not get approved if a similar name already exists or is in use.

How to Conduct a Company Name Search

The company name search process would depend entirely on where your company is being set up. Different countries would have their own systems and processes in place with which company name searches are performed. In Malaysia, for example, the company name search process is done through the Companies Commission of Malaysia (SSM).

Should an investor or entrepreneur choose to set up a company in Malaysia for example, the company name search process through the SSM would go through the following process:

• The first step is to log on to the SSM’s official website, which is the http://www.ssm-einfo.my/
• Once logged on to the website, the user will be required to register as an e-account member with the SSM before they can proceed to the next step.
• The user will be required to fill out an e-registration form and select a username and password to proceed with the membership signup.
• Once registered as a member, the user can then begin the company name search process by entering the desired company name into the search options displayed on the SSM’s website.

Once your company name search is complete and your chosen company name does not appear in the search results, congratulations! That means your chosen company name is most likely available for use.

You can then go ahead and submit an application with the SSM to have that name registered and reserved for your use officially. The SSM will then review your submitted company name and if approved, your company name will be reserved for up to three months which gives you time to completed the entire company registration process and submit all the necessary documents accordingly.

Payroll fraud, as the name implies, is the theft of funds from a business via the payroll system. It is a form of asset misappropriation and one of the most common types of fraud in businesses. Precisely speaking, payroll fraud can be defined as the unauthorized altering of payroll where the person (an employee) committed the fraud could make financial gain.
 

What is Payroll Fraud?

In general, employees can commit payroll fraud in several ways.

1. Ghost Employees

One of the common ways behind the payroll fraud is the existence of ghost employee. Ghost employee is the fictitious identity created by the dishonest employee, recorded on the payroll system, but does not work for the business. The fraud happened when the salary is paid to the false employee and the dishonest employee will then collect the fund.
 
2. Timesheet Fraud

A timesheet fraud involves incorrect wage payment to the employees for the hours they work. The fraud happened when employees falsify records in order to get more wages. In some cases, dishonest employee will add extra hours to their timesheets, claiming for hours they did not work. There are also cases that companies overpay employees based on falsified timesheet submissions.  
 
3. False Expense Claims

Another common type of payroll fraud is false expense claim. It involves the submission of completely fake or unreal expenses for items (or events) which never happened. Other than this, it could also be the submission of duplicate claims and inflated expenses.
 

How to Identify and Eliminate Payroll Fraud in Malaysia

Though payroll fraud is unavoidable, it is preventable. The key idea here is to identify the fraud before it spirals out of control and eliminating the risk. Below are some preventive measurements in identifying and minimizing the occurrence of payroll fraud.
 
1. Schedule Regular Payroll Audits

Conduct regular payroll audits to review the company’s payroll records and identify any suspicious activity in the payroll system. The regular payroll audit will help to minimise the risk of fraud cases within the company.
 
2. Eliminate and Identify Ghost Employees

One way to identify ghost employee is to have periodic checks on the employee information to ensure that every employee indicated on the payroll system is real and working in the organisation.
 
3. Verify Employees’ Timesheets

Timesheet fraud happens especially in organisations that require tracking of employees’ working hours. Employees might falsify records, which could result in overpaying. One way to minimize timesheet fraud is to conduct regular timesheet audits to ensure the accuracy of the working hours as recorded in the timesheets.
 
4. Engage a Payroll Services Provider

Another effective way that worth mentioning is to engage a payroll service provider to ease the hassle of payroll as well as to prevent the fraudulence. Having to manual calculate and handle payroll can be a very taxing and tedious. At times, miscalculating or mistakes occurring while preparing the payroll may leave a negative impact on the business, let alone the risk of payroll fraud that may hurt the organisation. To hack this problem, outsourcing the payroll matters to a third party payroll services provider is one of the good solutions

How do you choose the type of business structure or entity that is best suited for your business? Well, for one thing, it would depend on the type or products or services that you intend to provide with your business. Other factors that would help to determine the business entity choice would be the kind of ownership structure preferred and what the current state of finances are (some business entity structures are more affordable than others).

There are several options of business entity structures to choose from, such as sole proprietorship, partnership, limited liability companies and private limited companies to name just a few. As an entrepreneur, what should you take into consideration when deciding the type of business entity you should choose?

What to Consider When Choosing a Business Entity

Below are some of the considerations an entrepreneur should take into account to help them select the right kind of business entity for optimum success:

• The Ability to Raise Capital – Capital is one of the most important factors of any business success. If a business is not raising capital, it isn’t making money. And if it isn’t making money, it is only a matter of time before it goes under. Analyse your business plan and if your plan does not already do so, analyse the strategy portion of your plan and what needs to be done to achieve your business targets. Having a clearer picture about your business goals and strategies will help you better decide on which type of business entity will be the best fit for you to achieve those targets.

• The Types of Taxes – Different business entity types would have different tax structure systems in place. For example, the tax on businesses which are partnerships, LLCs or sole proprietorships may not necessarily be the same amounts or percentages. Some structures even allow for exemptions depending on the type of business you run and where you run your business.

• The Risk Factor – With every business, there is risk involved. But a smart entrepreneur looks for ways to minimise risk, including selecting the right kind of business entity that will help achieve that goal. Selecting the wrong business structure could result in your business being more of a liability than a profit maker, so take your time, scrutinise every aspect before making a decision.

• The Liability Involved – Some business entities offer more personal liability protection for the owner than others. For example, certain structures like corporations and LLCs separate ownership and management, thereby protecting the business owner from any potential suits brought against the business. Other structures, such as sole proprietorships for instance, leave the owner exposed and vulnerable to being held personally responsible for all business and managerial decisions.

At the end of the day, it also comes down to the personal preference of the business owner in question. After taking into account all the different scenarios and possible risk factors involved, the entrepreneur would have to make the choice that is going to bring about the most benefit not just for themselves, but for the overall business involved.

Malaysia has always had the benefit of a strategic location on its side when it comes to doing business in the international front. Strategically positioned right in the trading path in the middle of the Eastern and Western world, Malaysia is known as one of the important shipping routes in the world.

Doing business in Malaysia has also been of keen interest to many an investor because of the rich natural resources that the country has to offer. Malaysia for example, is the largest producers and exporters of tin, rubber and palm oil, all of which are lucrative trades that have bolstered the country’s economic status.

Malaysia is ranked as the 23^rd in the world for the ease of doing business by the World Bank Group, although it is continually recognised for its business-friendly policy and competitive economy. Malaysia’s excellent infrastructure, transport connectivity, well-developed financial sector make it a very cost-effective gateway into doing business in Malaysia and the Asian markets that surround the country as well.

Doing Business in Malaysia – How to Set Up Your Own Company

Establishing a company for the purpose of doing business in Malaysia can be accomplished with the following steps:

• Reserve a name for your company with the Companies Commission of Malaysia, known locally as the SSM. The SSM is the Suruhanjaya Syarikat Malaysia, which is the local Malay name equivalent of the Companies Commission of Malaysia.
• The company secretary would need to prepare the required documents for incorporation and provide a statutory declaration of compliance, in accordance with the Companies Act 1965.
• The required documents would need to be filed with the Companies Commission of Malaysia to obtain the incorporation and post-incorporation package which include the company seal, share certificates and statutory books.
• Opening a bank account for the business can be done at any of the local banks.
• Registration for the goods and services tax needs to be done at the Royal Malaysian Customs.
• Registration for the income tax needs to be done at the Inland Revenue Board of Malaysia, known locally as the LHDN.
• Employees would need to be registered for the Employees Provident Fund.
• Employers would also need to be registered for social security at the Social Security Organisation, known locally as SOCSO-PERKESO.

Entering into the local market when it comes to doing business in Malaysia is best done by working with a local business counterpart if you have one. A local business counterpart would best understand the needs and inner workings of the market, and they would know how to handle matters related to customs clearance, wholesalers, retailers and more.

The safest way to establish a company to do business in Malaysia would be to enlist the help of a professional services agency to handle the paperwork and navigate the bureaucracy with minimal hassle.

Accounting Firms & The Services They Provide

Accounting is a necessary part of the business process and many business owners and entrepreneurs need the services of a good accounting firm in their fold to use them to their best business advantage.

Accounting firms are essential to business owners because without, for example, a system of internal controls which are also known as audit systems, it would be difficult for a company to evaluate the effectiveness of its internal controls. And monitoring this effectiveness if a company is determined on achieving its business objectives, acquiring reliable financial reports on its operations, prevent fraud and misappropriation of the business assets as well as minimise the cost of the business capital.

Running the business aspect of the business is challenging enough as it is, sometimes demanding long hours to be put in. There is just not enough time for an effective businessman to run the day to day operations and manage the booking side of the business as diligently as they should, and that is where the services of accounting firms come in handy.

Accounting Firms and The Services They Offer

The services offered by accounting firms would differ depending on the size, experience and specialisation of the firm in question.

In general, an entrepreneur can expect accounting firms to cover the following services:

• Accounting – High level accounting services are usually offered by CPAs employed by accounting firms. The range of services include assisting clients with budget creation, perfecting financial statements as well as preparing local, state and federal tax returns. Audit and business valuation services are also included under this branch, with some firms even offering forensic accounting services for companies who are faced with fraud issues.
• Bookkeeping – Services that fall under the bookkeeping category include accounts payable and receivable, billing, payroll, monthly and quarterly taxes, general ledger entries, bank reconciliations and monthly trial balances.
• Tax Filing and Planning – Accounting firms assist businesses in figuring out tax codes to ensure that the businesses financial reporting practices are in compliance with the current regulations, determine the company’s tax liability and ensure that the businesses meet the necessary filing requirements and deadlines. Accounting firms come in handy in this aspect to help businesses prepare the federal, state and local tax returns, and how to reduce the taxes to be paid.
• Consulting – Accounting firms also provide consultancy services for clients who need advice on the financial strategies they may need to take for their business. The subjects that consultancy would cover include advice or suggestions on how the client can lower their tax burden, review or suggest updates on business plans and in some cases, how to manage financial investments.

When selecting an accounting firm, consider what the needs of the business are and what kind of accounting servicesare the most important to the smooth running of the business. That would help business owners narrow down the kind of accounting firm they would prefer to engage with.