5 real stories of starting a business in the midst of the pandemic
The second half of the year 2020 saw more businesses and companies started compared to previous years despite the pandemic that caused a shrink of 5.6% in overall Gross Domestic Product (GDP). While we might perceive it as a good sign of people braving through this hard time to start their entrepreneurship journey, many might have done this due to the fact that they have no other options to earn a living. It is only fair if we hear the stories of entrepreneurs who have actually started a business during these difficult times.
While the pandemic may have closed the door on his tech office of an international mobile content service provider, Suthan Mookaiah has opened up another door to a pandemic proof business - BeliGas Malaysia, a gas delivery service that allows you to order cooking gas online.
He started the business with zero experience in the operation of a gas delivery business and slowly improvised along the way. From selling 2 barrels of gas each day for the first week of operation, BeliGas Malaysia has since managed to bring in their first RM1 million in revenue within 6 months.
Read more about Suthan's journey in starting his gas delivery service during the pandemic here.
Inspiration for a business often starts through passion. Ethan Wong decided to look into his interest in making tempeh back in 2018 when his sourcing business was put to a halt due to the pandemic. He spent 6 months perfecting his tempeh chips recipe and creating the TrulyGourmet brand.
To make sure that this uncommon snack is palatable to Malaysian tastebuds, Ethan sent samples of tempeh chips throughout Malaysia before rolling out his business. The result? He has sold over 1.7k packets within the first 2 months by actively sharing his journey in starting this business on Facebook.
Read more about Ethan's journey in starting his tempeh chips business during the pandemic here.
When the supply is low and the demand is high, there lies a good business opportunity. Ben Rayappan, an event planner, did a market research on which business to run before reaching a decision for a plantation of cili bara, one of the hottest and most difficult chili species to cultivate in Malaysia.
Knowing how Malaysians crave hot and spicy dishes, Ben began his chilli farming with 156 plants and has expanded his farm to 1,200 chilli plants. The farm allows him to sell 240 - 350kg of chillies a month to wholesale markets and individual buyers from Negeri Sembilan, Klang Valley, and Ipoh.
Read more about Ben's journey in starting this chilli plantation business during the pandemic here.
The lockdown may have restricted the movement of people but online shopping makes it possible for them to get the food they used to enjoy from dining-in. Aaron Yap partnered up with Yee Hoi Coffee, a traditional coffee roastery founded in Ipoh, to bring the traditional kopitiam coffee into people's home.
With zero online presence since the business was founded, Aaron's business gradually gained traction by running Facebook Ads and joining various sales organised by several eCommerce platforms. The sales volume was 10 - 20 orders a month initially and it gradually grew to 30 - 50 orders a month.
Read more about Aaron's journey in moving this traditional coffee roastery business online during the pandemic here.
For cabin crews, the closing of international borders means losing their bread and butter. Gary Faizol Abdullah took the matters into his own hands by starting GalleyG from his home kitchen to sell Indonesian sambal as a way of earning a living for the time being, until the airline business goes back to normal again.
Operating a home kitchen is a tedious business. Gary has to handle everything on his own, from sourcing raw ingredients to dispatching the bottled goods, when he first got started. From 20 sales per week, his sambal business has grown to several hundreds of orders per month after partnering up with FoodPanda.
Read more about Gary's journey in starting his sambal business during the pandemic here.
The 5 real stories of starting a business in the midst of the pandemic series were written to tell the stories of entrepreneurs who have braved through these difficult times and successfully started a business. May the articles inspire and motivate you to push through these difficult times and achieve your goals in your entrepreneurship journey.
The checklist of annual and monthly compliance for Sdn Bhd
Running your business under a Sdn Bhd business entity not only separates your personal liabilities from the business liabilities, but also opens up more opportunities to grow your business. Nonetheless, the governance of a Sdn Bhd requires compliance towards regulations from various governmental authorities to ensure that you are operating your business legally in Malaysia. Understanding the annual and monthly compliance for your Sdn Bhd helps you adhere to the regular compliance activities accordingly.
After your company is incorporated
Right after your Sdn Bhd is incorporated, there are several compliance activities to do in order to legally operate your business.
Business licence application
When to get it done: As soon as possible
Getting your company incorporated is just the first step in starting your business. Depending on the nature of your business, sometimes a business licence is required to run your business. There are generally 2 types of licensing, Federal Licensing issued by ministries or governmental departments for regulated industries, and State Licensing issued by local authorities for regulated activities such as physical advertising and setting up a business premise, which varies according to the regulations of each State. Some examples of regulated industries are the financial sector, oil and gas sector, manufacturing sector, healthcare sector, and education sector.
You can find out more information on the business licences you need through the MalaysiaBiz portal.
Registration with the Inland Revenue Board Of Malaysia (LHDN)
When to get it done: As soon as possible
Similar to a personal income tax, your company is a separate legal entity that has to pay corporate taxes based on its annual chargeable income. LHDN will normally inform your company secretary regarding your corporate tax number.
However, in some rare cases where your company is not automatically registered, you can get your corporate tax number by registering through the e-Daftar portal.
Registration with Employees Provident Fund (EPF) and Social Security Organization (SOCSO)
When to get it done: Within 7 days (for EPF) and 30 days (for SOCSO) upon hiring the first employee
EPF is a retirement saving scheme for employees who are liable to contribute EPF in Malaysia. The saving is comprised of the employee’s and employer’s monthly contributions and yearly dividends earned. On the other hand, SOCSO manages 2 schemes - Employment Injury Scheme that protects an employee against occupational accident or disease, and the Invalidity Scheme that insures an employee who is unable to work due to incurable or unlikely to be cured condition or death.
Before you can register your employees under EPF and SOCSO, you have to register your company as an employer first at any EPF counter. As for SOCSO, you can register online. You can do this yourself or engage a payroll service provider to do it on your behalf by providing them with an authorised letter.
Financial Year End (FYE) lodgement
When to get it done: As soon as possible
The Financial Year End of a company is the date when the company closes its financial accounts. It is usually the last day of a particular month you have decided for your business.
You should inform your company secretary of the FYE decided for your company as early as possible.
Auditor appointment
When to get it done: Within 30 days after your first FYE
Unlike accountants and lawyers, an auditor has to be appointed by providing consent to act before they can provide auditing services to the company. They are in charge of preparing audited financial statements of your company. This can be done once and the same auditor will be automatically appointed every year. If your company is dormant, has zero revenue, and is threshold-qualified, you don't have to appoint an auditor for your company.
Your company secretary will submit the information of the auditor appointed in Annual Returns.
Annual compliance for Sdn Bhd
These are the compliance activities to be done annually for your company.
Business licence renewal
When to get it done: Depends; typically ranges from every year to every few years
Depending on the governmental authorities that regulate the specific licence, business licences usually require renewal annually or every few years. It is recommended to keep this in mind when you first apply for the licence to make sure your business licence is always up-to-date.
Submission of tax estimates
When to get it done: Within 3 months of operation and 30 days before the start of each assessment year
The estimated tax payable will be calculated based on the estimated annual income of your business. Your company will make monthly instalments based on this estimated tax payable.
You can submit this tax estimates on your own or engage an accountant or tax agent. The tax estimates can be revised if needed. It is recommended to seek advice from an accountant or tax agent on this matter.
Submission of statements regarding PCB
When to get it done: By 31st March of the following year
Your company as an employer should submit Form E, the statement of remuneration paid to employees and PCB deducted during the year, to LHDN. Besides, Form EA/(C.P. 8A), the statement of remuneration paid to employees during the year must be issued to the employees by the last day of February of the following year to allow employees to prepare their tax return.
You can sort this out on your own or engage an accountant or payroll service provider.
Financial Statements with Directors' Report lodgement
When to get it done: To be circulated to shareholders within 6 months after the FYE and lodged within 30 days after the circulation
Financial statements of the year are usually prepared by the accountants before being audited by your appointed auditor. On the other hand, the auditor will prepare an auditor’s report while the directors will prepare the director’s report which explains information on the directors, main activities of the company, shares, dividends, business reviews, etc. These documents are then compiled and signed by the commissioner for oaths before being passed to the company secretary for circulation to shareholders and the auditor.
Once it is approved by the board, your company secretary will lodge the financial statements with the directors' report attached to the SSM.
Annual return lodgement
When to get it done: Within 30 days from the anniversary of the company incorporation date
The annual return is a summary of your company with information such as business nature, registered address, directors and shareholders, etc. This information still has to be lodged to confirm that there were no changes to your business, even if there were no changes made to this information after a year of operating the company.
Your company secretary will prepare the annual return on the anniversary of the company incorporation date and lodge the documents to the SSM.
Submission of tax return
When to get it done: Within 7 months after the assessment year ends
The estimated tax payable and the actual tax payable might be different. After the assessment year ends, if the actual tax liability is greater than the taxes paid based on estimation, the balance of tax payable has to be paid. Vice versa, you can apply for a refund if the actual tax liability is lower than the taxes paid. This can be done through the submission of tax return through the e-filling portal.
You can sort this out on your own or engage an accountant or tax agent.
Monthly compliance for Sdn Bhd
These are the compliance activities to be done monthly for your company.
Corporate tax payment
When to get it done: Starting from the 6th month of the assessment year by the 15th of each month
Based on the estimated tax payable, you will pay corporate tax through monthly instalments. You can do this on your own or engage with an accountant or tax agent.
EPF, SOCSO, and EIS payment
When to get it done: By the 15th of the month for the salary issued for the previous month
Besides registering and regularly updating the information of your employees with EPF and SOCSO, your company as an employer needs to collect the EPF, SOCSO, and EIS contributions from both employer's and employees' shares and pay it to EPF and SOCSO respectively.
You can do this on your own through various online and offline channels of EPF and SOCSO or engage a payroll service provider for their services.
Employees' payroll tax (PCB) payment
When to get it done: By the 15th of each month for the remuneration issued for the previous month
More commonly known as PCB (potongan cukai bulanan), your company as an employer needs to retain a percentage of the employees’ remuneration including salary, commission, bonus, incentives, etc. to be paid as Monthly Tax Deduction (MTD) to LHDN on behalf of employees who are taxable as part of the employer’s responsibility. The calculation of PCB can be done based on the MTD schedule or through the Computerised Calculation Method on the e-CP39 portal.
You can do this on your own or engage with an accountant or tax agent.
The complete checklist of annual and monthly compliance for Sdn Bhd
Here's a checklist of the annual and monthly compliance summarised from the article for your reference. It is recommended to talk to your company secretary for more information on statutory compliance required for your business.
Besides the compliance activities listed above which should generally be followed by all Sdn Bhd in Malaysia, there are other compliances such as:
If you hire foreign employees, visa renewal is required annually or every few years according to visa requirements.
If your annual sale or service revenue is more than RM500,000 in 12 months, you have to register your company for SST, submit the tax return and pay the tax every 2 months.
If you are running a F&B business, all employees who handle food need to get vaccination(s) which should be boosted every few years.
The list goes on and varies according to the industry of your business. If you are unsure of the compliance requirements for your business, you should seek advice from your company secretary, accountant, tax agent, and other professionals, or contact relevant governmental authorities for more information.
Form 9? S17? - Know the statutory forms of your Sdn Bhd
Whether you are opening a business bank account or applying for a payment gateway service for your e-commerce website, you will be required to provide some statutory documents of your company. The required documents are usually given a 'code word' - F9, F13, F24, F32A, etc. that might not make sense to the general public. In fact, if your company has been incorporated after the year 2016, these document names that start with the letter 'F' are not relevant to your company as per the updates in the Companies Act 2016.
The SSM has published a detailed explanation in the introduction of the Companies Act 2016. You can check out the clarifications on the old and new statutory documents which are listed in Schedule A, B, and C together with attached sample documents. Here's a summary of some essential statutory documents of your company that you should know.
Application for Registration (Superform) - S14
Previously known as Form 24, Form 44, and Form 49.
The Application for Registration, more commonly known as the Superform, is issued right after your company has been incorporated. This document states all basic information of the company such as:
Company name and type.
Business nature and description.
Particulars of directors and shareholders.
Information of the person who submitted the incorporation application.
Please bear in mind that since this document is only issued once, the information stated will not be updated; hence, you might need to provide additional supporting documents if there are changes in the information since the date of incorporation.
If you need the latest information on the company, it might be best to obtain the company profile from the MyDATA or e-Info portal.
Notice of Registration - S15
Did not exist previously.
Upon the approval of your company incorporation, the SSM will inform the person who submitted the company incorporation application (who is also known as the 'lodger'), whether it is yourself or your company secretary, through an email. This email is known as the Notice of Registration.
The Notice of Registration is the official notice from the SSM on successful company incorporation.
Certificate of Incorporation - S17
Previously known as Form 9.
The Certificate of Incorporation will not be issued automatically after your company is incorporated, the SSM will email you the Notice of Registration (S15) instead. However, this document is still a requirement for many organisations such as banks and financial service providers as proof of incorporation.
You can purchase this document through the MyDATA or e-Info portal.
Declaration by Person before Appointment as Director - S201
Previously known as Form 48A.
The Declaration by Person before Appointment as Director is signed individually by all directors before the company incorporation application is submitted to declare that they have met the requirements to act as director and have given consent to the appointment.
Notification of Appointment of First Company Secretary - S58&236(2)
Was previously included in Form 49.
Notification of Appointment of First Company Secretary is only submitted once when the first company secretary is appointed within 30 days of the company incorporation. It is to confirm the appointment of the first company secretary for your company.
Lodgement of Constitution - S32
Previously known as Memorandum and Articles of Association (M&A).
The adoption of a constitution is not mandatory for Sdn Bhd since the provisions of the Companies Act 2016 and the Third Schedule can be adopted in place of the constitution. Despite this, there are still organisations that request this document to ensure that the company's, shareholders', and directors' power are documented. In such cases, you will need to explain to them that your company does not adopt a constitution.
Even though the adoption of a constitution is no longer mandatory for private limited companies, you are still advised to adopt one under certain situations to grant your company more flexibility in terms of decision making and governance.
Notification of Change in the Register of Members - S51
Was previously part of Form 24.
S51 is a document that shows the changes to the shareholding of the company. It is submitted by the company secretary whenever there are changes towards the shareholding of the company. As such, there can be many S51 documents throughout the lifespan of your company.
However, if there are no changes in shareholders since the company incorporation, your company will not have this document. You can provide the Superform to show the shareholders information. On the other hand, if there are changes in shareholders, this document should be provided alongside the Superform even though only the Superform is requested.
Return for Allotment of Shares - S78
Previously known as Form 24.
S78 is issued once new shares are allotted. It states the information of the new shareholder, the type and class of share issued, and the number of shares issued with its price. After this document is submitted, the company secretary will submit the Notification of change in the Register of Members (S51).
Notification of Change in the Register of Directors, Managers, and Secretaries - S58
Previously known as Form 49.
Each time there are changes in managers, directors or company secretaries of the company, S58 should be submitted to the SSM. Similar to the Notification of Change in the Register of Members, your company can have many S58 documents throughout its lifespan; hence, they should be provided alongside the Superform even though only the Superform is requested.
Instrument of Transfer of Shares - S105
Previously known as Form 32A.
This is an agreement between the transferor and transferee regarding the transfer of shares in the company. It lays out the number of shares, price of the shares, and other details. Once signed, this document is stamped at the LHDN.
Once the shares have been transferred, the company secretary will submit the Notification of Change in the Register of Members (S51) to update the latest shareholding of the company.
Sample documents attached in this article have been taken from the SSM website as well as the MyDATA portal. Except for the Notification of Registration and Certificate of Incorporation that are issued by the SSM, other statutory documents should be prepared by the company secretary and submitted to the SSM. Once the SSM has accepted and approved the documents, they will be uploaded onto the MyDATA and e-Info portals. So, you can either purchase the statutory documents from those portals in the form of digitally certified true copies (CTCs) or request for them to be provided and certified by your company secretary. Since some of the statutory documents might require other supportive documents to be valid, it is best to inform your company secretary of the reasons for requesting the documents so that they can provide the complete set of statutory documents that you need.
11 rules for naming your company (Sdn Bhd) in Malaysia
Unlike registering for a website domain name where there are fewer restrictions, so as long as the name is available on the domain registrars, you should follow the company naming guidelines as published by the Companies Commissions of Malaysia (SSM) when naming your company to increase the likelihood of company name approval during your company incorporation process. Even if your company name was approved, the SSM has the right to direct your company to change its name if they believe that the company name should not have been registered in the first place. These are the 10 rules that you should bear in mind when deciding on a name for your company.
1. The company name must not already exist
This is one of the first things the SSM officers assess when evaluating your company name — whether the company name already exists or has been reserved. Besides engaging with a company secretary to do the name search for you, another easy way is to search for your desired company names on the MYDATA portal or the SSM e-Info portal. If the company name has been used by an existing business entity, it will show up on the list.
2. The company name must not be identical to the company name of another existing business entity
While it is clear that no 2 business entities should have the same name, an identical name should be avoided as well, especially if the other company has the same business nature as yours. Some of the criteria the SSM looks at in determining whether a company name is identical to another are as follows:
With or without the word 'The' as the first word of the company name. For example, The ABC Sdn Bhd is considered identical to ABC Sdn Bhd.
Plural version of the company name. For example, Apple Sdn Bhd is considered identical to Apples Sdn Bhd.
The spacing between letters and punctuation marks. All single letters in the company name will be consolidated into 1 word. For example, A-B C Sdn Bhd is considered identical to A B C Sdn Bhd and ABC Sdn Bhd.
The symbol '&' is considered to have the same meaning as the word 'and'. For example, A&B Sdn Bhd is considered identical to A and B Sdn Bhd.
Synonyms. For example, ABC Development will be considered the same as ABC Building and ABC Renovation.
Stem words are equivalent to their root word. For example, ABC Development and ABC Developing are equivalent to ABC Develop.
Direct translation. For example, Merah Biru is equivalent to Red Blue.
3. The company name must not contain words that have the same meaning as the word 'company'.
As the term 'Sdn Bhd' will be automatically added to the back of your company name, words that have the same meaning as the word 'company' cannot be used in your company name. Here are some examples:
Sendirian / Sdn
Company
And company
Corporation
Co
4. The company name can be in English, Bahasa, or even foreign languages
It is recommended to not use single words that are too general such as 'Technology' and 'Computer'. You can use words from different languages in your company name. If the company name contains foreign languages, you should explain the meaning of such words accordingly i.e. how it is related to your business. Besides that, you should provide a link to an online dictionary that explains the meaning of the words to support your application. Similarly, an explanation should be given for made-up names that do not exist in the dictionary. Here are some examples of name explanation:
ABC stands for Apple Banana Collections for a business selling fruits.
ABC is made of 2 words - Abs as in the abdomen of a human body while C represents Vitamin C. The business is selling supplements for bodybuilders.
5. The company name can consist of the names of directors
The names of directors as stated in the company incorporation form can be used in your company name. If the names of other individuals related to the directors are to be used, proof of relationship must be given together with a consent letter.
6. The company name can include the usage of certain symbols
Symbols can be used if they are used in a grammatically correct way. These are some symbols that are allowed to be used in the company name.
And & For example, A & B Sdn Bhd.
Full stop . For example, A. B. Sdn Bhd.
Hyphen - For example, A-B Sdn Bhd.
Apostrophe ' For example, A' B Sdn Bhd.
7. The company name must not be an acronym that can be confusing
While the usage of acronyms are allowed in your company name if the explanation of the acronyms is provided, acronyms that can be confused with names that are associated with the following should be avoided:
Names of the institutions of higher learning. For example - UiTM, UTM, UM, UKM, UPM, UUM, USM, UIA, UNIMAS, UMS, UIAM, UPSI, UMT, UMP, UTEM, UNIMAP, UTHM, etc.
Names of the federal or state government agencies and Government Owned Companies (GLC). For example - SSM, CCM, JKR, JPA, JPM, BNM, KPDNKK, SEDC, PKEN, SIRIM, TNB, PNB, FELDA, FELCRA, PETRONAS, SKM, MYCC, MIDA, KWSP, LHDN, PERKESO, MARDI, RISDA, etc.
8. The company name must not contain obscene words
Words that resemble elements of any religion, are considered offensive to the public, and are blasphemous are not allowed to be used in your company name.
9. The company name must not contain gazette words
Certain words are gazetted and cannot be used unless the letter of authorization is obtained from relevant authorities or ministries. These are some categories of gazette words:
Words suggesting a connection with members of the Royal family or Royal patronage. For example - Royal, King, Queen, Prince, Princess, Crown, Regent, Imperial, etc.
Words suggesting a connection with a federal or state governmental department, governmental agency or local authority. For example - Federal, State, National, etc.
Words suggesting a connection with a foreign government or with an international organization. For example - ASEAN, UNESCO, NATO, EEC, OPEC, etc.
10. The company name must not contain controlled words that are limited due to national and public interest
There are controlled words that should not be used for the sake of national and public interest. These are some examples of controlled words:
Famous established names that are registered under the Trade Mark Registration Act. For example - Astro, DIGI, Berjaya, HICOM, Petronas, Telekom, etc.
Words suggesting a connection with gambling activities, drinking, or smoking. For example - Sweepstake Lottery, Liquor, Vape, etc.
Words suggesting a connection with governmental slogans. For example - Vision 2020, Malaysia Boleh, 1Malaysia, etc.
11. The company name must not contain words that suggest connections with activities regulated by laws, governmental agencies, and professional bodies
Words that suggest connections with regulated activities under various laws in Malaysia are prohibited in your company name. However, you may obtain written approval from the relevant governmental agencies and professional bodies for the consideration of the SSM. These are some laws and regulations with examples of word use:
Banking And Financial Institutions Act 1989. For example - bank, finance, money broker”, financial, leasing, credit, etc.
Securities Industry Act 1983. For example - stock exchange, stock market, securities trading market, etc.
Futures Trading Industry Act 1993. For example - futures exchange, futures broker, trading adviser, etc.
Insurance Act 1963. For example - insurance, assurance, underwriter, etc.
Money-Changing Act 1998. For example - money changer, foreign exchange, etc.
Valuers, Appraisers And Estate Agents Act 1981. For example - estate agent, house agent, property agent, house broker, etc.
Takaful Act 1984. For example - takaful, etc.
Accountant Act 1967. For example - taxation, tax, accounting, auditor, tax consultant, etc.
Medicine (Advertisement and Sale) Act 1956. For example - private clinic, private medical laboratory, alternative medicines, traditional herbs, tabib, hair loss, homeopathy, etc.
Any other laws as being notified to the Registrar of Companies from time to time.
Even if your company name consists of words that are easy to understand, it is best to explain the meaning behind the name and how it relates to your business. Bear in mind that while you can follow the rules as much as you can to increase the chance of approval, the SSM still holds the ultimate right to approve or reject your company name. A company name is not equivalent to a brand name. Hence, under the same company, you can run businesses under several brands of similar business nature.
When the sky is out of bounds for the time being
