First-Year Compliance Checklist for a New Sdn Bhd in Malaysia

By Axecta Management Services, Kuala Lumpur · Last verified: 29 October 2026

Why the first year matters more than the second

A new Sdn Bhd starts owing duties on the day the Certificate of Incorporation is issued, even if it has not sold anything yet. Directors who treat the first year as a “quiet period” usually discover three things at the same time: a missed secretary appointment, accounting records that are months behind, and a tax estimate that should already have been submitted. None of these is hard to fix on day one, and all of them are expensive to fix in month ten.

This checklist follows the order in which duties actually arrive. It uses the Companies Act 2016 (Act 777) and the official SSM, LHDN and Customs pages, and it separates what applies to every company from what depends on your business. If you have just incorporated, read it together with what to do after incorporating a Sdn Bhd.

The master checklist

Step 1: Appoint the company secretary (first 30 days)

Section 235 of the Companies Act requires every company to have at least one secretary. The secretary must be a natural person aged 18 or above, a citizen or permanent resident who ordinarily resides in Malaysia, and either a member of a body listed in the Fourth Schedule or a person licensed by SSM. SSM guidance expects the appointment within 30 days of incorporation.

Practical points:

• The secretary cannot be a nominee name that nobody has met. Choose someone who will actually keep the registers and lodge filings.
• A secretary who lodges the annual return and accounts through MBRS must hold an active practising certificate under section 241, as stated on the SSM MBRS page.
• Compare the cost and scope before signing. See company secretary cost and what a company secretary does.

Step 2: Set up the statutory registers and the board paper trail

The Act requires registers to be kept, for example the register of members (section 50) and a register of each director’s interests in shares (section 59). Changes in director, manager or secretary particulars must be notified to the Registrar within 14 days (section 58). In the first year, also:

1. Minute the first board meeting: adopt the bank mandate, confirm the financial year-end, appoint the auditor if one is needed, and record who signs.
2. Issue share certificates or record allotments if shares were issued after incorporation.
3. File the constitution and registers in a place the secretary can access.
4. Record any director interests in contracts, because section 221 requires disclosure. See directors’ conflict of interest.

Step 3: Open the bank account and keep money separate

Open the corporate account before the first customer payment arrives, not after. Mixed personal and company money is the single most common cause of a messy first-year audit trail. The process and documents are in our bank account guide, and the discipline is in separating personal and business finances.

Step 4: Keep proper accounting records from the first transaction

Section 245 requires a company, its directors and managers to keep accounting and other records that sufficiently explain the transactions and financial position, in a way that can be audited. Entries must be made within sixty days of the completion of the transaction, the records must be retained for seven years, and they must be kept at the registered office or another place the directors decide. Section 252 puts the duty to prepare financial statements on the directors.

A workable first-year routine:

• Save every invoice, receipt and bank statement monthly.
• Reconcile the bank account monthly.
• Record director advances and company payments made personally in a separate ledger.
• Close the books monthly rather than once a year. See monthly bookkeeping vs annual accounts.

Step 5: Register the tax file and submit CP204

LHDN’s page states that a new company with a first basis period of at least six months must submit its e-CP204 within three months from the date operations begin. Existing companies submit 30 days before the start of the basis period, and that rule applies from the second year of assessment.

Key mechanics, from the same LHDN estimated tax page:

• New companies pay equal monthly instalments starting in the 6th month of the basis period (section 107C(6)). Any fractional remainder is added to the final instalment.
• The estimate may be revised in the 6th, 9th or 11th month using e-CP204A (section 107C(7)).
• If no estimate is submitted, the Director General can issue a CP205 and set the estimate, and prosecution can follow, with a fine stated on the page of not less than RM200 and not more than RM20,000 and/or imprisonment up to six months.

Worked example (illustrative figures)

Assume a company starts trading on 1 March with a 12-month basis period and estimates tax of RM30,000. Because it is a new company, instalments run from the 6th to the 12th month: seven instalments. RM30,000 divided by seven is RM4,285.71 a month; LHDN adds the fractional remainder to the final instalment. The money must be in the account on the 15th of each of those months, which is a cash flow event your forecast should show. See cash flow problems in a new Sdn Bhd and our CP204 explainer.

Step 6: Plan the year-end, the accounts and Form C

Your first financial year-end is whatever was recorded with SSM, and the first set of accounts is normally due to be circulated within six months of that date. Private companies lodge them with SSM within 30 days after circulation. The company’s income tax return is due within seven months after the close of the accounting period, per the LHDN company page.

A practical timeline for a 31 December year-end:

Because the same figures feed both SSM and LHDN, finish the accounts first and file the tax return from them.

Step 7: Annual return

Section 68(1) requires the annual return within 30 days of the anniversary of the incorporation date, and section 68(2) says it is not required in the calendar year of incorporation. So a company incorporated in March 2026 has no annual return duty for 2026; its first one falls around the March 2027 anniversary. Late lodgement is an offence. See failing to submit the annual return.

Step 8: Check the regimes that depend on your business

What this means for different owners

• Sdn Bhd with a foreign shareholder: you still need a director ordinarily resident in Malaysia (section 196) and a Malaysian-resident secretary. Foreign ownership can also affect the SME tax rate test; see Malaysia corporate tax rate.
• Dormant company: the duties above do not pause. Records, registers, the annual return and tax filings still apply, as LHDN notes dormant companies must file a return too.
• Sole proprietor thinking of converting: a sole proprietorship has none of the company-law duties but files Form B personally. See sole proprietorship vs Sdn Bhd.

Common first-year mistakes

1. Waiting for the first invoice before appointing the secretary.
2. Assuming no activity means no CP204 or no return.
3. Leaving bookkeeping until year-end, then missing the 60-day entry rule.
4. Paying company bills from a personal card and not recording it.
5. Forgetting that the secretary lodging through MBRS needs a valid section 241 practising certificate.
6. Ignoring SST or e-invoicing until a customer asks.

See the wider compliance mistakes hub and common Sdn Bhd compliance mistakes.

How Axecta helps

Axecta’s compliance review turns the table above into a dated calendar for your company, with an owner against each task. We can run the secretarial, accounting and tax steps together so the figures on your SSM accounts and Form C agree. If you only want a check, we review what has been done and list what is missing.

Next steps

1. Write down your incorporation date, financial year-end and date operations began.
2. Put the secretary, CP204, accounts, annual return and Form C dates in a shared calendar.
3. Confirm e-invoicing, SST and payroll applicability in writing.
4. Review the calendar every quarter.

Frequently asked questions