The Yearly Maintenance Costs and Obligations of Running a SDN BHD


5/7/20242 min read

man in green safety vest standing under white structure
man in green safety vest standing under white structure

Yearly Maintenance Costs of Running a SDN BHD

Running a private limited company, also known as a Sendirian Berhad (SDN BHD) in Malaysia, comes with certain costs and obligations that business owners should be aware of. These yearly maintenance costs are essential for the smooth functioning and compliance of the company. Let's delve into some of the key expenses and obligations associated with running a SDN BHD, and the following professionals to be dealt with.

  • Company Secretary

  • Tax Agent

  • Auditor (unless your company qualified for Audit Exemption)

  • Accountant

1. Annual Return Filing

One of the primary obligations of directors is to ensure the timely filing of the company's annual return with the Companies Commission of Malaysia (SSM). This filing includes information such as the company's financial statements, shareholders' details, and changes in the company's structure. The cost of filing the annual return can vary depending on the company's authorized capital and the type of services engaged for this purpose. It is advisable to seek professional assistance to ensure accurate and timely filing.

2. Audit and Accounting Fees

SDN BHDs are required to maintain proper accounting records and have their financial statements audited annually. Engaging a professional auditor and accountant to fulfill these obligations can be a significant expense for the company. The fees charged by auditors and accountants may vary based on factors such as the complexity of the company's operations, the volume of transactions, and the size of the company.

3. Tax Compliance

Every SDN BHD is obligated to comply with the tax laws of Malaysia. This includes filing annual tax returns and settling any tax liabilities within the stipulated deadlines. Hiring a tax consultant or engaging the services of a tax firm can help ensure accurate tax compliance and minimize the risk of penalties or legal consequences. The cost of tax compliance will depend on the complexity of the company's tax affairs and the services obtained.

4. Business Licenses and Permits

Depending on the nature of the business, SDN BHDs may require specific licenses and permits to operate legally. These licenses and permits need to be renewed periodically, and the associated costs should be factored into the yearly maintenance expenses. It is crucial to stay updated with the regulatory requirements and ensure timely renewal to avoid any disruptions to the business operations.

Total Cost

In the range of RM3,000 to RM4,000 easily to keep a SDN BHD a year, as minimum, and will be higher if the turnover is high. However for NON-COMPLIANCE case, the cost is much higher as fine and penalty will come from LHDN and SSM.

Closing a SDN BHD

While starting a SDN BHD involves costs, closing down a company also incurs expenses. The process of winding up a SDN BHD involves various legal and administrative procedures, which may include the following costs: - Professional fees for engaging a company secretary and a lawyer to handle the closure process. - Settling any outstanding debts or liabilities of the company. - Filing the necessary documents with the SSM and other relevant authorities. - Cancelling licenses and permits, if applicable. It is essential to plan and allocate sufficient funds for the closure process to ensure a smooth and legally compliant winding up of the company. In conclusion, running a SDN BHD involves yearly maintenance costs and obligations that business owners should be prepared for. It is advisable to seek professional guidance to ensure compliance with the legal and regulatory requirements, minimize risks, and manage costs effectively.