A dormant company in Malaysia still has yearly SSM and LHDN obligations, even when it does no business. It must lodge its annual return, prepare, circulate and lodge financial statements, file Form C every year (declaring nil income if applicable), keep records for 7 years and keep a company secretary. It can generally elect audit exemption.
- Dormant means not trading, not closed: the company still exists and keeps its SSM and LHDN obligations.
- Lodge the annual return within 30 days of each incorporation anniversary and file Form C every year, even with nil income.
- Financial statements are still prepared, circulated within 6 months of year end, then lodged with SSM within 30 days.
- A company dormant since incorporation, or in the current and immediate past financial year, can generally elect audit exemption.
- Record even small movements such as bank charges and director-paid fees, and tidy all filings before restarting or closing.
What is a dormant company in Malaysia?
In practice, a dormant company is a Sdn Bhd that is not carrying on any business: no sales, no purchases, no staff and no trading activity, but it has not been closed. It is still registered with SSM, still has directors, shareholders and a registered office, and still has a tax file with LHDN.
Companies go quiet for ordinary reasons. The founders registered it ahead of a project that has not started, the business moved to another entity, or trading stopped and the owners have not yet decided whether to restart or close. None of these change the company's legal duties.
The most common misunderstanding is that "no business" means "no filing". It does not. The obligations below come from the company's existence, not from its revenue, and they continue until the company is formally closed. Whether a company counts as dormant for SSM's audit exemption is a separate, specific test, covered further down.
What must a dormant company still do every year?
A dormant company still has almost the same yearly checklist as an active Sdn Bhd; there is simply less to record. As of October 2026, the core obligations are:
| Obligation | Deadline or rule | Usually handled by |
|---|---|---|
| Annual return to SSM | Within 30 days from each anniversary of incorporation (section 68) | Company secretary |
| Financial statements circulated to members | Within 6 months of the financial year end (section 258) | Directors, with an accountant |
| Financial statements lodged with SSM | Within 30 days after circulation (section 259) | Company secretary |
| Audit, or audit exemption | Every financial year | Approved company auditor, or the directors' own assessment if exempt |
| Form C (e-C via MyTax) | Within 7 months after year end; a 1-month e-filing grace is normally allowed | Approved tax agent |
| Accounting records | Entries within 60 days; kept for 7 years | Bookkeeper or directors |
| Company secretary in office | At least one at all times | Board of directors |
The financial statements must follow approved accounting standards; most private SMEs use MPERS. For how these deadlines line up across a full year, see the Sdn Bhd annual compliance calendar.
Does a dormant company need an audit?
Usually not. Under SSM's audit exemption rules (Practice Directive 10/2024), a private company that has been dormant since incorporation, or dormant in the current and the immediate past financial year, can elect not to have its financial statements audited. No application to SSM is needed; the directors assess the company themselves.
Audit exemption is not an accounts exemption. The company must still:
- prepare financial statements under approved accounting standards and circulate them to members;
- lodge the unaudited financial statements, the directors' report and a certificate of compliance with SSM within 30 days of circulation.
Some companies cannot use the exemption, including subsidiaries of public companies (and private companies jointly controlled by a public company), exempt private companies that lodge the EPC certificate instead of accounts, and foreign companies. Members holding, together, at least 5% of the voting shares can also require an audit by written notice, given during the financial year and no later than one month before it ends. Banks, licensing bodies and grant agencies may still ask for audited accounts.
If your company does not strictly count as dormant, it may still qualify under the revenue, total assets and employee thresholds, provided it meets two of the three for the current and the two previous financial years. The details are in our guide to audit exemption for Sdn Bhd.
Does a dormant company still file Form C?
Yes. A dormant company files Form C every year, declaring nil income where that applies. A quiet year does not remove the return; it only makes it simpler.
Form C is due within 7 months after the financial year end, and LHDN normally allows a 1-month grace period for e-filing. For a 31 December 2025 year end, the deadline is the end of July 2026, with e-filing grace to 31 August 2026. Companies file electronically, as e-C through MyTax.
Skipping the return is risky even when no tax is payable. Under section 112 of the Income Tax Act, failing to file can lead to a fine of RM200 to RM20,000, imprisonment of up to 6 months, or both; if LHDN does not prosecute, it can instead impose a penalty of up to three times the tax payable. Your tax agent can also tell you whether a CP204 tax estimate is needed while the company is dormant, and when instalments start again after a restart. More in Form C deadlines and penalties.
Can bank charges or director payments affect dormant status?
They can. Even a quiet company usually has a few transactions, and every one of them must be recorded. Typical examples are monthly bank charges, interest credited by the bank, and a director paying the company's yearly fees from a personal account, which the company then owes back to that director.
These entries may affect whether the company counts as dormant under SSM's rules, so ask your company secretary or accountant how the test applies before relying on the dormant route for audit exemption. Either way, they belong in the books.
Example: a "quiet" year in the books
Example with illustrative figures: a Penang hardware trading company with a 31 December year end stopped trading in mid-2024. In 2025 it had no sales and no purchases, but its bank deducted RM10 a month in charges, and a director paid RM3,000 of the company's professional fees personally.
| Item | Amount | Where it goes |
|---|---|---|
| Bank charges (12 × RM10) | RM120 | Expense; reduces the bank balance |
| Fees paid by the director | RM3,000 | Expense; increases the amount owed to the director |
| Loss for 2025 | RM3,120 | Financial statements and Form C |
None of this is dramatic, but if it is not recorded, the next accountant has to rebuild the year from bank statements, and the director's claim on the company becomes hard to prove.
What records should a dormant company keep?
A dormant company keeps the same kinds of records as an active one, for the same 7 years; there are just fewer of them. Keep:
- bank statements for every company account, including months with no movement;
- copies of the annual returns, financial statements, directors' reports and certificates of compliance lodged with SSM;
- Form C submissions and all correspondence with LHDN;
- resolutions and statutory registers, which your company secretary maintains;
- receipts, invoices and payment proof for anything paid by or for the company;
- a running record of the director's account, showing what the company owes its directors or is owed by them.
Under the Companies Act 2016 (section 245), entries must be made within 60 days of a transaction and records kept for 7 years after the transactions are completed; the Income Tax Act (section 82) also requires 7 years. Records may be kept in English or Bahasa Malaysia, and electronic records are acceptable if you can produce them on request. See how long to keep business records.
How do you restart a dormant company properly?
Restart in order: bring every overdue filing and the books up to date first, then switch the business back on. A sensible sequence:
- Check compliance status. With your company secretary, confirm that annual returns and financial statements are lodged for every year, and with your tax agent that Form C has been filed for every year. Catch up anything missing before you trade.
- Update company details. Directors, registered address and business activity should be current at SSM; your company secretary handles the changes.
- Review the bank account. Check signatories and online access, and keep company money strictly separate from personal money (see separating business and personal accounts).
- Set opening balances. The last financial statements give the starting figures for bank, the director's account, share capital and any old balances; your bookkeeper starts from these.
- Check tax and e-Invoice. Ask your tax agent about CP204 estimates for the first active year, watch the SST registration thresholds if you provide taxable services, and confirm whether the e-Invoice exemption below RM3 million applies to you.
- Re-check audit exemption. Once the company trades, the dormant route no longer covers that year, so check the revenue, assets and employee thresholds or plan for an audit.
If the books have gaps from before the company went quiet, deal with them now; our guide to catching up on a bookkeeping backlog explains how.
What if you want to close the company instead?
If the company has no future use, closing it can be simpler than funding its compliance every year. The usual options are having the company struck off the register, or winding it up.
Which route fits depends on the company's assets, debts and history, so discuss the options with your company secretary and your other advisers before deciding. Until the company is formally closed, it remains on the register and every obligation above continues, so keep filing while you decide. Its records still need to be kept for the full retention period.
How WeCount helps
WeCount keeps the books of quiet and restarting companies in order: we record the few transactions a dormant year has, reconcile the bank account, maintain the director's account and prepare clean year-end records for your accountant, auditor or tax agent. When you restart, we can rebuild opening balances and bring backlog months up to date, quoted separately. Regulated audit, tax-agent and professional accountancy services are delivered through appropriately authorised partners where required, and secretarial work stays with your licensed company secretary. See our bookkeeping service or contact us.
Frequently asked questions
Does a dormant company have to pay tax?
Tax is charged on chargeable income, so a company with no income usually has nothing to pay. It must still file Form C every year, declaring nil income where that applies, within 7 months after its financial year end. If it earns anything, such as bank interest, ask your tax agent how that income is treated.
Can a dormant company lodge unaudited accounts with SSM?
Generally, yes. A private company dormant since incorporation, or dormant in the current and immediate past financial year, can elect audit exemption without applying to SSM. It must still prepare and circulate financial statements, then lodge the unaudited statements, directors' report and certificate of compliance with SSM within 30 days of circulation.
Does a dormant company still need a company secretary?
Yes. Every company must have at least one company secretary, whether it trades or not, and the secretary must be licensed by SSM or be a member of a prescribed body. The secretary keeps the statutory registers and helps the company lodge its annual return and financial statements on time.
What happens if I stop filing for my dormant company?
The obligations continue, so arrears build up. A missing Form C can lead to penalties under section 112 of the Income Tax Act, and late lodgements with SSM can attract penalties too. Restarting or closing the company later also becomes harder when years of filings and records are missing, so keep everything current.
Is it better to keep a dormant company or close it?
It depends on your plans. Keeping it means an annual return, financial statements, Form C and a company secretary every year. If you have no future use for it, striking it off or winding it up may be simpler. Discuss the options with your company secretary before deciding, and keep filing in the meantime.
Official sources
This guide is general information for Malaysian businesses as at the date shown. It is not tax, legal or audit advice. LHDN, SSM and JKDM rules change — check the latest official guidance or a licensed tax agent or auditor before acting. Regulated audit, tax-agent and professional accountancy services are delivered through appropriately authorised partners where required.
