Dormant Company Audit Exemption
The first category under audit exemption Malaysia private limited company rules applies to dormant companies.
Definition of a Dormant Company
A company is considered dormant when:
- The company does not carry on any business activities
- There are no accounting transactions recorded during the financial year
An accounting transaction refers to any transaction that requires records under the Companies Act 2016, except mandatory payments required by law.
Eligibility Conditions
A company may qualify for dormant company audit exemption Malaysia if:
- The company has been dormant since incorporation, or
- The company remains dormant throughout the current financial year and the immediate past financial year
Companies meeting these conditions may apply for SSM audit exemption criteria and avoid appointing an auditor for that financial year.
Threshold-Qualified Company Audit Exemption
Another category for audit exemption criteria Malaysia Sdn Bhd is threshold-qualified companies. These companies are typically small businesses that meet specific financial thresholds.
Threshold Requirements
To qualify for threshold qualified company audit exemption Malaysia, a company must meet two out of three conditions during the current financial year and the previous two financial years:
- Annual revenue does not exceed the specified threshold
- Total assets do not exceed the specified threshold
- Number of employees does not exceed the specified threshold
These thresholds are gradually increased in phases to support small and medium enterprises.
New Threshold Phases (2025–2027)
Under updated audit exemption criteria Malaysia Sdn Bhd guidelines:
- 2025: Revenue and assets up to RM1 million, up to 10 employees
- 2026: Revenue and assets up to RM2 million, up to 20 employees
- 2027 onwards: Revenue and assets up to RM3 million, up to 30 employees
Companies meeting these thresholds may qualify for small company audit exemption Malaysia.
Zero-Revenue Company Audit Exemption
The third category under audit exemption Malaysia private limited company rules applies to companies that generate no revenue.
Definition of Zero-Revenue Company
A company qualifies for zero revenue company audit exemption Malaysia if:
- The company does not generate any revenue in the current financial year
- The company did not generate revenue in the previous two financial years
- The company’s total assets do not exceed RM300,000 during those periods
Revenue excludes certain accounting adjustments such as reversals of accounting entries or tax-related adjustments.
Implementation Period
The zero revenue company audit exemption Malaysia category applied to financial statements for accounting periods beginning from 1 January 2018 until 31 December 2024.
Conclusion
Understanding the qualifying criteria audit exemption Malaysia is important for private companies seeking to reduce compliance costs. Companies that qualify under the SSM audit exemption criteria may not need to appoint an auditor, but they are still required to prepare and submit financial statements to regulators.
Whether a company qualifies under dormant company audit exemption Malaysia, threshold qualified company audit exemption Malaysia, or zero revenue company audit exemption Malaysia, directors must ensure that financial records remain accurate and compliant with Malaysian corporate regulations.
Qualifying Criteria for Audit Exemption for Malaysia Private Limited Companies