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Batch1.5 MISHU BOReport Pt1

Beneficial Ownership And Why You Need To Fill Them Up

I’m sure your secretary is banging at your door and yelling at you to get the Beneficial Ownership (BO) form done. Fret not, we’re here to help! First, do you know what Beneficial ownership is? To put it in simple terms, a beneficial owner is a person or individual that has the ultimate control or ownership of an entity. Yes, according to the Company Act 2016 [Act 777] (CA 2016), BO literary means those who ultimately call the shots in a business and not nominee directors or shareholders. Is that person you? Or is that your boss? If that’s the case, this article is just for you!

Why the government is asking for BO?

Now, why is BO reporting crucial for both the country and business? According to Heather Lowe from Global Financial Integrity, she said that anonymous companies, where the information regarding ultimate beneficial ownership is hidden, are the number one vehicle for moving and hiding illicit money around the world. So, understanding who the Beneficial Ownership behind a company is a simple yet critical concept as with the information, a beneficial owner can be held accountable making tracking illicit money a much easier task.

This goes the same for Malaysia. According to the Guideline For The Reporting Framework for the Beneficial Ownership of Legal Persons, which was made to comply the section 20c of the companies’ commission of Malaysia Act 2001 [Act 614] (CCMA 2001), it is explained that while businesses are the main drive for Malaysia’s economic growth, they are also vulnerable to illicit activities such as terrorism financing, money laundering or even other serious crimes. The BO declaration is created to hold the businesses accountable by identifying the individuals behind these business entities. So, if any company is found affiliated with negative activities, the person behind the business can be immediately identified and brought to light.

Is your type of company required to declare BO

With that aside, I’m sure you’re wondering what types of company, or if your company is required to declare BO. According to the guideline framework provided by the SSM themselves, it is stated that companies (Sdn Bhd and Bhd) registered under the CA 2016, Limited Liability Partnership (LLP) registered under LLPA 2012 regardless of local or foreign and businesses such as sole proprietors and partnerships are required to do their BO reporting. For now, SSM has only stated that only these types of businesses are required to do BO reporting. In the future, however, it is predicted that every type of business will be required to do so.

What is the implication of BO reporting to your business?

Are you eager to learn more? Check out part 2 of our article on BO, or click the link here to bring yourself to where we’ll talk more about the details such as the criteria a business will need to prepare its BO declaration. At the time of writing, BO reporting is something new for all companies around Malaysia, there are still many unanswered questions even for secretaries and business owners around the world. Our secretaries are also keeping their eyes peeled for every new information regarding this BO form. So, we do recommend hitting our experts up if you are unclear about anything!

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