New Guidelines for BO Reporting in Malaysia (Issue 1 of 2)
Suruhanjaya Syarikat Malaysia (“SSM”) (also known as Companies Commission of Malaysia) implemented new guidelines for beneficial ownership reporting on 1 April 2024. Beneficial Ownership (BO) reporting is an essential aspect of corporate governance, ensuring transparency and compliance within organizations. BO reporting identifies the true individuals who hold ownership or control over a company, regardless of its legal structure.
What is Beneficial Ownership?
Beneficial ownership refers to the natural person(s) who ultimately own or control a legal entity, such as a company. A BO is an individual who benefits from the shares or assets held by the company, even if they don’t appear on official documents. This concept ensures the identification of individuals who hold ultimate power or influence over the organization, even if that ownership is through intermediaries or legal arrangements.
Who is Considered a Beneficial Owner?
As per regulatory standards, a BO is defined as:
- Shareholders: Individuals who directly or indirectly hold at least 20% of the company’s shares.
- Voting Rights Holders: Those who control at least 20% of the voting rights, either directly or indirectly.
- Control by Other Means: Individuals exercising ultimate control over the company, whether formally or informally, such as shadow directors or those with veto power over significant business decisions.
Special cases include:
- Deceased Shareholders: The executor or administrator of the estate may be considered the BO until the shares are transferred.
- Bankrupt Individuals: The Director General of Insolvency takes temporary control, acting as the BO.
- Mentally Incapacitated Individuals: A court-appointed committee manages their shares, serving as the BO.
Stay tune for the upcoming newsletter, we will share with you more on BO Reporting: A Comprehensive Overview.
