Under the new companies law in Malaysia, any aspiring startup founder or entrepreneur can set up a company using a “Do It Yourself” (DIY) method without using a company secretary using the MyCoID online registration system managed by the Companies Commission of Malaysia (CCM).
But many founders and entrepreneurs do not realise that even though you can form a company by yourself, the law still requires you to appoint and hire a company secretary within 30 days after the company is approved. In other words, your company must have at least one company secretary at all times.
I know so many founders want to save a bit of money on incorporating or saving money when choosing a company secretary. I have written so many times about why it’s crucial to get a company secretary, but here are the reasons why I think you should just hire one right away to get the company formed instead of doing it yourself (DIY).
It doesn’t cost that much to form a company
Many digital corporates secretarial firms like Foundingbird lets you form a new company as low as RM1,499. The incorporation process is so rudimentary and plain vanilla work that you’re better off getting a professional to handle it. The incorporation fee payable to the CCM is RM1,050 so whatever additional costs are the “charges” by the corporate secretarial firm.
A mistake in the entity submission can and will cost you a lot more
What if you wrongly typed your cofounder details like his full name or even his registration ID details? Or even got the wrong paid-up capital inserted during the formation stage? Or you didn’t know the differences between a business address and a registered address?
If you made any of the above typos or mistakes, you need to get a company secretary to file a new filing to rectify or fix them. In other words, they need to get paid to do the necessary paperwork and filing.
Even for me as a corporate lawyer or legal counsel or even company secretaries, we tend to make careless mistakes from time to time but these are the risks that we have agreed to take up as your service provider or professional. In your case, you have to take and absorb the costs on your own which can be a lot (especially if you don’t know what you’re doing).
You need to know what to respond if there’s a query
The incorporation may seem straightfowrad where you just fill in and upload some documents , but the company registrar may come back and ask for clarification if the documents are incomplete.
For example, what if the company registrar comes back and asks for clarification on the proposed company name. If your company name happens to be similar to an existing business, you’d need to get the existing business to provide a letter of no objection. Essentially the letter sets out a notice to the CCM that they have no complaint for you to use the name. A good company secretary can also help you book a company name (it costs like RM50 per reservation), allowing you to reserve the name for up to a month.
A good company secretary can help you avoid the significant pitfalls and complications above to get the company formed and start your business.
It’s easy to be “penny wise and pound foolish”, but the money you’re saving on the incorporation fee is so negligible or little that you’re better off engaging a company secretary and forget the hassle of the paperwork involved. So just skip the headache and pay someone to get this sorted out for you so that you can focus on the more important stuff.