SSM’s Practice Note No. 9/2010
COMPANIES ACT 1965: SSM’S PRACTICE NOTE NO. 9/2010
RE:
APPLICATION FOR EXTENSION OF TIME:
(I)
TO CONVENE THE ANNUAL GENERAL MEETING OF A
COMPANY; AND
(II) TO LAY THE PROFIT AND LOSS ACCOUNTS OF A COMPANY
1.
This Practice Note serves to explain and facilitate the understanding of
officers of companies in the application for extension of time in relation to:
(i)
the convening of the annual general meeting (AGM) of a
company; and
(ii)
the laying of the profit and loss accounts during the AGM of a
company.
BACKGROUND
2.
Section 143(1) of the Companies Act 1965 (CA 1965) states that a
company is required to convene its AGM once in every calendar year and not
more than 15 months after the holding of the last AGM. For newly
incorporated companies, it is required to hold its first AGM within 18 months
of its incorporation.
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3.
Section 169(1) of CA 1965 requires the directors of a company to lay
before the company at its AGM the profit and loss account for the period
since the date of the preceding account made up to a date of not more than
six (6) months before the date of such AGM.
4.
Sections 143(2) and 169(2) of CA 1965 confer the Registrar with the
discretionary powers to allow extension of time to hold the AGM and to lay
the profit and loss accounts. The Registrar’s powers to grant extension of
time for the holding of AGM under section 143(2) of CA 1965 are as follows:
(i)
Extension of the period of 15 months for the purpose of holding a
company’s AGM after the holding of the last AGM; and
(ii)
Extension of the period of 18 months for the purpose of holding a
company’s inaugural AGM.
The Registrar’s powers to grant extension of time for the laying of profit and
loss accounts under section 169(2) of CA 1965 are as follows:
(i)
Extension of the period of 15 months for the purpose of laying a
company’s profit and loss account at its AGM;
(ii)
Extension of the period of 18 months for the purpose of laying a
company’s profit and loss account after its incorporation; and
(iii)
Extension in relation to the period when the account was made
up.
The Registrar may exercise his discretion to grant the extension of time
under sections 143(2) and 169(2) of CA 1965 even beyond a calendar year.
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Such discretion may be exercised by the Registrar upon his satisfaction that
there exist special reason for such extension to be granted.
PROCEDURES FOR APPLICATION
5.
Regulation 10A of the Companies Regulations 1966 (CR 1966)
stipulates the following procedures in relation to an application for extension
of time under sections 143(2) or 169(2) of CA 1965:
(i)
The board of directors must pass a resolution to apply for the
extension of time; and
(ii)
6.
Lodgement of form 51A of the Second Schedule of CR 1966.
The application for extension of time shall be made before the
expiration of the calendar year in which the AGM would otherwise be
required to be held under section 143(1) of CA 1965 or in which the profit
and loss account would otherwise be required to be laid under section
169(1) of CA 1965, as the case may be. An application for an extension of
time for both sections 143(1) and section 169(1) of CA 1965 may also be
made simultaneously.
7.
Regulation 10A also provides for an application for further extension of
time where the initial extension granted by the Registrar is not sufficient.
The application shall be made not later than 14 days before the initial
extension expires.
8.
SSM has outlined the following procedures for the applications of
extension of time under section 143(2) and 169(2) of CA 1965:
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(i)
The application shall be by way of Form 51A of the Second
Schedule of CR 1966;
(ii)
The directors’ resolution must be attached to Form 51A;
(iii)
The company must state the special reasons for the application
for extension of time;
(iv)
The application for extension of time shall be made at least one
(1) month prior to the AGM should otherwise be held; and
(v)
The application must be accompanied with an application fee of
RM100 per section in accordance with Item 20 of the Second
Schedule of CA 1965.
9.
Where an application for further extension is made, the Form 51A
must be accompanied with the directors’ resolution and lodged with SSM not
later than 14 days before the initial extension expires. The form must be
endorsed with the words „Application for Further Extension‟ and such
application must also be accompanied with an application fee of RM100 per
section.
CIRCUMSTANCES WHICH MAY AMOUNT TO SPECIAL REASON
10.
The application for extension of time will be assessed by the Registrar
on a case to case basis. The Registrar may allow the application for
extension of time on the following circumstances:
(a)
Where the auditor is facing difficulties in the course of his audit.
Such difficulties must however not be deliberately caused by the
company, its subsidiaries or parent company. A letter from the
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auditor explaining such difficulties experienced must be attached
together with the Form 51A lodged;
(b)
Where a company elects to change its financial year and under
such circumstances, may result in its inability to lay the profit
and loss accounts at the AGM during the calendar year. Practice
Note 2/2009 titled “Change in Financial Year” has addressed the
circumstances that may warrant an application for extension of
time under section 143(2) following the change of a financial
year of a company;
(c)
The number of shareholders fall below the statutory requirement
due to death, insanity or incapacity;
(d)
The number of directors fall below the statutory requirements
due to death, insanity or incapacity (e.g. disqualification under
sections 124, 125, 130 or 130A of CA 1965);
(e)
Where the accounts, records or documents are lost or destroyed
due to fire, flood or other types of natural calamities;
(f)
Where the company is under investigation by police or other
relevant authorities/regulatory bodies where documents, records
or accounts are held by the authorities/regulatory bodies; or
(g)
Where a company is undergoing a corporate restructuring
exercise involving merger and acquisition.
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11.
The circumstances enumerated under paragraph 10 however are not
exhaustive. The Registrar reserves his rights to exercise his discretion to
allow any application for extension of time under sections 143(2) or 169(2)
of CA 1965 if he is satisfied that the reasons given qualifies as special
reason upon taking into consideration the facts and circumstances of the
case as a whole.
REGISTRAR OF COMPANIES
COMPANIES COMMISSION OF MALAYSIA
4 June 2010
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