Can You Change Company Secretary If Your Company Has Penalties in Malaysia?

Admin
2 days ago
3 min read

How SMEs and Sdn Bhd Can Stay Fully Compliant in 2026

Receiving a penalty notice from Suruhanjaya Syarikat Malaysia (SSM) can be stressful for any business owner.

A common question we hear from directors is:

“Can we change our company secretary if the company already has penalties?”

The answer is yes — you can. However, it is important to understand that changing your company secretary does not eliminate existing penalties or liabilities.

At Ashton Corporate, we believe in addressing compliance matters clearly and proactively. This guide explains what you need to know.

Is It Legal to Change a Company Secretary If There Are Penalties?

Yes.

Under the Companies Act 2016, a company may remove and appoint a company secretary at any time through a board resolution.

There is no legal restriction preventing a change due to outstanding penalties.

However, any existing compound fines, late filing penalties, or enforcement actions remain attached to the company.

What Happens to Existing Penalties?

Penalties issued by SSM do not disappear when you appoint a new company secretary.

These may include:

Late filing of Annual Returns
Late submission of Financial Statements
Failure to notify changes in company particulars
Non-compliance notices

The company remains responsible for rectifying these matters. Directors may also face personal liability depending on the nature of the breach.

Changing the company secretary affects future compliance management — not past defaults.

Why Do Companies Consider Changing Their Company Secretary?

Businesses typically explore this option when:

Compliance deadlines were missed without proper follow-up
Communication was inconsistent
Advisory support was insufficient
Multiple penalties were incurred
There is a breakdown in professional confidence

In some situations, the issue arises from internal oversight. In others, it may be due to inadequate compliance monitoring.

A proper review of the circumstances is essential before proceeding.

The Proper Procedure to Change Company Secretary in Malaysia

The process is straightforward but must be handled correctly.

1. Board Resolution

The Board of Directors must formally resolve to:

Accept the resignation of the current company secretary, or
Remove the current secretary

This decision must be documented in the company’s records.

2. Appointment of a Qualified Company Secretary

The new company secretary must:

Be licensed or registered under Malaysian law
Provide written consent to act

Professional qualification is mandatory.

3. Lodgement with SSM

The company must notify SSM within 14 days of the change.

Failure to lodge this update can result in additional penalties.

Will SSM Reject the Change Due to Penalties?

Unlikely.

SSM generally allows changes in company secretary regardless of existing penalties.

However:

Enforcement actions may continue
Outstanding filings must still be completed
Directors remain accountable

Compliance issues must still be resolved separately.

Can a New Company Secretary Help Rectify Past Non-Compliance?

Yes — and this is often the most practical solution.

An experienced and proactive company secretary can:

Conduct a compliance health check
Identify all outstanding filings
Advise on compound reduction options
Liaise directly with SSM
Regularise company records

Early intervention can prevent escalation.

At Ashton Corporate, we focus not just on filings — but on ensuring directors understand their statutory responsibilities and compliance timelines clearly.

Key Considerations Before Making the Change

Before appointing a new company secretary, directors should ensure:

Full handover of statutory registers and documents
Clear identification of outstanding issues
Written confirmation of past advisory communications
Proper documentation of board decisions

A smooth transition reduces future risk.

Director Responsibilities Remain

It is important to remember that directors carry fiduciary duties under the Companies Act 2016.

While company secretaries manage compliance processes, directors are ultimately responsible for ensuring statutory obligations are met.

Proactive oversight and regular compliance reviews are essential.

Final Thoughts

So, can you change your company secretary if your company has penalties in Malaysia?

Yes, you can.

However, changing the company secretary does not remove penalties or legal exposure. It simply appoints a new professional to manage compliance moving forward.

If penalties occurred due to inadequate support or poor compliance monitoring, engaging a reliable and responsive corporate secretarial partner can help restore order and confidence.

If your company is currently facing compliance issues or penalties, it is advisable to act promptly and seek professional guidance.

Need Professional Support?

At Ashton Corporate, we provide structured, reliable company secretarial services designed to keep your business compliant and protected.

If your company has received penalties or requires a compliance review, our team can assist with:

Compliance assessments
Rectification of outstanding filings
Advisory support for directors
Ongoing statutory management

Learn more about our services at:👉 https://www.ashtoncorporate.com/