Automatic Reduction on Compound

Starting from July 1, 2019, the Companies Commission of Malaysia (SSM) will implement the automatic  compound rate reducing method as a remedial solution for the compound within a specified period. This approach also aims to encourage the corporate community in complying with the provisions of the Companies Act 1965 and the Companies Act 2016.

The main purpose of implementing this new method is to provide benefit to the corporate community to enjoy a higher compound reduction rate without having to submit an appeal to the SSM.

The mechanisms and the rate of automatic compound reduction are as follows:

Payment Period From Date of CompoundReduction Rate From the Original Compound Issued
1 to 40 days85%
41 to 60 days75%
61 to 90 days60%
91 to 180 days30%

The reduction of the compound will automatically be given to the compounds issued for offences under the Companies Act 1965 and the Companies Act 2016, except:

  • Compound for Out-of-Court or Investigation Papers issued by the Prosecution & Litigation Division and State / Branch Office;
  • Expired Compounded but regenerated for payment process; and
  • Compound that has been given a reduction through the previous appeal process.

Reductions will be given during the payment made at any SSM counter throughout Malaysia.

SSM as a corporate regulator is responsible to ensure a high level of compliance under the provision of the Companies Act among the corporate community in Malaysia as good corporate governance can ensure the continuity and integrity of a company.

SSM would like to suggest that Malaysian corporate community to take this opportunity to clear the compound to avoid any court action.

The automatic compound reduction offer is subject to Section 38A (1) of the Companies Commission of Malaysia Act 2001. When the court action has been taken, all appeals will not be entertained.


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