Why ‘Dormant’ Doesn’t Mean ‘No Accounting Needed

Why ‘Dormant’ Doesn’t Mean ‘No Accounting Needed’

I can’t count how many times I’ve heard this line:

“My company is dormant one. Never do business. No need to file lah.”

I get it — it sounds logical.
If the company didn’t earn anything, why bother with accounts?

But here’s the truth: “dormant” in normal language and “dormant” in compliance terms mean two very different things.

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⚖️ 1. Dormant in SSM Terms ≠ Doing Nothing

In Malaysia, SSM defines a dormant company as one that has no accounting transactions during a financial year.
That means no income, no expenses, no payments — not even a bank fee or director reimbursement.

So if your company has a bank account, pays your CoSec fee, or covers domain hosting — guess what?
It’s not dormant anymore.

Dormant means truly inactive — like sleeping with no movement at all.

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🧾 2. Dormant Companies Still Need to File Annual Returns

Even if your company qualifies as dormant, you still need to file your Annual Return with SSM every year.
This confirms that your company is still in existence and that your director/shareholder info is up to date.

If you skip that, SSM can fine your company or even strike it off the register.
And once struck off, you’ll have trouble reopening or starting another one later.

Dormant ≠ invisible to SSM. You still exist in their system.

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📊 3. Dormant Companies May Be Audit-Exempt, But Not Accounting-Exempt

Yes, there’s good news: dormant private companies can apply for audit exemption — meaning you don’t have to do a statutory audit.
But you still need to prepare financial statements to prove that your company is indeed dormant.

That’s why some directors get caught — they assume “no audit” means “no accounting.”
In reality, you must still prepare a basic set of accounts to show zero activity, then submit the necessary forms.

You can’t claim you did nothing without showing the record that proves it.

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🧮 4. Why You Should Still Maintain Minimal Records

Even if your company is genuinely inactive, keeping simple records (bank statements, invoices, correspondence) protects you later.
If SSM or LHDN asks questions, you’ll have proof ready — not panic.

Also, when you decide to revive the company in the future, having old records helps your new accountant restart things easily.

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💬 5. The Safer Approach: Stay Proper, Stay Clean

Many directors leave dormant companies unattended for years — until they suddenly get a penalty notice.
That’s why at Trust Maven®, we always remind clients:

“Dormant or not, the law still sees you as a live company.”

We don’t act on your behalf unless you officially engage us, but we do offer a free dormant company screening — just to check your status, deadlines, and risks before you get any surprises.

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💬 Final Thoughts

Dormant doesn’t mean forgotten.
Even a sleeping company needs proper care — just lighter care.

The key is to know your obligations early and handle them the right way before they snowball into something bigger.

At Trust Maven®, we believe peace of mind comes from structure — not luck.
And that applies even when your company isn’t “doing anything.”
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“A dormant company should rest, not rot.”

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💌 Not sure if your company is truly dormant or still active?
Message Trust Maven® for a free dormant company screening — no commitment, just clarity on where you stand.