Why did SSM establish the BO (Business Owner) system? What is its significance?
Background and Requirements
- Under the Companies (Amendment) Act 2024, from 1 April 2024, all companies must identify and declare their Beneficial Owner (BO).
- Failure to declare BO or providing false information may result in legal penalties, and in some cases, prosecution.
What is a BO?
- A BO is a person who, although not listed in the company’s registration records and not a director or shareholder, actually controls the company’s operations and receives the benefits.
- In the past, such “behind-the-scenes owners” were difficult to trace, which is why Malaysia established the BO system to strengthen regulation.
Significance of the System
- Enhances transparency in company operations and prevents issues such as “using someone else’s name to register a company” or “nominee directors.”
- Supports compliance with anti-money laundering requirements.
- Prevents shadow companies or shell companies from operating.
- Ensures that the actual controllers of the company take legal responsibility and can no longer “hide behind the scenes.”
Overall Objective
- The BO system is not only aimed at identifying behind-the-scenes owners, but also at creating a more transparent and trustworthy business environment.