Failure to prepare or submit an Audit Report on time will violate four legal provisions!
Berhad May Breach 4 Requirements
- If a Berhad fails to prepare and submit its Audit Report within the prescribed timeframe, it may breach multiple legal requirements and face substantial penalties.
Failure to Prepare the Audit Report Within the Required Time
- The Audit Report must be completed within the statutory deadline.
- Penalty: Up to RM500,000
Failure to Circulate the Audit Report to Members
- The Audit Report must be provided to the company's members.
- Penalty: Up to RM50,000
Failure to Submit the Audit Report
- The company must submit its Audit Report in accordance with legal requirements.
- Penalty: Up to RM50,000
Failure to Hold an Annual General Meeting (AGM)
- A Berhad is required to hold an Annual General Meeting (AGM).
- If the Audit Report is not ready, the AGM may not be able to proceed as scheduled.
- Penalty: Up to RM20,000
What About Sdn Bhd?
- A Sdn Bhd is generally not required to hold an AGM.
- Therefore, if the Audit Report is not prepared on time, it will usually involve only the first 3 compliance breaches:
- Failure to prepare the Audit Report on time
- Failure to circulate the Audit Report to members
- Failure to submit the Audit Report
Why Is Timely Completion Important?
- To avoid breaching statutory requirements
- To avoid significant penalties
- To maintain corporate compliance
- To prevent delays in other statutory obligations and company matters
Summary
- A Berhad may face 4 compliance breaches if its Audit Report is not prepared on time.
- A Sdn Bhd will generally face only the first 3 breaches.
- Companies should plan their audit process early to avoid unnecessary legal and financial consequences caused by delays.