Want to Declare Your Company Dormant?
Our team handles SSM and LHDN compliance for your dormant company.
Many Sdn Bhd owners keep a company that isn’t operating without formally doing anything about it — whether a project got shelved, they’re waiting for a new opportunity, or it’s a side company that was never used. The problem is, a “quiet” company like this still legally exists under SSM and remains subject to basic compliance requirements. Leave it alone without properly declaring dormant status, and you can still end up with a compound.
What Is a Dormant Company?
A company is considered dormant if it has no significant accounting transactions during a financial year. Permitted transactions are usually limited to statutory costs only — such as SSM fees, maintaining a registered office, and Annual Return filing fees. Once there’s a real business transaction (a sale, a purchase, paying salaries), the company is no longer considered dormant.
Why Formally Declare Dormant Status?
While there isn’t a single SSM form to “declare dormant”, dormant status needs to be properly recorded in financial statements and tax filings so that:
- LHDN understands why the company isn’t reporting business income.
- Your auditor/accountant can prepare financial statements that accurately reflect the actual status.
- You can apply for tax filing exemption or simplification at LHDN (subject to their approval).
What Still Needs to Be Filed Even While Dormant
- Annual Return to SSM — mandatory every year, regardless of operating status.
- Basic financial statements — even if minimal, these still need to be prepared and certified.
- Company secretary — a dormant company must still have a registered company secretary.
- Notice to LHDN if you want to apply for dormant status for tax purposes.
Dormant vs Strike Off: Don’t Confuse the Two
Dormant means the company still legally exists but isn’t operating — you can reactivate it any time by notifying SSM. Strike off means the company is removed entirely from the SSM register and no longer exists as a legal entity. If you’re confident you won’t use that company again long-term, striking it off may be more cost-effective than paying compliance fees every year for an unused company.
When Should You Choose Dormant Over Strike Off?
- You plan to use the company again soon (e.g. waiting on a project or a licence).
- The company name or operating history has value you don’t want to lose.
- The cost of staying dormant (Annual Return + secretary fees) is still cheaper than re-incorporating later.
If there’s no plan to use it again at all, consider strike off instead — see our guide on Strike Off vs Winding Up for the full process.
How to Declare Dormant Status: Practical Steps
- Make sure no significant business transactions occur during the relevant financial year (other than statutory costs).
- Inform your company secretary and accountant so financial statements are prepared as “dormant”/inactive.
- File the Annual Return as usual with SSM, stating dormant status in the accompanying financial statements.
- File the income tax return (Form C) with LHDN as usual, declaring nil/dormant income with a supporting note.
- If the company has an active bank account, consider closing it or minimising transactions to keep dormant status consistent.
There’s no single “declare dormant” form at SSM — this status is recorded through how your financial statements and tax filings are prepared, not through a separate application.
Dormant Company With Former Staff: What About EPF/SOCSO?
If a dormant company previously had employees who have all since left, make sure all outstanding EPF and PERKESO (SOCSO) contributions are settled before the company goes fully quiet. A dormant company that still has registered employees (even inactive ones) is still required to update its status on the PERKESO ASSIST portal. Don’t leave an employer account open without updating it — this can affect the company’s compliance record even while dormant.
Can an LLP Also Be Dormant?
The dormant concept is usually associated with Sdn Bhd companies under the Companies Act 2016. For a Limited Liability Partnership (LLP) under the LLP Act 2012, there’s no equivalent “dormant” provision — an LLP that isn’t operating still needs to file its Annual Declaration and pay annual fees, or consider striking off the LLP if it won’t be used again.
Estimated Annual Cost of Keeping a Company Dormant
| Item | Estimated Annual Cost (RM) |
|---|---|
| Company secretarial fee | 600 – 1,200 |
| SSM Annual Return filing fee | 36 (SSM fee) + service charge |
| Dormant financial statement preparation | 500 – 1,500 |
| Dormant tax filing (Form C) | 300 – 800 |
| Registered address (if outsourced) | 300 – 600 |
Total estimated cost of staying dormant: roughly RM1,700 to RM4,000 a year depending on your service provider. Compare this to the cost of incorporating a new company (typically a one-time RM1,500–RM3,000) to decide whether staying dormant or striking off and re-incorporating later makes more sense.
Impact of Dormant Status on Directors and Shareholders
Directors of a dormant company remain bound by fiduciary and statutory duties under the Companies Act 2016 — including keeping company records updated and completing annual filings on time. Failing to do so can result in SSM fining directors personally, even if the company isn’t operating. Shareholders don’t lose their equity rights while a company is dormant either — shares remain valid and transferable as usual.
3 Common Mistakes Owners Make With Dormant Status
- Assuming “not operating” automatically means dormant in LHDN’s eyes — you still need to file taxes and properly declare the status, not just go quiet without filing.
- Leaving a bank account active with small transactions — even small non-statutory transactions (like a software subscription payment) can jeopardize dormant status during an LHDN audit.
- Forgetting to file Annual Returns for years — this is the most common reason companies get forcibly struck off by SSM, rather than it being the owner’s own choice.
How SASCO Can Help
Our team can help keep your company compliant while dormant — from Annual Return filing and minimal financial statement preparation, to advising on whether dormant status or strike off is more suitable, in line with your company secretary obligations.
Frequently Asked Questions
Does a dormant company still need to file an Annual Return?
Yes. The Annual Return to SSM is mandatory every year regardless of whether the company is operating.
Can a dormant company avoid tax entirely?
Not automatically. You need to notify LHDN and apply for exemption/simplification, subject to their approval.
How long can a company stay dormant?
There’s no fixed time limit under the Companies Act 2016, but annual filing requirements still apply until the company is struck off.
Dormant or strike off, which is better?
It depends on your long-term plans. Stay dormant if you’ll use the company again; strike off is usually more cost-effective if there’s no plan to use it at all.
Is there a special form to declare a company dormant at SSM?
No single form exists. Dormant status is recorded through how financial statements are prepared and notes included during Annual Return and tax filing, not a separate application.
If a dormant company had employees before, what happens to EPF/SOCSO?
Settle all outstanding contributions and update the employer account status on the PERKESO ASSIST portal.
Can an LLP also be declared dormant like a Sdn Bhd?
There’s no specific dormant provision for an LLP under the LLP Act 2012. It still needs to file an Annual Declaration and pay fees, or consider strike off.
Does a dormant company still need to maintain a registered company secretary?
Yes. The requirement to appoint and maintain a registered company secretary applies to all Sdn Bhd companies, including dormant ones.