Is a Sdn Bhd legally required to keep accounting records?
Yes. Section 245 of the Companies Act 2016 requires every company, including its directors and managers, to keep accounting and other records that explain its transactions and financial position. This applies even to a new, dormant or loss-making company.
Every company incorporated in Malaysia must keep proper records, regardless of size, turnover or whether it is trading.
The records must be good enough to:
- Explain each transaction and the company's financial position
- Allow true and fair financial statements to be prepared
- Allow the accounts to be audited, where an audit applies
The duty sits with the company, its directors and its managers. Hiring a bookkeeper or accountant does not transfer the legal responsibility; it only delegates the work.
Other points to know:
- Entries must be made within 60 days of completing the transaction
- Records are kept for seven years (see the retention question)
- The records are kept at the registered office or another place the directors decide, and directors must be able to inspect them at any time
- Breaching the section is an offence by the company and every officer, with a fine of up to RM500,000, imprisonment of up to three years, or both
The Income Tax Act 1967 adds a separate record-keeping duty for tax purposes, so the same books serve both laws.
Legal basis
- Companies Act 2016, s.245
- Income Tax Act 1967, s.82
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Do sole proprietors and partnerships in Malaysia need to keep books?Yes. The Income Tax Act requires anyone with business income to keep sufficient records to work out their income. LHDN has a separate public ruling for businesses that are not companies. The Companies Act rules apply only to companies.
- Is there a simpler accounting standard for very small or micro companies?MPERS is already the simplified standard, and it is the lightest framework in common use for Malaysian companies. There is no further exemption that lets a very small company skip financial statements or the accounting framework, though some disclosures and audit rules differ for small companies.
- What is a chart of accounts and how should I set one up?A chart of accounts is the list of categories you use to record every transaction, grouped into assets, liabilities, equity, income and expenses. Set it up so it matches your business and the headings you need in the financial statements and tax computation.
- What is the difference between bookkeeping and accounting in Malaysia?Bookkeeping is the day-to-day recording of transactions: sales, purchases, payments and receipts. Accounting uses those records to prepare financial statements, interpret results and support decisions and tax filing. Good bookkeeping comes first, because accounts can only be as reliable as the entries beneath them.
- How long must a Malaysian company keep its accounting records?A company must keep accounting records for seven years after the transactions they record were completed. For tax, documents must be kept for seven years from the end of the relevant year of assessment. Use whichever period ends later.