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.
Many owners hope a tiny company can skip the formal accounts. In Malaysia it cannot.
- Every company must keep records and prepare financial statements under an approved accounting standard
- MPERS is the simplified route, aimed at companies with no public accountability
- MASB approves two frameworks, MFRS and MPERS; there is no separate micro-entity standard
Where small companies do get relief:
- Fewer disclosures under MPERS than MFRS
- Audit exemption may be available to some small private companies, based on revenue, total assets and employee thresholds under SSM Practice Directive 10/2024; the audit section of this knowledge base covers it, and an exemption never removes the duty to prepare accounts
- Dormant companies are treated differently for audit but must still file
Ways to keep costs low:
- Use cloud software and keep documents tidy through the year
- Close the books monthly
- Choose MPERS rather than MFRS
A statutory audit or financial statements cannot be replaced by management accounts or tax computations.
Legal basis
- Companies Act 2016, s.248
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
- 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.
- 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.
- 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.