In Malaysia, the concept of beneficial ownership is not a technicality anymore; it is the hinge around which the corporate transparency, anti-money-laundering (AML) integrity, and stakeholder trustful relationships turn. When the statutory changes with their broad scope take place on 1 April 2024 and the limited liability partnerships (LLPs) have a longer framework from 31 January 2025, all organisations will be required to understand who ultimately owns or controls them and to report that information with meticulous accuracy. This guide summarises the law, time limits and action steps companies operating in Malaysia require at this time.

1. What really is Beneficial Ownership in Malaysian Law?

According to the amended Section 60A of the Companies Act 2016 (CA 2016), a beneficial owner (BO) is considered as a natural person who ultimately owns or controls a company and also a person who exercises ultimately effective control over the company. 

More importantly, shareholding is not the only stick. An individual who:

• Beneficially owns (or controls) 20 % or more of the issued shares or the voting rights.
• Owns less than 20 percent but continues to have a large influence or power over directors or management,

is categorised as a BO. 

This wider sweep closes the door on some past favorite techniques that parked control in nominee cars or in intricate trust arrangements.

2. The Importance of Beneficial Ownership Now, More than Ever

We find three reasons strong enough to prioritise BO compliance:

1. Regulatory enforcement Non-compliance is punishable with fines of up to RM20,000, daily default charges and the default penalty of RM50,000 and/or three years imprisonment under Section 588. 
2. Public transparency- BO information is now visible in annual returns (Section 68(3) CA 2016) so that ownership profiles can be seen by investors, banks and counterparties. 
3. International compatibility – The update will bring Malaysia in line with the FATF and OECD requirements, protecting businesses against international compliance-related hiccups. 

3. Regulatory Timeline at a Glance

4. The e-BOS Platform: Compliance Digital Backbone

With effect 1 April 2024, the Electronic Beneficial Ownership System (e-BOS) which will be operationalized by the Companies Commission of Malaysia (SSM) is the exclusive channel through which BO information can be filed and/or updated. 

Notable features

• Automatic approval of simple lodgements
• Error correction rectification module
• Seven-year retention, audit trail as statutory duties reflect on register

Keeping your internal BO register and e-BOS entries in real-time sync in order to prevent mismatch penalties.

5. How We Find Beneficial Owners Step-by-Step.

1. Tree-map the shares – Track all direct and indirect shareholders until you hit a natural person.
2. Undergo the 20 % test - Flag those with 20 % or more shares or voting rights.
3. Shadow control – Ask questions to uncover shadow control by interviewing directors and senior managers.
4. Document evidence – Gather passports, ICs and supporting agreement; keep them in the BO Register.
5. Where gaps in data are observed, issue Section 60C notices to the suspected BOs or members. Failure to respond attracts penalties on the recipient. 
6. Lodge by e-BOS – First filing- within statutory window; subsequent 30 days to make any change in specifics.

6. Previously Tax-Exempt Organizations

The 2020 guidelines provided blanket exemptions to listed companies, government-linked companies, and wholly state-owned entities. That stay has vanished. Nowadays, it is necessary that all entities have a disclosure of a natural person, although the real owner may be difficult to determine, at least a high-ranking managing officer should be registered as a place holder until the BO is established. 

7. Penalties & Enforcement Matrix

8. LLPs: Old Transparency, New Rules

The Limited Liability Partnerships (Amendment) Act 2024 inserts s.35A-III and reflects company obligations definition, register, notice powers, penalties but adjusts timelines to LLP activities. The transitional windows will be 1 February 2025 31 October 2025, after which non-compliance will imply the same fines and imprisonment. 

The LLP compliance officers ought to:

• Don t panic in April: develop a BO identification framework now.
• Combine BO checks and annual declaration under Section 68 of the LLP Act.
• Get ready to go live with e-BOS-LLP; expect some system peculiarities planning to submit early.

9. Foreign and Dormant Companies: No Safe Harbour

The new section 573A will impose the reporting of BO to foreign companies that conduct business in Malaysia. Even dormant companies have to file, and the fact of not doing anything does not exempt the duty of transparency. 

10. Five Best-Practice Actions

1. Integrate BO due diligence into the onboarding process, transfers and capital raises.
2. Assign a BO champion, who is usually the company secretary or the head of compliance, to monitor filings.
3. Turn on calendar reminders about the 30-day update due date.
4. Keep the register at the registered office or give note to SSM of other premises under Section 60B(7).
5. Run pretend regulatory audits to put the documentation and response procedures under pressure.

FAQ

Must we disclose trusts? What about employee share schemes? Can we redact sensitive personal data? How often must we update?