ROC to weed out dormant firms

Registrar checking to see if it has winding up power

 

The Cabinet has directed the Registrar of Companies (ROC) to weed out dormant companies that have been registered for years but never recorded any business activity.

 

Domestic Trade and Consumer Affairs Minister Tan Sri Muhyiddin Yassin said the ROC would study the Companies Act, 1965 to see if it had the powers to wind up dormant companies.

He said the current practice of buying RM2 shelf companies to secure contracts without adequate expertise or capital should be curbed.

 

"If the individuals and groups who buy these companies fail in their bids, they just abandon the company ," he said after his ministry's weekly post-Cabinet meeting.

 

Muhyiddin said the ROC's records showed more than 530,000 registered companies but how many of these firms were active was anybody's guess.

 

"The Cabinet decided to study the implications of the move and steps taken by other countries with similar laws to overcome the situation," he said.

 

The minister said the Cabinet had also directed the ROC to come out with guidelines on company names. Many of the names registered, he said, were unsuitable and did not help inspire confidence in investors.

 

“Although some of the names are funny, unusual or catchy, they do not do anything to gain the confidence of people, especially foreign investors who want to invest in Malaysian companies," he said.

He said in future, the ROC may request applicants to state the meaning of the names they had selected, in any language to verify its suitability.

 

"If they can't explain or the name exudes an unsuitable meaning or cannot be explained, then it may not be accepted," he said.

 

He, said company secretaries should also advice their clients on suitable names.

 

Earlier, he said the Cabinet had approved a RM200 incentive for the ministry's enforcement officers from last month.

 

Muhyiddin said the incentive would motivate the officers to work harder .

 

He said the ministry had forwarded an appeal to the Public Services Department and the Treasury for the incentive as the officers were often required to work beyond their normal working hours and even be on standby during weekends, public holidays and even when they were on leave.

 

The payments for the more than 700 enforcement officers would cost the government RM2.338mil a year.