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Implementation of Automatic Reduction on Compound


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Starting from July 1, 2019, the Companies Commission of Malaysia (SSM)  has implemented the automatic compound rate reducing method as a remedial solution for the compound within a specified period. This approach also aims to encourage the corporate community in complying with the provisions of the Companies Act 1965 and the Companies Act 2016.

The main purpose of implementing this new method is to provide benefit to the corporate community to enjoy a higher compound reduction rate without having to submit an appeal to the SSM.

The mechanisms and the rate of automatic compound reduction are as follows:

Payment Period From Date of Compound

Reduction Rate From the Original Compound Issued

1 to 40 days


41 to 60 days


61 to 90 days


91 to 180 days


The reduction of the compound will automatically be given to the compounds issued for offences under the Companies Act 1965 and the Companies Act 2016, except:

  • Compound for Out-of-Court or Investigation Papers issued by the Prosecution & Litigation Division and State / Branch Office;
  • Expired Compounded but regenerated for payment process; and
  • Compound that has been given a reduction through the previous appeal process.

Reductions will be given during the payment made at any SSM counter throughout Malaysia.

SSM as a corporate regulator is responsible to ensure a high level of compliance under the provision of the Companies Act among the corporate community in Malaysia as good corporate governance can ensure the continuity and integrity of a company.