BUSINESS REGISTRATIONREFORM - THE SSM

PERSPECTIVERokiah Mohd Noor

Deputy Chief Executive Officer,Companies Commission of Malaysia

HISTORY ON THE FORMATION OF SSM30 June 1999

The Cabinet instructed for the formation of SSM

ROC(Est. 1898)

ROB(Est. 1898)

COMPANIES COMMISSION OF MALAYSIA ACT 2001 (Act 614)

• Established in April 2002

BUSINESSES REGISTERED

3,779,415

COMPANIES REGISTERED

839,853

As at 28 February

2009

AREAS OF REFORMS UNDERTAKEN (2006-2008)

Information & Communication

Technology

Stakeholder Management

Enforcement Operational Enhancement

Processes

Organisation Transformation

Process

Education

1. Establishment of Enforcement Office

2. Enhancement of Manpower

3. Balance Enforcement

4. Improved Compliance with the legal requirements

1. Improvement in counter service

2. Introduction of e-Services

3. Introduction of Business Registration Mobile Counters & Circuit Counters

4. Introduction of e-Enforcement

5. ICT Strategic Plan (ISP)

1. Organisational Transformation Processes (OTP)

2. Introduction of Human Capital Initiatives

1. Establishment of Companies Commission of Malaysia Training Academy (COMTRAC)

MOTIVATORS FOR REFORM

Globalisation and liberalisation

Information & Communication

Technology

Change in Business Trends Change in

public service delivery systemStakeholder

Management

DRIVERS FOR REFORM

MISSION

VISIONKey Enabling

Strategy

SSM Strategic Direction

Plan 2004 - 2008

MISSION

NATIONAL AGENDA

ENFORCEMENT

MISSION

Pre-Reform

1. Emphasis on Operational Issues

2. Lack of Focus on Enforcement

3. Low Compliance with legal requirements

4. Lack of corporate governance by Companies

Areas of Reform Post-Reform

1. Balance Enforcement – balancing between adequate regulatory control with enhancement of economic growth

2. Focus on Enforcement – identification of high risks areas to target concentrated detection/surveillance measures. Shift towards quality from quantity.

3. Leveraging on Technology – to achieve benefits of remote, off site and instant data processing – introduction of e-Enforcement

1. Establishment of Enforcement Office

2. Upgrading of Investigation Section to Division

3. Introduction of Complaints Section

4. Re-structuring of the Compliance Division

5. Increase in manpower combined with increase in technical competency (Prosecution section strengthened to 15 PO from 6 PO in 2004)

ENFORCEMENT

MISSION

Pre-Reform

1. Emphasis on Operational Issues

2. Lack of Focus on Enforcement

3. Low Compliance with legal requirements

4. Lack of corporate governance by Companies

Investigation Prosecution

1. IP opened from 2004-2008

• 736

2. IP disposed from 2004-2008

• 647

Note: When an IP is opened it denotes that a full blown investigation is warranted as the matter involves complex and serious issues of non-compliance, corporate governance or elements of corporate fraud.

1. 2004-2008 – 24,374 cases prosecuted

2. 17,000 of these cases concern various issues of corporate governance (including breach of mandatory reporting requirements under the Companies Act 1965)

8

COMPLIANCE RATE

OPERATIONAL ENHANCEMENT PROCESSES

MISSION

VISION1. Constrains on public

accessibility to SSM

2. Menace of Touts/Unscrupulous Management Companies

3. Many businessmen unaware of legal requirements to register their businesses

4. Labour Intensive Processes – data entry, scanning of documents

5. Storage of documents

6. Time consuming processing of data

Pre-Reform Areas of Reforms Post-Reform

1. Introduction of e-Services

2. Introduction of Business Registration Mobile Counters & Circuit Counters

3. Introduction of e-Kiosks

4. Introduction of e-Enforcement

5. Introduction of ISP

1. Creating different modes of conducting business with SSM

2. Introduction of new, faster services

3. Eradication of touts/unscrupulous management companies

4. Reduce labour intensive processes

5. Reduce issue on Storage of document/data

6. Reduce time taken for processing of data

•Reduction of Manual Processes,

•Scanning of documents•Storage of documents/data•Faster processing of data

IMPROVED BUSINESS METHODS (e-SERVICES)

Company e-Lodgement

Business e-Lodgement

BENEFITS OF e-SERVICES• 24/7• Fast, efficient, facilitative• Real time data/information• Beyond counter• Multi-payment channel

CHALLENGES FACED FOR e-SERVICES

• Slow take-up rate – Create awareness, education, free hands-on training, introduce mandatory e-Filing, closure of counters

• Low IT Literacy

IMPROVED BUSINESS METHODS (e-Lodgement)

Take up Rate of Business e-Lodgement (Nationwide)

0%1%2%3%4%5%6%7%8%9%

10%

Hundreds

May'07

Jun Jul Aug Sept Oct Nov Dec Jan'08

Feb Mac Apr May June Jul Aug Sept Oct Nov Dec'08

Business

IMPROVED BUSINESS METHODS (e-Lodgement)

Take up Rate of Companies e-Lodgement (Nationwide)

0

0.2

0.4

0.6

0.8

1

Jan'08

Mac May Jul Sept Nov

Companies

IMPROVED BUSINESS METHODS (e-Info)

Achievement of e-Info Service from July 2006 – February 2009

Comparison on Information Supply Over-the-Counter (OTC) and SSM e-Info Before and After Closure of Counters (HQ & 2 State Offices)

0

50000

100000

150000

200000

250000

Transactions

2006

2007

2008

2009

Month Application OTC % Application via e-Info (online) %

Average Jan-Sept applications (before closure of counters)

60,948(80%)

-35%(-21,303)

15,637(20%)

+115%(+17,980)

Average Oct, Nov & Dec applications (After closure of counters at HQ & 2 State Offices)

39,645(54%)

33,617(46%)

BUSINESS REGISTRATION MOBILE COUNTERS (BRMC)

Purpose of Introducing these initiatives was to allow the petty traders new avenues for conducting business with SSM, dissemination of

information and informing on the requirements of the law.

BENEFITS

• Improving of service delivery

• Reaching out to stakeholders and clients – beyond counters

• e-Enabled – Mobile & Remote Access Service (MoRSe)

• Carried out nationwide – emphasis on remote areas

• Collaboration with local councils, agencies

• Enhancing stakeholder awareness

ISSUES FACED

• Touts. Management Companies unhappy with BRMC/Circuit Counters/e-Kiosks

• Cuts into their livelihood

• Death Threats against SSM officers

MOBILE BUSINESS REGISTRATION & CIRCUIT COUNTER ACTIVITIES 2006 – 2008

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YEAR2005 2006 2007 2008

No of Locations 10 118 265 1,277

No of Registrations

1,963 2,272 4,876 19,759

Overall BRMC progress

YEAR2005 2006 2007 2008

No of Locations 10 118 265 1,277

No of Registrations

1,963 2,272 4,876 19,759

YEAR2007 2008

No of Registrations

779 1,210

No. of Renewals 4,151 5,954

Overall Circuit Counters progress

ORGANISATIONAL TRANSFORMATION PROCESSES

MISSION

VISION1. Lack of adequate infrastructure

2. Duplicity of tasks

3. Centralisation of processes

4. Old world mentality

5. Poor work culture

6. Slowness in delivery

7. Lack of Human Capital Initiatives

8. Poor Project Management

9. Insufficient Specialised Manpower

Pre-Reform Areas of Reforms Post-Reform

1. New Clients’ Charter

2. Decentralisation of processes

3. Introduction of Employee Competency Requirement

4. Succession Planning

5. Introduction of KEEP

6. Introduction of Key Performing Indicators & Key Performance Targets (KPI & KPT)

7. Introduction of a Knowledge Management Unit

8. Introduction of Project Management Office

9. Recruitment of Subject Matter Specialists

1. Reviewing of internal processes

2. Improvement of Service Delivery

3. Reform in Human Resources Initiatives

ORGANISATION TRANSFORMATION PROCESS

Continuous knowledge & skill enhancement

ORGANIZATIONAL RE-BRANDING ‘Towards a New SSM’

New corporate cultureTeamwork

IntegrityResult driven

Customer oriented

Services & Corporate resources

ICTTraining

Academy

Change of Work Culture

Organizational restructuring

Work process re-engineering

Enablers

RESULT OF REFORMActivity New

Client Charter

PreviousClient

Charter

BUSINESS REGISTRATION

Approval of business name 1 hour 3 days

New business registration 1 hour 3 days

Renewal of business registration 15 mins 1 hour

Registration for termination of business 15 mins 1 day

Registration of changes in registered particulars of business

1 hour 1 day

COMPANY REGISTRATION

Approval of company name 1 day 5 days

Incorporation of a new company 1 day 5 days

Conversion of status 1 day 5 days

Change of company name 1 day 5 days

Commencement of business for public companies 1 day 5 days

Registration of charge 2 days 5 days

Approval of a trust deed 5 days 14 days

Registration of prospectus 3 days 14 days

Supply company/business information via computer printout

30 mins 1 hour

Uncertified copy of company documents 30 mins 1 hour

Certified copy of company documents 1 hour 3 hours

WO

RK P

ROCE

SSES

Work process re-engineering

Note: Time taken begins from the moment payment is received until the certificate is issued.

EDUCATION

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Pre-Reform Area of Reform Post-Reform

1. Directors and Company Secretaries lack knowledge on their duties & responsibilities

2. Lack of training facilities to be used as training & awareness vehicle

3. Lack of facilities for internal training for employees

4. Lack of a centralised Knowledge Centre

1. To establish a training academy for the purposes of educating the stakeholders and the employees

2. To conduct quality training programmes for internal, external and international participants.

3. To provide the necessary infrastructure to support the training academy and programmes.

4. To keep abreast with regulatory & governance development.

1. Corporate Directors Training Programme (CDTP)

2. Licensed Secretaries Training Programme (LSTP)

3. Programmes on Corporate Governance & Enforcement

4. Conducting collaboration programmes with stakeholders

5. Conducting awareness programmes with the public

6. Providing internal training for employees

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IMPORTANT LESSONS LEARNT

Planning Implementation Buying-in/

Awareness

•Studying of internal & external requirements

•Have back up plan

•Studying the needs and engaging the customers

or users

•Either in phases/gradual or

“big bang” approach to suit local

environment

•Effective monitoring

•Stakeholders engagement

•No matter how good the system is, if there is no buy-in by the users, the initiatives will not work

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WAY FORWARD

Law Reform Improving the business methods

1. Reviewing of current legal framework to modernise, simplify the procedures and reduce the costs of doing business:

• Companies Act 1965 – Corporate Law Reform Committee (CLRC)

• Registration of Businesses Act 1956

2. Introducing new business vehicles – e.g. Limited Liability Partnership

1. Organisational Transformation Processes

2. Introducing new and improved enhancements

3. Advisory Services

4. One stop information centre

5. One stop business centre

6. Business research centre/knowledge hub

7. Continuous Product Innovation

THANK YOU