HAVE these companies gone out of business? Are they still operating? Are they complying with the country’s laws?
These questions came to my mind when I was reading the Investment Promotion Authority’s (IPA) announcement about its intention to remove companies that have not been submitting their annual returns for the last 19 years.
The IPA said that out of about 65,000 companies registered in the country, 55,000 or 90 per cent had failed to submit their annual returns.
And the IPA is removing or deregistering more than 5,000 companies this month!
Is there any administrative penalty for non-compliant companies? There should be some penalties applied to non-compliant companies.
They should be slapped with some penalties for failing to submit their statutory required information.
It’s not good to just remove those companies and then we don’t know where they are; what they are doing, whether they have gone out of business, still operating, or whether these companies are still complying with the country’s laws (if they are still operating).
I believe the IPA requires companies to report their returns every year, including updating the changes to their business names, ownership, mergers, exits etc…
This reflects the operational status of the company. If there are some compliant-enforcement tools entrusted to the IPA, it should fully use them to make the companies comply with the country’s laws and regulations.
Such legal backing will give more teeth to the IPA to bite those companies that are not complying with the country’s laws, and hopefully make them be more compliant.
If IPA was in a position to correctly identify and make these companies fully compliant, but was unable to do so in the past, then the recent revelation was an exposition of its failure.
Proper screening and registration of companies is important as it will make sure companies are conducting their business within the parameters set by the laws of the country.
We cannot allow companies to operate unidentified. Proper accounting and consistent checks improve transparency and provides a conducive environment for both local and overseas businesses.