Comprehensive Guide of Exempt Private Company (EPC)

Establishment requirements, benefits, and compliance obligations—all in one!

An Exempt Private Company (EPC) is a type of private limited company (Sdn. Bhd.) that must fulfil the following conditions:

• Its shares must not be directly or indirectly owned by any corporate entity.
• The total number of shareholders must not exceed 20.

Advantages of an Exempt Private Company (EPC):

1. Exempted from submitting a full set of audited financial statements (however, an EPC Certificate must still be lodged with the Companies Commission of Malaysia (SSM)).
2. Permitted to provide loans to directors or related parties.
3. Complete confidentiality of financial information.

Disadvantages of an Exempt Private Company (EPC):

1. May face difficulties in applying bank loans.
2. Prohibited from issuing shares to any corporate entity.
3. The number of shareholders must not exceed 20.

Auditor’s Statement

The auditor is required to declare whether:

• Proper accounting records have been maintained.
• The financial statements comply with applicable requirements.
• The audit report contains any reservations or explanatory notes.
• The company is able to settle its debts as they fall due.

How to Submit an Exempt Private Company Certificate?

An EPC must annually file a certificate with the Registrar, signed by its directors, auditors, and secretary, confirming its exempt status and that:

• The company continues to satisfy all EPC qualifying conditions.
• Audited financial statements have been duly distributed to shareholders.
• The company remains solvent and able to settle its debts as they fall due.

**Last Updated on 22.08.2025