Yayasan or also known as Malaysian Foundation can be established with the Companies Commission of Malaysia (CCM) and it is one of two types of companies limited by guarantee (CLBG) regulate by the Companies Act 1965 .
Yayasan is an organization that is established exclusively for charitable purposes without any profit oriented.
The Companies Act 1965 requires an initial fund of RM1 million cash available as a main condition for the foundation to established.
The liability of yayasan is limited. It is limited to the amount of guaranteed made by its members in the event of foundation winding up insolvent.
The foundation also has a separate legal entity like a normal human being. They can borrow, buy, rent, enter into contracts, sue, be sued, own property and real estate in the yayasan’s name without involving its owner’s name.
All matters relating to the establishment of the yayasan until its closure should be done at the registrar of companies office or also known today by the name of the Companies Commission of Malaysia (CCM) which has its headquarters at Menara SSM, KL Sentral, Kuala Lumpur.
In order to set up a yayasan, a minimum of 2 trustee of the yayasan who have a residential address in Malaysia is needed. In addition, the minimum 2 members are required to complete the establishment process. However, the trustee and members of the yayasan can be among the same individual.
The yayasan is required to appoint at least a company secretary as stated in the Companies Act 1965 to whether to employ a company secretary to work with the yayasan (internal company secretary) or seek the services of the company secretary (external company secretary).
In order for this yayasan to be established, the approval of the minister in the Ministry of Domestic Trade, Cooperatives and Consumerism Ministry (KPDNKK) should be obtained prior to using the word ‘yayasan’.
For this purpose, a complete paper work about it should be prepared and submitted to CCM for consideration.
If the Minister is satisfied and agreed to approve the use of the word ‘yayasan’, a certificate will be issued and this marks the establishment of the yayasan process can be continued without any problems.
Once the foundation is established, an initial fund of RM1 million in cash above should be deposited in the yayasan’s account within 6 months after the date of its establishment.
Yayasan will also need to apply for the tax examption from the Inland Revenue Board of Malaysia (IRB).
At the end of every year, the yayasan is required by the Companies Act 1965 to:
- Complete the audited reports and lay before the Annual General Meeting (AGM) of the yayasan.
- Holding an Annual General Meeting of the yayasan.
- Lodge a yayasan’s annual report to the CCM
The yayasan’s failure to comply for three mandatory requirements above may cause the yayasan and its trustee be compounded by CCM and if convicted in court can lead to a higher penalty.
Yayasan company will continue to exist even with any changes that occur to its member’s. It is also will not close despite the death of all of its members. It will continue to exist unless the proper closure procedure against it was done either through the CCM or the courts.