5 Checks You Should Conduct on SSM Registered Companies

Before entering into any business arrangement—be it a contract, investment, partnership, or joint venture—it's crucial to conduct a thorough background check on the company you're dealing with. Ensuring that a company is SSM registered and understanding its financial and legal standing can help you avoid potential risks and secure your business interests.

Check With SSM Search To Be Safe Rather Than Sorry

Verifying a company’s legitimacy is essential to safeguard your business from unreliable or fraudulent entities. Some businesses may fail to fulfill their contractual obligations, while others might engage in illegal activities such as money laundering. Such scenarios can lead to significant economic and reputational losses for your business. Conducting background checks on SSM registered companies can help you confirm the authenticity of the information provided by the business and protect your company from potential future complications.

Not all transactions require extensive background checks, but it is recommended to perform these checks for significant deals, especially those involving substantial assets or liabilities, or those outside your ordinary course of business.

These are the 5 essential background checks for SSM registered companies:

1. Check Key SSM Information via the SSM Search Directory

The SSM Search directory provides essential SSM information about any business entity registered in Malaysia. This includes:

• The full name of the business as SSM registered
• The business registration number
• The current status of the business (e.g., live, struck off, dissolved)
• The registered address
• The industry in which the business operates
• The last filing dates of Annual Returns and financial statements

Deal only with businesses that are identified as "live", which means they are still operational. If you can't reach a company at its listed address or suspect it has moved without updating SSM, proceed with caution.

2. Crosscheck against the Company’s Business Profile

The Business Profile available on SSM Search offers more detailed SSM information, including:

• The registration date of the business
• The nature of the business activities
• Details of the owners, directors, and partners
• Information about shareholders and paid-up capital

This allows you to verify the information provided by the company and ensure its authenticity.

3. Assess Corporate Compliance and Financial Health

For a deeper understanding of the company’s compliance record and financial health, consider obtaining its Corporate Compliance and Financial Profile. This report includes:

• Compliance with statutory requirements
• Key financial statements, such as the balance sheet, profit and loss, and cash flow statement
• Assessment of the company's liquidity, profitability, operating efficiency, and solvency
• Auditor’s opinions on the financial statements
• Directors’ statements on the accuracy of the accounts

Such a profile is invaluable for evaluating the financial stability of the SSM registered company and its ability to meet its obligations.

4. Conduct an Insolvency Search

Before engaging with a business, it’s wise to check its insolvency status. An insolvency search will reveal whether the company has been subjected to a winding-up order by the court. If a company is in liquidation, it’s likely unable to meet its financial obligations, making it a risky partner for any transaction.

5. Check the BNM Watchlist

The Central Bank of Malaysia (BNM) maintains a Financial Consumer Alert List, which includes companies that are neither authorized nor approved under relevant laws and regulations. Checking this list can help you avoid dealing with entities that might engage in unauthorized activities.

Conducting these five essential checks on SSM registered companies can help you avoid pitfalls and ensure that you are partnering with legitimate and financially stable businesses. By using tools like the SSM Search API and performing regular SSM online checks, you can access up-to-date SSM information that will empower you to make informed decisions. Remember, a little due diligence can go a long way in protecting your business from unnecessary risks.

Contact SSM Search team at 03-4813 8388 or customercare@ssmsearch.com to learn more.