‘More new businesses than those closed due to Covid-19 pandemic’
KUCHING: The number of new business entities registered is far more than those closed due to effects of Covid-19 pandemic, said Minister of Entrepreneur Development and Cooperatives Dato Sri Wan Junaidi Tuanku Jaafar.
According to Wan Junaidi, the Companies Commission of Malaysia (SSM) has recorded a total of 281,781 registration of new businesses entities between March and October this year, compared to 31,190 business entities have filed for cessation within the same period.
He said a bulk of the newly registered business entities consists of sole proprietorships and partnerships (89.3 per cent), followed by companies (9.8 per cent) and limited liability partnerships (0.8 per cent).
“The official statistics highlighted the fact that the number of new business entities registered have significantly outweighed the number of business entities that ceased operations despite the challenges faced by businesses due to Covid19 pandemic and Movement Control Order (MCO),” said Wan Junaidi in a press statement yesterday.
Wan Junaidi said SSM has also taken the initiative to revoke dormant companies by sending
notices under Section 551 of the Companies Act 2016 to 35,944 companies.
Section 551 grants the right to the shareholders of the company to apply to SSM to strike off the company.
“Undeniably, the impact of Covid-19 pandemic and subsequent MCO was immediate on businesses, especially the small and medium enterprises (SMEs),” said Wan Junaidi.
Meanwhile, Wan Junaidi said surveys conducted by SME Corp Malaysia and the Ministry of Entrepreneur Development and Cooperatives in May and August this year indicated that the percentage of businesses that have ceased operation was slightly lower in August this year at 1.4 per cent, compared to 1.6 per cent in May this year.
He said as the crisis is unprecedented for Malaysia even for the world, the only option that SMEs have is to adapt to the new normal and look for opportunities in adversity.
SMEs form 98.5 per cent (907,065) of business establishments in Malaysia.
Wan Junaidi said as the SMEs are the heterogeneous group that varies in size, sector and stages of business lifecycle among others, there can never be one-size-fitsall solution.
Thus, he said the government has long realised the need for a strong framework for SME development to garner optimum results from various initiatives to enhance economic growth.
This is reflected by the establishment of the National SME Development Council (now known as National Entrepreneur and SME Development Council (NESDC), he added.
In 2020, Wan Junaidi said a total of 211 entrepreneurship and SME development programmes are being implemented with a total allocation of RM12.9 billion as reported by 17 ministries and 50 agencies.
Noting that the Government has been actively engaging the SMEs throughout the ordeal to gauge their most current condition and needs, he said the SMEs should take advantage of this consultative approach to communicate their needs reasonably.
“Every party must assume their part well in order to revive the economy within the shortest time possible,” he added.