What are the required documents for cessation of firm of estate agency?
This process can be messy if you do not keep your documents in proper manner over the years.
The documents are:
- Form V - for cessation of firm
- Statutory Declaration Rule 25M, VAEA Rules, 1986
- Form O - Certificate of formation of firm "Authority to Practice as a Firm"
- Advertisement to show the notice of cessation of firm with date, which newspaper and what language it was advertised.
All the above are needed for submission to [email protected] not later than 14 days from the date of cessation of firm, such cessation to be advertised in at least one national language and one English Language national daily newspaper.
If you cannot locate the old Certificate of Form O, a police report is required to be lodged as proof of record.
Having submitted to Board, if without further issues, will be terminated with official email.
Following general steps are advisable:
1. Notify BOVAEP in Writing: Prepare a formal letter addressed to the Board, informing them of your intention to cease operations. Include pertinent details such as your firm's name, registration number, and the effective date of cessation.
2. Settle Outstanding Obligations: Ensure all professional responsibilities are fulfilled. This includes completing ongoing transactions, settling financial commitments, and addressing any client-related matters to prevent future disputes.
3. Close Client Accounts Properly: Handle the closure of client accounts with due diligence. Return any client funds held in trust and provide clients with final statements or reports as necessary.
4. Maintain Records: Retain all business records, including transaction documents and financial statements, for a period as stipulated by Malaysian law. This is crucial for potential future references or audits.
5. Comply with Tax and Legal Requirements: Inform the Inland Revenue Board of Malaysia (LHDN) about the cessation and settle any outstanding taxes. Additionally, if your firm is registered with other statutory bodies, notify them accordingly.
6. Update Business Licenses and Permits: Cancel or update any business licenses, permits, or registrations associated with your real estate agency to reflect the cessation.
7. Inform Employees and Stakeholders: Communicate the decision to cease operations to your employees, partners, and other stakeholders, ensuring compliance with employment laws and contractual obligations.
Sample of the documents are attached below:
Statutory Declaration under Rule 25M
Form V - Cessation of Firm
Advertisement to show the Newspaper Name, Language and Date of Publication
Certification of Formation - FORM O - Authority to Practice as a Firm
MOST PEOPLE WOULD HAVE LOST THIS FORM O "Authority to Practice as a Firm" - hence, you need to lodge a POLICE REPORT to satisfy the documentation for application of cessation of firm. There is another FORM Q - which is the annual renewal of firm "Authority to Practice". This Form Q is not required when submitting of cessation of firm.
The above process is carried out for cessation of firm, NOT cessation of practice of a Registered Estate Agent.
The cessation of practice of a Registered Estate Agent is another process. Normally, a REA might want to cease his firm practice but this does NOT mean he wants to stop practicing as REA. He might carry on estate agency practice with his friends in a group practice - mega firms. This is like a Medical Doctor ceases his own Clinic Practice and join a Hospital practice. Thus, cessation of firm practice is common but, cessation of own personal practice as REA is rather rare.
In most cases, the REA carries on practice until his end of time - due to death or other medical reasons.