Kedah and Kelantan are among five teams who risk missing out on next year's Malaysia Super League (MSL) after their applications for club licences were rejected.
Felda United, Melaka United and Sarawak are the other sides who failed to earn the right to compete next season, falling foul of Football Association of Malaysia (FAM).
Another seven teams -- Johor Darul Ta'zim (JDT), Pahang, PKNS FC, Penang, Selangor, Perak and T-Team -- have been granted licences to compete in 2018, following a special FAM meeting on Aug. 24.
It could be double trouble for reigning Malaysia Cup and FA Cup champions Kedah, who also face expulsion from the 2018 AFC Cup for failing to pay US$100,000 in past wages to former coach David Mitchell after FIFA ruled in favour of the former Australia international.
"There are six criteria required for a team to be granted a club license. They must pass the sporting, infrastructure, personal administrative, legal, business and financial criteria, as stated in FAM club licensing rules," FAM secretary-general Datuk Hamidin Amin said in a statement.
"Teams who failed to secure their club licence have been informed, and they can still make an appeal. Their appeal will be heard in the near future."
The five teams have until Oct. 31 to secure their club licensing, or risk missing out on competitive football altogether.
FAM's club licences are valid for a year and can be revoked if the teams breach any of the regulations.
This year, the national body made it mandatory for top tier teams to complete their licences to increase the level of club administration and professionalism in the country.
Kelantan stand the biggest risk of expulsion from the MSL next year -- not only because they have failed to fulfill the six criteria, but also for their failure to settle outstanding salaries of past and present players. Earlier this season, they were docked six points, which was reduced to three on appeal.
Selangor, PKNS FC, Pahang and JDT, meanwhile, have already secured their AFC club licensing should they make it to the tournament, or even the AFC Champions League.
Should Kedah fail to make full payment to past coach Mitchell, as instructed by FIFA, they will be expelled from next year's AFC Cup. If eligible, Kedah and JDT could be joined by Selangor or Pahang as Malaysia's third representative in the regional competition -- depending on who finishes second in the 2017 MSL.
Pahang are a point behind Kedah in third, while Selangor sit fifth, four points adrift.