DISSOLUTION

DISSOLUTION

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DISSOLUTION

Dissolution

A company’s existence can only be terminated if it is:

•struck off the register

•dissolved as a result of winding up
•(Special case – S370(2)(d) – in a scheme of amalgamation or
reconstruction)

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STRIKE OFF
DISSOLUTION

deregistration/Strike off

Initiated by:
•CCM’s own initiative (s549)
•written application from the company (s550)

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DISSOLUTION

Deregistration/ Strike off - CCM’s initiative (s549)

GROUNDS OF DEREGISTRATION

(a) the company is not carrying on business or is not in operation (based on information in records of the
company under the Registrar’s custody)
(b) the company has contravened Co Act;
(c) the company is being used for unlawful purposes or any purpose prejudicial to or incompatible with
peace, welfare, security, public interest, public order, good order or morality in Malaysia;
(d) in any case where the company is being wound up and the Registrar has reasonable cause to believe that
—
(i) no liquidator is acting;
(ii) the affairs of the company are fully wound up and for a period of six months the liquidator has
been in default in lodging any return required to be made by him; or
(iii) the affairs of the company has been fully wound up under a winding up by the Court and there
are no assets or the assets available are not sufficient to pay the costs of obtaining an order of
the Court dissolving the company.
DISSOLUTION

Deregistration CCM’s initiative (procedure (s551))

Company may object within 30 days S552 (c) Co in receivership or liquidation; or both;
Fee RM300.00 (d) a creditor or a member or a person who has an
Notice of Intention To Object Striking Off Application undischarged claim against the company objects;
Grounds (e) A person intends to pursue, a right of action on behalf
(a) Co still carrying on business or other reason for it to of the company objects
continue in existence; (f) it would not be just and equitable to remove the
(b) Co is a party to legal proceedings; company from the register

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COMPANY/ Notice S551(1) After 30 days – No objection – public
notice of intention to strike off
LIQUIDATOR 1

Gazette 4 Percetakan After 30days

notification Nasional (a) receives a confirmation that the company is no longer
3b carrying on business or is not in operation;
Berhad
(b) receives no reply from the company to the notice referred
Officially in (1);
dissolved 3a (c) receives no objection to the notice and public notification
referred in (1); or
Retain registers, books, statutory records, Strike (d) any objection has been withdrawn
accounting records and documents as (e) objection based on incorrect fact
required under the CA 2016 for a period of 7
off
(f) CCM not satisfied with the reasons as to why the company
years after the company has been struck-off should not be struck off.
DISSOLUTION

Effects of deregistration/strike off under s549

554. the company shall be dissolved, but—

(a) the liability, if any, of every director or officer and member of the company continues and may still be enforced ;
and
(b) the Court can still wind up the company if there is proof that the company has a property which can be realised.
(2) Where the Court issued a winding up order under paragraph (1)(b), the liquidator shall only be required to
discover and realise any assets of the company.
DISSOLUTION

Deregistration/ Strike off - own initiative (s550)

Conditions
a) The resolution of the shareholders have been passed for the initiation of the application to strike off the name of the
company from the register on the basis that the company is not carrying on business or not in operation - The resolution
must be enclosed together with the application to reflect the consent of the majority shareholders
b) The company has no assets and liabilities at the time when the application is made - If the company has not commenced
operation, the applicant must make the following declaration:
(i) That there has no transaction since the company was incorporated; and
(ii) That the company has not opened a bank account or if there is an account, that the account has been closed (the latest bank
statement is to be attached).
c) The company has no outstanding charges in the Register of Charges
d) The company has no outstanding penalties or offer of compounds under the CA 2016
e) The company has no outstanding tax or other liabilities with any Government Department or Agency
f) The information of the company with the Registrar is up to date
g) The company is not involved in any legal proceeding within or outside Malaysia
h) The company has not made any return of capital to the shareholders
i) The company is not a holding company
j) The company is not a “Guarantor Corporation”
ADDITIONAL REQUIREMENTS FOR AN APPLICATION BY COMPANY LIMITED BY GUARANTEE
Company limited by guarantee, in addition to the the above, must accompany the application with with its latest
audited financial statements.
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Deregistration/ Strike off - own initiative (s550)

• Declaration-Application to Strike Off Company

• Application Fees of RM 100.00
• Covering Letter – Stating reasons to support application
• Declaration by Applicant
• Individual - Resolution of majority shareholder
• Wholly-owned subsidiary – Letter of consent and declaration from holding company
COMPANY/ • Co-owned subsidiary (Individual and company) – Resolution of majority shareholders
LIQUIDATOR and a corporate representative certificate
• Latest Management Accounts (Balance Sheet and Profit & Loss Statement) certified
by the Director (in each page) / Latest Audited Financial Statements, in the case of an
application by a company limited by guarantee
• Waiver letters from directors/creditors
• Tax clearance (if applicable)
• Company Print-Out No withdrawal
Withdrawal can be made within 30 days
+ Notice of withdrawal of striking off application
+ Fee RM500.00 Strike
+ Reasons off
+ Supporting documents
WINDING UP
DISSOLUTION

winding up
Voluntary – initiated by the company Compulsory – winding up by the
• members’ voluntary winding up – when co is solvent court
• creditors’ voluntary winding up – when co is insolvent Through petition to the court by:
• the company;
• any creditor;
• contributory;
• the liquidator;
• Minister of Domestic Trade and Consumer Affairs;
Circumstances – members • Minister of Finance;
a. (With resolution passed at GM) • Bank Negara Malaysia; or
- duration fixed in constitution; • Registrar of Company.
- occurrence of events spelt out in constitution
Grounds:
• By special resolution
• fail to commence business
• suspend business
Creditors - insolvent • unable to pay debt
• directors acted in their own interest
• based on inspector’s report
• court’s opinion – just and equitable
• banking license - revoked
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DISSOLUTION

members voluntary winding up – time line

Date of
Commencement
Liquidator
5 weeks

Advertisement
21 days
10 days
1 2 3
7 days
Directors resolution Notice of meeting EGM

• Special resolution
• Declaration of solvency • Notice of Appointment and
• Statement of affairs Address of Liquidator
(Voluntary Winding Up
Befo
re EGM
DISSOLUTION
Creditors’ voluntary winding up – time line

+ Official receiver
• Statutory Declaration of inability of Notice of meeting of creditors consists

No
company to continue business and Liquidator • Detailed list of names of creditors and the amounts of their

tic
that meeting of the company and its

er
14 da claims:
ys

eso
creditors have been summoned • Instrument of appointment of proxy or representative: and

luti
• Notice of Appointment and Address • A formal proof of debt form

on
of Liquidator (Creditors’ Winding Up)

⁻ Resolution to wind up
14 day

1 2 21 days 3 ⁻ Appointment of liquidator

s

Directors resolution Notice of EGM

- EGM ⁻ List of creditors
- Creditors meeting1 4 ⁻ Statement of affairs

ys
⁻ Approval of liquidator

da
Creditors meeting

10
7d
ay
s

Interim liquidator
Date of commencement
Within 30 days
DISSOLUTION

winding up

Effect of voluntary winding up

442. (1) The company cease to carry on its business from the commencement of the winding up except
so far as is required in the opinion of the liquidator for the beneficial winding up.
(2) the corporate state and corporate powers of the company continue until it is dissolved.
(3) Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any
alteration in the status of the members made after the commencement of the winding up, is void.
DISSOLUTION

liquidator - Appointment
Who can be appointed as liquidator?
• Official Receiver (Director General of Insolvency (DGI) in capacity as Official Receiver);
or
• Private liquidator (an individual person whom is licensed to be a liquidator).
Private liquidator

• An approved liquidator under section 8 of CA

Qualification • Given his written consent to act as liquidator

(a) he is not an approved liquidator; (N/A in voluntary winding up)

(b) he is indebted to the company or related company in an amount exceeding
RM 25,000;
(c) he is an officer of the company; (N/A in voluntary winding up)
(d) he is a partner, employer or employee of an officer of the company;

Disqualification (e) he is a partner or employee of an employee of an officer of the company;

(f) he assigns his estate for the benefit of his creditors or has made an
arrangement with his creditors under any law relating to bankruptcy;
(g) if he becomes bankrupt; or
(h) if he is convicted of an offence involving fraud or dishonesty punishable on
conviction by imprisonment for three months or more. 15
DISSOLUTION

Liquidators
WHO CAN APPLY TO BE PRIVATE LIQUIDATOR?
1. A member of recognized professional body (S433(3)
(a) Malaysia Institute of Accountant (MIA);
(b) Malaysian Institute of Certified Public Accountant (MICPA)
2. a natural person;
3. citizen or permanent resident of Malaysia;
4. not an undischarged bankrupt;
5. has not been convicted of an offence relating to the promotion, formation, management or winding up of a corporation;
6. has not been convicted of an offence involving bribery, fraud or dishonesty punishable on conviction by imprisonment
for three months or more; and
7. does not have any pending legal action against him under any provision of CA 2016 or the laws specified in the First
Schedule of Companies Commission of Malaysia Act 2001.

The applicant have to submit Statutory Declaration signed by a Commissioner of Oaths together with the application to
verify that he has complied with the above requirements.
(i) The applicant must have at least five (5) years of accumulated (pre and post) working experience in insolvency practice
on full time basis.
(ii) Applicant must attach a sponsor letter from an approved
(iii) liquidator, who has supervised the applicant's work
(iv) The applicant must pass an oral assessment interview by the panel interviewers comprising representatives to be
determined by MOF.
DISSOLUTION

Liquidators
The role of the liquidator
• Investigate into the affairs and assets of the company, the conduct of its officers and the claims of creditors and third
parties
• Recover and realise the company’s assets in the most advantageous manner to the company
• Adjudicate the claims of the creditors and ensure an equitable distribution of the company’s assets in accordance to
the provisions of the Companies Act.

Interim Liquidators
(1) Appointed in Creditor’s Voluntary Winding Up
(2) have all the functions and powers of a liquidator subject to
limitations and restrictions prescribed in winding up.
(3) appointment continue for 30 days from the date of his
appointment or as the Official Receiver may allow
or until the appointment of a liquidator, whichever occurs first.
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Liquidator - Duties

Directors
To write to all directors notifying and advising
the of the cessation of their powers as directors

Cash To open liquidation cash book and to ensure

Book
that balances are regularly reviewed

Registered To change the registered office of the company

office
to that of the liquidator’s

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Liquidator - Duties

List of To settle list of contributories if there are any partly paid shares
contributories and call up the amounts payable

Company’s To take control of the company’s seal, documents of titles

seal and other documents of value

Company’s
To deal with the collection of debts due to the company and
assets take steps to take control of all other known assets and ensure
their security

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Liquidator - Duties

Debts
To pay debts of the company which have priority to
other debts (i.e. wages and salary of the employees)

Creditors To pay the ordinary unsecured creditors in full

To pay members any balance remaining according to

Members
their rights and interest

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DISSOLUTION

Contributories
Functions
Contribute to the assets of the company to an amount sufficient for payment of
• Company debts and liabilities
• costs, charges and expenses of the winding up
And for the adjustment of the rights of the contributories among the present and past
members.
Subject to:
Company limited by shares – unpaid call
CLBG – amount guaranteed

List of contributories:
(a) Past (<1 year and debt created before cessation as member) and Present Members:
(b) Legal Representatives of a Deceased Member:
(c) The Official Assignee or Receiver of a Contributory:
(d) Liquidator of a Body Corporate
(e) Directors/Managers by court order – due to has unlimited liability, contractual obligation)
DISSOLUTION

compulsory winding up

Date of
Presentation Commencement
of a petition High Court

Winding up
order
Creditors’
EGM meeting

• to appoint liquidator
• appointment of Liquidator • to appoint Committee of Inspection

Form 70

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DISSOLUTION
compulsory winding up (petition by creditors) – before petition
PETITION BY CREDITORS

1
DISSOLUTION
compulsory winding up (petition by creditors) – winding up order
PETITION BY CREDITORS
1

2
DISSOLUTION
compulsory winding up (petition by creditors) – liquidation
PETITION BY CREDITORS
2
DISSOLUTION
compulsory winding up – Committee of inspection
What is a committee of inspection? Duties and functions of COI
A committee of inspection is a committee which represents the • carry out a general oversight of the liquidator and approve
interests of all creditors of a company going into liquidation. liquidators’ fees and expenses;
• convene meetings of the committee of inspection to
Advantages of setting up a committee of inspection? discuss matters of concern in the liquidation; and
• COI can exercise control over liquidator and also protect the • assist the liquidator in carrying out their duties such as
rights of the company’s creditors. approving payments to certain type of creditors and/or
• COI can hold the liquidator to account in relation to the agreeing a compromise arrangement with creditors.
selling of assets, the level of fees the liquidator charges and
other such matters. These are important matters because Rights and powers of COI
they relate to what money creditors will receive. Among others, decide:
• The Court oversees court ordered liquidations but otherwise • on the liquidator’s fee;
committee of inspections are advantageous. • if the liquidator should continue the business of the
company; and
• if the powers of the directors should continue.

liquidator needs the sanction of COI to:

• pay any classes of creditors in full;
• make any compromise or arrangement with creditors; and
• compromise any debts and liabilities owed to the company.
DISSOLUTION
compulsory winding up – Committee of inspection (appointment)
Winding up by court
1
Liquidator
creditor or contributory
2

meetings of the creditors and contributories

Committee membership
3 creditors or contributories of the
company or persons holding—
(a) general powers of attorney from
committee of
 inspection
creditors or contributories; or
(b) special authority from creditors or
Voluntary winding up contributories, to act on such a
1 committee
meetings of the creditors

4 2
Review

3 Company
Appoint member
• £ 5 persons
DISSOLUTION
compulsory winding up – Committee of inspection
A member of COI can resign by notice in writing signed by him and delivered to the liquidator.
A member of COI can be removed by an ordinary resolution at a
meeting of creditors, if he represents creditors, or
meeting of contributories, if he represents contributories,
7 days’ notice should be given for the meeting.

Vacation of office
• becomes bankrupt or
• assigns his estate for the benefit of his creditors or
• makes an arrangement with his creditors under any written law relating to bankruptcy or
• is absent from five consecutive meetings of the committee without the leave of those members who
together with himself represent the creditors or contributories.

The continuing members may act if there are at least 2 continuing members

Liquidators can request creditors or contributories meeting to appoint/ remove a member of COI (7 days notice
before meeting)
DISSOLUTION

Winding up – creditors rights

Unsecured creditor - Any person who has lodged the proof of debt with the liquidator.
Proof of debt - a document stating the amount of debts owing by a company to a person (secured and unsecured)
supported by relevant documents.

Priority of repayments:
• cost and expenses of the winding up including taxed costs of a petitioner
• remuneration of the liquidator
• costs of any audit carried out
• employees compensation accruing under any written law before the commencement of winding up
• employees remuneration etc

The remaining balance will then be divisible amongst all pari-passu (equally).

Secured creditor retains the ability to enforce securities under the National Land Code where the company is in default.
Liquidation is usually treated as default allowing secured creditor to uplift and sell company assets over which they
have security.

When there is any shortfall, the secured creditor should file a proof of debt and in such an instance, the status is
changed to an unsecured creditor. However, if there is any surplus after deducting the secured creditor's debts, the
secured creditor has to give the remaining proceeds to the liquidator to be put in the company's estate