So you're looking to dissolve your company. There are many different reasons to want to do this, but one thing's for sure, you're looking for a painless, quick, easy way to do it. Give us a call if you need help from a certified company secretary to dissolve your company.
How do you Dissolve a Company in Malaysia?
There are a few ways to close down your business in Malaysia. Which you choose to do will depend on your business and its position at the time of closing. Some of the options include:
1. Striking Off a Company
The simplest and most cost-effective way to dissolve your company is by applying to the Companies Commission of Malaysia (SSM) to 'strike off' your company pursuant to section 550 of the Companies Act 2016.
To be considered for strike-off, your company must:
not carry on business/operations (and must not intend to do so);
have no assets or liabilities, including any outstanding charges in the Register of Charges;
have no outstanding penalties or compounds relating to the Act;
have no outstanding tax or other liabilities, and have no debts to any government department or agency;
not have made any return of capital to shareholders (including dividends);
ensure your information is up-to-date with the Registrar;
not be involved in any impending legal proceedings; and
not be a holding company or a “Guarantor Corporation”.
If your company meets all the above requirements, you can expect to have your company struck off the register in around 1 year.
Some drawbacks to using this method include:
No control over the closing down of the company as the SSM have complete control over the decision whether or not to strike off the company
If someone has a legal grievance against the company, they can apply to reinstate the company within a 7 year period of the striking off
Though the company will cease to exist after the strike off, any liabilities incurred during the course of operations will still remain, and are actionable, against any director, officer, or shareholder of the company.
2. Members' Voluntary Winding Up
This method is also known as going into liquidation, and can be a longer and more tedious process than striking off.
Where a company does not meet the requirements for a strike off, its shareholders/officers may instead opt for this method to dissolve the company. The process involves appointing a liquidator, who deals with the remaining assets of the company and divides them up between the shareholders or creditors (depending on the financial position of the company upon its closing down).
This process must be approved by the shareholders of the company and subsequently reported to many different parties such as:
the Board;
the Company Secretary;
auditors;
tax agents;
various government agencies including:
Employees’ Provident Fund (“EPF”);
Inland Revenue Board (“IRB”);
Social Security Organisation (“SOCSO”);
Royal Customs of Malaysia (“RCM”); and
Human Resource Development Fund Malaysia (“HRDF”)
If the liquidation process takes longer than a year, reporting must then also be done via an annual meeting of members.
Not sure which method suits your company best? Speak to a qualified company secretary with years of experience. Call us today and book a consultation.