How to Close a Sdn Bhd Company in Malaysia: A Comprehensive Guide
In this article, we delve into the Strike-Off option, one of the most cost-effective ways to close a Sdn Bhd company during these challenging times for businesses in Malaysia. Under sections 549(a) and 550 of the Companies Act 2016, a Sdn Bhd company in Malaysia can be struck off. Here, we summarize the requirements and process for striking off a company in Malaysia.
1. Initiating the Company Strike-Off Process
Typically, a director, member, or liquidator initiates the strike-off application in Malaysia. Additionally, the Registrar of Companies has the authority to strike off a company on his own by examining the company’s records in the register.
2. Requirements for a Company Strike-Off Application
To proceed with a strike-off, the following criteria must be met:
- Shareholder Resolution: A resolution must be passed by the shareholders to strike off the company, confirming that it is no longer carrying on business or in operation. If shareholders are untraceable, attempts to locate them must be documented and attached to the application.
- No Assets or Liabilities: The company must have no assets or liabilities, with supporting financial statements submitted to the Registrar.
- No Outstanding Charges: The company must have no outstanding charges in the Register of Charges kept by the Registrar.
- No Penalties or Compounds: All penalties or compounds under the Companies Act 2016 must be settled.
- No Outstanding Taxes: The company must clear all outstanding taxes and obtain a tax clearance before filing the strike-off application.
- Updated Information: The company’s latest information must be updated with the Registrar.
- No Legal Proceedings: The company should not be involved in any legal proceedings within or outside Malaysia.
- No Return of Capital: The company must not have returned any capital to shareholders. If it has capital, it should go through a voluntary winding-up process.
- Not a Holding Company or Guarantor Corporation: The company should not be a holding company or a guarantor corporation.
3. Company Strike-Off Procedure
For applications under section 550 of the Companies Act 2016, the applicant must complete the Declaration-Application to Strike-Off Company in Schedule B of Practice Directive 1/2017 (Appendix 1) and ensure all requirements are met before submitting the application. It is advisable to seek assistance from a licensed Company Secretary in Malaysia.
4. Post-Application Process
After submitting the documents, the Registrar will issue a notice indicating a public notification of the intended strike-off if no objections are lodged within 30 days. Upon expiry of the notification period, the Registrar publishes the company’s name in the Federal Gazette, indicating it has been struck off. Once struck off, the company ceases to exist and cannot conduct business. However, the liabilities of directors, officers, or members remain enforceable for past misconduct or legal breaches.
5. Grounds for Objection
Anyone can object to a strike-off application on the following grounds:
- The company is still carrying on business or has reasons to continue existing.
- The company is involved in legal proceedings.
- The company is in receivership or liquidation.
- The objector is a creditor, member, or has an undischarged claim against the company.
- The objector intends to pursue a right of action on behalf of the company.
- Other reasons that make it unjust or inequitable to strike off the company.
6. Withdrawal of Company Strike-Off Application
The applicant can withdraw the strike-off application within 30 days from the notice or publication date by lodging a Notice of Withdrawal of Striking Off Application to the Registrar, including the reasons and supporting documents.
7. Reinstatement of a Previously Struck-Off Company
If dissatisfied with the Registrar’s decision to strike off the company, any person or shareholder can apply to the court to reinstate the company’s name into the Register within seven years from the strike-off date.
Conclusion
Striking off a Sdn Bhd company in Malaysia is a structured process governed by the Companies Act 2016. By following the outlined steps and ensuring compliance with the requirements, Sdn Bhd companies can effectively close down while mitigating any legal or financial repercussions. Always consider consulting with a licensed Company Secretary to navigate this process smoothly.