OCT 2022 – FEB 2023
CRG 660
Company Secretarial Practice
Topic 13:
Dissolution
MOHAMAD HAFIZ BIN HAJI ROSLI A.M. (M)
Lecturer
Faculty of Accountancy, UiTM Johor, Segamat Campus
Begin everything with
Niat and Dua…..
DUA FOR STUDYING
198
Company insolvency,
dissolution and restoration
©Professor Dr Zubaidah Zainal Abidin 2019
199 Cessation of companies
- section 432
Winding up
By order of Voluntary
the Court
Members’ Creditors’
voluntary voluntary
winding up winding up
Liquidator Liquidator
Company appointed Company appointed
is solvent by is by
members insolvent creditors
©Professor Dr Zubaidah Zainal Abidin 2019
200 Qualification of liquidator
❖Not an officer of the company
Not indebted to the (X)
company for an amount ❖ Not a partner, employer or
employee of X
exceeding RM25,000
❖Not a partner or employee of
an employee of X
Approved
liquidator
❑ Has not assigned his
estate for the benefit of his
creditors Not convicted of an offence
involving fraud or dishonesty
❑Has not made an punishable on conviction by
arrangement with the imprisonment for 3 months
creditors under any law or more
relating to bankruptcy
©Professor Dr Zubaidah Zainal Abidin 2019
201 Contributories
- section 435
When a company is wound up, every present and past members
shall be liable to contribute to the assets of the company to an
amount sufficient for payment of its debts and liabilities, and the
costs, charges and expenses of the winding up
Past Company Company Director of a Deceased
members limited by limited by limited or bankrupt
not liable shares guarantee company member
❑Ceased to be a No contribution No contribution Director whose ❑For a deceased
member for one required from any required from any liability is member, the
year or more member member unlimited shall be personal
before the exceeding the exceeding the liable to make a administrator
commencement amount, if any, amount further shall be the
of the winding up unpaid on the undertaken to be contribution, as if contributory
❑Any debt or shares contributed to the he were a ❑For a bankrupt
liability assets of the member of an member, the
contracted after company unlimited trustee shall be
he ceased to be company. the contributory
a member
©Professor Dr Zubaidah Zainal Abidin 2019
202 Voluntary winding up
Members 7 days
Registrar EFFECTS OF VOLUNTARY
meeting
WINDING UP
NOTICE OF
❑ Period fixed for 1)Company shall cease to
RESOLUTION
the duration of the (MEMBERS carry on its business from
company by the VOLUNTARY the commencement of the
Constitution WINDING UP) winding up
expires
2)Corporate state and
❑ Occurrence of
event which the powers of the company
Constitution NOTICE OF
shall continue until it is
provides for the RESOLUTION dissolved
company to be (CREDITORS 3)Any transfer of shares
wound up VOLUNTARY and any alteration in the
voluntarily WINDING UP) status of the members
❑ Company resolves
by special made after the
resolution commencement of winding
up, shall be void.
©Professor Dr Zubaidah Zainal Abidin 2019
203 Members’ voluntary winding up
Board
meeting
REGISTRAR
Lodged before the notice of
the general meeting
DECLARATION
OF SOLVENCY
(MEMBERS 5 weeks Members 7 days
VOLUNTARY
WINDING UP) meeting
NOTICE OF
❑ Appointment of
+ liquidator
RESOLUTION
(MEMBERS
Statement of Affairs ❑ All the powers VOLUNTARY
Assets of the of the directors WINDING UP)
company cease
Total amount
expected to be
realized
Liabilities of the
company
Estimated expenses
of winding up
©Professor Dr Zubaidah Zainal Abidin 2019
204 Creditors’ voluntary winding up
Board
Appoint liquidator
meeting
STATUTORY 14 days
REGISTRAR
DECLARATION
OF INABILITY
OF COMPANY NOTICE OF
TO CONTINUE HOLDING OF
BUSINESS AND MEETING OF
THAT MEETING CREDITORS 7 days
OF THE (CREDITORS Creditors Appoint liquidator
COMPANY VOLUNTARY meeting
AND ITS WINDING UP)
CREDITORS
HAVE BEEN 7 days
SUMMONED NOTICE OF
(CREDITORS RESOLUTION
VOLUNTARY (CREDITORS
WINDING UP) VOLUNTARY
WINDING UP)
©Professor Dr Zubaidah Zainal Abidin 2019
205 Provisions applicable to every voluntary
winding up
Appointment or Remuneration of
Distribution of property
removal of liquidator liquidator in voluntary
of company
by Court winding up
• Applied equally in • If there is no • A liquidator is entitled
satisfaction of its liquidator appointed to receive salary or
liabilities in a voluntary winding remuneration
• Distributed among up, the Court may on • Any member,
the members application, appoint creditor or liquidator
according to their a liquidator may, at any time
rights and interest • The Court may, on before the dissolution
cause shown, remove of the company,
a liquidator or apply to the Court to
appoint another review the amount of
liquidator the remuneration of
the liquidator
©Professor Dr Zubaidah Zainal Abidin 2019
206 Provisions applicable to every voluntary
winding up
Power of liquidator to accept
Act of liquidator valid share as consideration for sale of
property
• The acts of the liquidator shall be • Where it is proposed that the
valid notwithstanding any business or property of a
defects in his appointment or company is to be transferred or
qualification. sold to another corporation, with
• Any conveyance, transfer, the sanction of a special
mortgage, charge or other resolution , the liquidator may
disposition of the company’s i)receive in compensation for
property made by a liquidator the transfer of shares in the
shall be valid in favor of any corporation for distribution
person taking such property in among the members of the
good faith and for value company
ii) enter into any other
arrangement whereby the
members may participate in the
profits of or receive any other
benefit from the corporation
©Professor Dr Zubaidah Zainal Abidin 2019
Annual meeting of members
207
and creditors
Members Annual Annual Creditors’ Annual
voluntary meeting of meeting of Voluntary meeting of
winding up members members winding up creditors
LIQUIDATOR’S ACCOUNT OF RECEIPTS AND
Within 30 days from the
PAYMENTS AND STATEMENTS OF THE POSITION
period of every 6 months
IN THE WINDING UP
FINAL MEETING
AND
DISSOLUTION
RETURN BY 7 days
LIQUIDATOR REGISTRAR DIFFERING THE
RELATING TO DATE OF
FINAL MEETING DISSOLUTION
On the expiration of 3
(VOLUNTARY
months after lodging
with Registrar, the WINDING UP)
company shall be
©Professor Dr Zubaidah Zainal Abidin 2019 dissolved
208 Winding up by Court
❑ The company
❑ Any creditor The liquidator
❑ A contributory
Petition of
winding up
❑ The Registrar
❑ The Minister
❑The Malaysian
❑ The Central Bank of
Deposit Insurance
Malaysia
Corporation
©Professor Dr Zubaidah Zainal Abidin 2019
209 Circumstances in which company
may be wound up by Court
Default in
Special
lodging statutory
resolution for the
declaration on
company to be
entitlement to
wound up by the
commence
Court
business
Does not
commence Suspends its
business within a business for a
year from its whole year
incorporation
©Professor Dr Zubaidah Zainal Abidin 2019
210 Circumstances in which company
may be wound up by Court
Company has Company is
no member unable to pay
its debts
Provisions in the
Constitution for
Directors acting
fixed period of
in his own
duration and
interests
occurrence of
events
©Professor Dr Zubaidah Zainal Abidin 2019
211 Circumstances in which company
may be wound up by Court
Court’s opinion
License
that it is just
revoked under
and equitable
the Financial
for the
Services Act
company to be
2013
wound up
Investigation of
Company is
affairs of
being used for
company at
unlawful
the direction of
purposes
the Minister
©Professor Dr Zubaidah Zainal Abidin 2019
Winding up by Court
212
Petition for
COURT
winding up
The company, creditor or
STAY
contributory may apply to the
Court for an order to stay or WINDING
restrain further proceedings UP
❑ Dismiss the petition
❑ Adjourn the hearing ❑ May stay or
❑ Make any interim or restrain the action
any order that the or proceedings 14 days
Court thinks fit
AFFIDAVIT
STATEMENT OF VERIFYING NOTICE OF THE
AFFAIRS STATEMENT OF WINDING UP
(WINDING UP AFFAIRS ORDER AND REGISTRAR
BY COURT/ (WINDING UP PARTICULARS
RECEIVERSHIP) BY COURT/ OF LIQUIDATOR
RECEIVERSHIP)
©Professor Dr Zubaidah Zainal Abidin 2019
213 Provisions relating to liquidators in
winding up by Court
Interim liquidator Appointment, Custody and vesting
resignation and of company’s
removal of a liquidator property
•Any time after the •If any approved •The liquidator shall
presentation of a liquidator is not take into his custody
winding up petition appointed to be the or under his control all
and before the liquidator, the Official the property to which
making of a winding Receiver shall by the company is or
up order virtue of his office appears to be entitled
become the liquidator
•Liquidator may resign
from office or on
cause shown, be
removed from office
by the Court
©Professor Dr Zubaidah Zainal Abidin 2019
214 Provisions relating to liquidators in
winding up by Court
Submission of Report by Power of liquidator
Statement of Affairs in winding up by
of Company
liquidator
Court
• Directors submit to • Liquidator to submit •Directions given by
the liquidator report to the Court resolutions of the
•The particulars of its •Share capital, assets creditors or
assets, debts and and liabilities contributories at
liabilities • Causes of failure general meetings
•The names and •Whether any fraud •Administration of the
addresses of its has been committed assets
creditors •Distribution among
•Any non-
•The securities held by compliance issue its creditors
the creditors
respectively
•The dates when the
securities were
respectively given
©Professor Dr Zubaidah Zainal Abidin 2019
215 Provisions relating to liquidators in
winding up by Court
Settlement of list of Release of liquidators Orders of release
contributories and and dissolution of or dissolution
application of assets company
•Liquidator to collect •Liquidator may •Where the Court has
the company’s apply to the Court for made an order that
property and apply release and that the the liquidator be
to discharge the company be discharged and the
company’s liabilities dissolved company be
•Settle the list of •Realised all the dissolved, the
contributories – property of the liquidator shall lodge
members liable to company a copy of the
contribute or there •Distribute final ‘ORDERS OF RELEASE
will be surplus dividend to the OR DISSOLUTION”
available for creditors with the Registrar
distribution and the Official
•Make a final return
Receiver within 14
to the contributories
days from the
making of the order
by the Court
©Professor Dr Zubaidah Zainal Abidin 2019
216 General powers of Court in winding up
by Court
•On application of the
liquidator, creditor or
To stay winding contributory
up •Liquidator shall cease to
conduct any further
action
•On application of the
liquidator, creditor or
contributory TERMINATE
To terminate •Company ceases to be in WINDING
winding up liquidation
•Liquidator ceases to hold
UP
office and released from all
liabilities
•On application by the
POWER OF
To declare liquidator, within 2 years
after the date of dissolution COURT TO
dissolution of •the Court may make an DECLARE
order to declare the DISSOLUTION
company void dissolution to have been OF COMPANY
void
VOID
©Professor Dr Zubaidah Zainal Abidin 2019
217 Provisions applicable to every winding up
- Notice of appointment and address of liquidator
NOTICE OF
APPOINTMENT
AND ADDRESS OF
LIQUIDATOR
(MEMBERS
VOLUNTARY
WINIDING UP) NOTICE OF
CHANGE OF
LIQUIDATOR
LIQUIDATOR’S
NOTICE OF ADDRESS
APPOINTMENT
REGISTRAR
AND ADDRESS OF
LIQUIDATOR
(CREDITORS
VOLUNTARY
WINIDING UP) NOTICE BY
LIQUIDATOR OF
RESIGNATION OR
REMOVAL FROM
OFFICE
NOTICE OF
APPOINTMENT
AND ADDRESS OF
LIQUIDATOR
(WINDING UP BY
THE COURT)
©Professor Dr Zubaidah Zainal Abidin 2019
218 Striking off
- Power of Registrar to strike off companies
Not carrying on any business or not in
operation
Contravened the Act
Being used for unlawful purposes
Wound up
- No liquidator is acting
-Affairs of the company are fully wound up and for a period
o 6 months the liquidator has been in default in lodging any
returns
-The affairs of the company has been fully wound up by the
Court and there are not assets or the assets available is
insufficient to pay the cost of obtaining an order of the Court
dissolving the company
©Professor Dr Zubaidah Zainal Abidin 2019
219 Application to strike off company
Director
APPLICATION
Member TO STRIKE OFF Registrar
COMPANY
Liquidator
©Professor Dr Zubaidah Zainal Abidin 2019
Procedure for application by directors or
220 members to strike off the name of a
company
Not involved in Not made any
any legal
Shareholders’ return of capital
proceedings within
resolution or outside to the
Malaysia shareholders
Information of the Not a
No assets and company with the
liabilities Registrar is up to holding
date company
No outstanding tax
Has not or other liabilities Not a
with any
commenced Government “Guarantor
operation Department or Corporation”
Agencies
No outstanding
No outstanding
charges in the
Register of penalties under
Charges the Act
©Professor Dr Zubaidah Zainal Abidin 2019
Procedure for application by liquidator to
221
strike off the name of a company
Company fully Compulsory wound
No liquidator
wound up up
• Death or • For a period of 6 • Fully wound up
resignation months • No assets
• Wherabouts • the liquidator has • Insufficient assets
unknown for more been in default in • To pay the costs of
than 1 year lodging any return obtaining an order
• Failure or refusal to of the Court
lodge his notice of dissolving the
appointment for company
more than 6
months after his
appointment
• Ceases to act for
more than 1 year
after his
appointment
©Professor Dr Zubaidah Zainal Abidin 2019
222 Notice of intention to strike off
company
COMPANY
NOTIFICATION
If an answer showing cause to
the contrary is not received
within 30 days from the date of
REGISTRAR the notice, a notification to the
public will be published by the
Registrar, with a view to striking
Will proceed to strike off NOTIFICATION the name of the company off
❑ Confirmation the the register
company is no longer
carrying on business or
is not in operation
❑ Receive no reply to the
LIQUIDATOR
notice given POWER OF COURT
❑ No objection to the notice
TO REINSTATE
and public notification
❑ Not satisfied with the STRUCK OFF
reasons as to why the COMPANY INTO
company should not be THE REGISTER
struck off
©Professor Dr Zubaidah Zainal Abidin 2019
223 Objection to strike off
❑ Company is still carrying on business
NOTICE OF ❑ Company is a party to legal proceedings
INTENTION TO ❑ Company is in receivership or
OBJECT STRIKING liquidation
OFF OF A ❑ The applicant believes there exists, and
COMPANY intend to pursue, a right of action, on
APPLICATION behalf of the company
❑ Not be just and equitable to remove the
company from the register
APPLICANT
REGISTRAR
POWER OF COURT
TO REINSTATE
STRUCK OFF NOTICE OF
WITHDRAWAL OF
COMPANY INTO STRIKING OFF ❑ Indicating reasons for the withdrawal
THE REGISTER APPLICATION of the application together with the
necessary supporting documents
©Professor Dr Zubaidah Zainal Abidin 2019
Thank you!
Any
questions?
