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CLOSING DOWN AND WINDING UP COMPANY
For a company that is no more longer operating, it is advisable to make application for the purpose to winding up the company. This is to avoid the heavy penalties being imposed to the company as well the directors for offenses not submitting or lodging documents such as annual statements and audited accounts at the Registrar and also fail to update company information from time to time as stipulated in the Companies Act 2016.
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The Registrar of companies may winding up the inactive company from the register either on its own motion or upon an application by a director, member or liquidator of the company.
The Registrar may strike off a company from the register provided in section 549, if the company fails to submit the company annual return for three years or more.
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SECTION 549 – COMPANIES ACT 2016 – POWER OF REGISTRAR TO STRIVE OFF COMPANY.
Notwithstanding any provision of this Act, the Registrar may strike a company off the register, if-
(a) the Company is not carrying on business or is not in operation;
(b) the company has contravened this 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, order or morality in Malaysia;
(d) In any case where the company is 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 have been fully wound up under a winding up by the Court and there a no assets or assets available are not sufficient to pay the costs of obtaining an order of the a Court dissolving the company.
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SECTION 550 – COMPANIES ACT 2016 – APPLICATION TO STRIKE OFF COMPANY.
Subject to section 549, the Registrar may strike a company off the register either on its own motion or upon an application by a director, member or liquidator of the company.
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SECTION 551 – COMPANIES ACT 2016 – NOTICE OF INTENTION TO STRIKE OFF COMPANY.
(1) Before the name of a company may be struck off from the register under section 549, the Registrar may serve on the company or the liquidator, a notice, stating that if an answer showing cause to the contrary is not received within thirty days from the date of the notice of such notice, a notification to the public will be published in the manner determined by the Registrar, with the view to striking the name of the company off the register.
(2) The Registrar may strike the name of the company off the register after the expiration of thirty days of the publication of the notification in subsection (1) if he-
(a) receives a confirmation that the company is no longer carrying on business or is not in operation;
(b) receives no reply from the company to the notice referred to in subsection (1);
(c) receives no objection to the notice and public notification referred to in subsection (1); or
(d) is not satisfied with the reasons as to why the company should not be struck off.
(3) The Registrar shall publish the name of the company which has been struck off in the gazette and upon publication in the gazette, the company shall be dissolved.
(4) The notice to be sent under this section to a liquidator may be addressed to the liquidator at his last known place of business, and a letter or notice to be sent under this section to a company may be addressed to the company at its registered office or, if no office is registered, to an officer of the company, or if there is no officer of the company whose name and address are known to the Registrar, may be sent to each of the persons who formed the company, addressed to him at the last known address.
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SECTION 552 – COMPANIES ACT 2016 – OBJECTION TO STRIKING OFF COMPANY FROM THE REGISTER
(1) Where a notice of intention to strike off a company from the register is given under subsection 551(1), any person may, together with the payment of a prescribed fee, lodge with the Registrar within thirty days from the date specified in the notice, an objection to
the striking off of the company on any of the following grounds.
(a) That the company is still carrying on business or there is other reason for it to continue in existence.
(b) That the company is a party to legal proceedings
(c) That the company is in receivership or liquidation or both
(d) That the person is a creditor or a member or a person who has an undischarged claim against the company.
(e) That the person believes that there exists and intends to pursue, a right of action on behalf of the company under Division 6 of Part III
(f) That for any other reasons, it would not be just and equitable to remove the company from the register.
(2) For the purposes of paragraph (1)(d)-
(a) A claim by a creditor against a company is not an undischarged claim if-
(i) The claim has been paid in full
(ii) The claim has been paid in full or in part by a receiver or a liquidator in the course of a completed receivership or liquidation.
(iii) A receiver or a liquidator has notified the creditor that the assets of the company are not sufficient to enable any payment to be made to the creditor
(b) A claim by a member or any other person against a company is not an undischarged claim if-
(i) Payment has been made to the shareholder or that person in accordance with a right under the constitution or this Act to receive or share in the company’s surplus assets.
(ii) A receiver or liquidator has notified the member or that person that the company has no surplus assets.
(3) The Registrar shall not proceed with the striking off unless the Registrar is satisfied that-
(a) The objection has been withdrawn
(b) Any facts on which the objection is based are not, or are no longer correct
(c) The objection is frivolous and vexatious.
(4) The Registrar shall send a notification to the objector and the company if he decides
to suspend or to continue with the process of striking off the company.
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