DEREGISTRATION/ STRIKING OFF/ CLOSURE OF COMPANY

Closing down a company in Malaysia?
What to do?

What we can do for you?

  • Our experienced company secretary will advise you on the best course of action for closing down a company in Malaysia
  • We take care of all the formalities and guide you step by step through the closing down process
  • There are three methods to closing down a Sdn Bhd company;
    1.Striking off a company
    2.Winding up a company by a Members’ Voluntary Liquidation
    3.Creditors winding up

1. STRIKING OFF A COMPANY

A simple, cost-effective method to close down an Sdn Bhd or private limited company is to request that the Companies Commission of Malaysia (“CCM”) strike it off from the register pursuant to Section 550 of the Companies Act 2016 (the “Act”).
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. 
  • 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”.

Your company needs to meet all of these requirements before you submit your application to the CCM.

A clear advantage of the company strike-off method is the speed of the process: in our experience, it typically takes less than one year. This is relatively quick compared to other options for closing down a company in Malaysia.

2. WINDING UP A COMPANY BY A
MEMBERS’ VOLUNTARY
LIQUIDATION

Winding up a company – also known as going into liquidation – is longer and more complex than simply striking off a company. So at first glance, it can look less appealing than a strike-off.

However, in some circumstances, winding up a company may be more appropriate for your business.

For example, your shareholders might want to benefit from the proceeds gained by the company after selling off the assets. But as we mentioned in the previous section if your shareholders receive any capital from the company, the company won’t be eligible to apply for strike-off.

In this case, a company wind-up might be your best option.

Generally, the voluntary options for winding up a company in Malaysia are either:
● a members’ voluntary liquidation (“MVL”); or
● a creditors’ voluntary liquidation (“CVL”).

While you need to appoint a liquidator for both options, in an MVL (where the company must be financially solvent), the surplus of the company will distribute to members upon the settlement of the debts and expenses. By contrast, in a CVL (where the company is not financially solvent), the proceeds realised from selling off the assets will be paid to the creditors.

If the liquidation process takes more than a year, an annual meeting of members will be held to report on the winding-up processes undertaken to date. An MVL typically takes between 1-2 years to complete, depending on how long it takes to obtain tax clearance from the IRB.

However, after receiving tax clearance, the liquidator shall prepare the final account and convene a final meeting to finalise the liquidation process.