There are 2 ways to close down a company in Malaysia- striking-off or winding-up. The Strike-Off option is a quick and simple solution when a corporation is no longer active and directors no longer want to pay for its upkeep. In this article, we explore in-depth on the Strike-Off option as it is one of the most cost-effective ways of closing down a company under this extremely challenging time for many businesses in Malaysia. Under section 549(a) and 550 of the Companies Act 2016, the option to strike-off a Sdn Bhd company in Malaysia is made possible. Hence, we have summarised the requirements and process to strike-off a Company in Malaysia below:
Related Read: How to close a Sdn Bhd company in Malaysia? »
Table of Contents
1. Initiating Company Strike-Off Process in Malaysia
It is more common for a director, member or liquidator of a company to initiate a company strike-off application in Malaysia.
Further, the Registrar of Companies may have the option to strike-off a company in Malaysia on his own motion by looking into the company’s records in the register.
2. Requirements for Company Strike-Off Application in Malaysia
- The resolution of the shareholders has been passed for the initiation of the application to strike-off the name of the company from the register on the basis that the company is not carrying on business or in operation in Malaysia. If a majority cannot be obtained due to untraceable shareholders, the application may still be submitted provided that attempts have been made to trace the whereabouts of the shareholder(s). These attempts must be made by way of registered post and proof of other modes of attempt must also be attached to the application.
- The company has no assets or liabilities (documentary evidence i.e. financial statements have to be submitted to the Registrar)
- The company has no outstanding charges in the Register of Charges kept with the Registrar.
- The company has no outstanding penalties or offer of compounds under the Companies Act 2016. The company must ensure that all such liabilities are settled before an application to strike-off a company in Malaysia is made.
- The company has no outstanding tax or other liabilities with any Government department or agency. When a company has commenced operation, it must settle all outstanding tax and obtain a tax clearance prior to the filling of the application to strike-off a company in Malaysia.
- The latest information of the company with the Registrar is updated.
- The company is not involved in any legal proceedings within or outside of Malaysia.
- The company has not made any return of capital to the shareholders.
- If a company still has its capital, the company should proceed with the voluntary winding up process instead, to formally cease its existence.
- The company is not a holding company.
- The company is not a “Guarantor Corporation”
For detailed guidance, you may refer to GUIDELINES ON APPLICATION BY DIRECTORS OR MEMBERS TO STRIKE-OFF THE NAME OF A COMPANY UNDER SECTION 550 OF THE COMPANIES ACT 2016.
3. Company Strike-Off Procedure in Malaysia
For application under section 550 of CA 2016, the applicant must complete the Declaration-Application to Strike-Off Company in Schedule B of the Practice Directive 1/2017 (Appendix 1) and ensure that all requirements as set out above are complied with before submitting the application. For these procedures, it is advisable to seek the assistance of your licensed Company Secretary in Malaysia.
4. Company Strike-Off Process After Application in Malaysia
After the submission of documents, the Registrar will issue a notice which states that there will be a public notification of the intended company strike-off in Malaysia if there is no objection lodged with the Registrar within 30 days of the notice. Upon the expiry of the public notification, the Registrar then publishes the name of the company, which has been struck off in the Federal Gazette to indicate that it has been struck off.
After a company is struck off, the company will dissolve and cease to exist. The company will no longer be able to conduct any form of business or transactions. However, the liability of director, officer or member of the company will continue and may be enforced as such any past misconduct or breaches of law will still be enforceable against them.
5. Ground of Objection
Any person may lodge with the Registrar an objection to the application to strike-off the company in Malaysia on the following grounds:
- The company is still carrying on business or there is other reasons for it to continue in existence;
- The company is a party to legal proceedings;
- The company is in receivership or liquidation;
- The person is a creditor or a member or a person who has an undischarged claim against the company;
- The person believes that there exists, and intends to pursue, a right of action on behalf of the company;
- For any other reason, it would not be just and equitable to remove the company from the register.
6. Withdrawal of Company Strike-Off Application in Malaysia
The applicant may withdraw the application to strike-off a company in Malaysia within thirty (30) days from the date specified in the notice or publication of notification under section 551(1). This can be done by lodging a Notice of Withdrawal of Striking Off Application to the Registrar the reasons for the withdrawal of the application, together with the necessary supporting documents.
7. Reinstatement of a Previously Struck-Off Company
Any person or shareholder who is not satisfied with the decision of the Registrar to strike-off the company in Malaysia may apply to the court to reinstate the company’s name into the Register within seven years from the date it was struck off.
Before you strike-off your company in Malaysia, it is important to explore other possible corporate restructuring plans to rescue your business. Consider closing down your business as your last resort.
If not, you are strongly recommended to seek professional advice to ensure that you strike-off your company in Malaysia properly. At WeCorporate, we provide an extensive range of services and guidance to ease the process of closing a company for you.
The following groups below can initiate the strike-off application process in Malaysia:
- Director of company
- Member of company
- Liquidator of company
- Registrar of Companies
- If a company still has capital, it cannot proceed with the strike-off application in Malaysia. Instead, it should proceed with the voluntary winding up process to formally cease its existence.
- The applicant may withdraw the application to strike-off a company in Malaysia within 30 days from the date specified in the notice or publication of notification under section 551(1).
- Yes, any person or shareholder who is unsatisfied with the Registrar’s decision to strike-off the company in Malaysia may apply to the court to reinstate the company’s name into the Register. However, this must be done within 7 years from the date it was struck off.
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