Jun
How to close a Sdn Bhd company in Malaysia?
Due to poor business performance or company being dormant (no activity), business owners may close down their Sdn Bhd company. In this article, WeCorporate explains the processes and costs involved in formally closing down a Sdn Bhd company in Malaysia.
In general, there are 2 options to close a Sdn Bhd being 1) Strike off or 2) Winding Up. We summarize the differences in processes below:
A. Strike Off – Sdn Bhd Company
Criteria
Section 551 of Companies Act 2016 grants the rights to the shareholders of the company to apply to SSM to strike off the company provided that the following conditions are met:
- The company has NOT commenced business since incorporation or is NOT carrying on business or ceased business operations for quite some time;
- The company has NO intention to commence or carry on its business or operation in the future;
- The company has NO assets and liabilities including outstanding charges in the Register of Charges;
- The company has insufficient funds to pay for winding up expenses;
- The company has NO outstanding penalties or offer of compounds under the Companies Act 2016;
- The company has NO outstanding tax or other liabilities and is NOT indebted to any government agencies in Malaysia;
- The company has NOT made any return of capital to the shareholders;
- The information of the company with the Registrar as shown in the “print-out” is up to date;
- The company is NOT involved in any legal proceeding within or outside Malaysia;
- The company is NOT holding company or a subsidiary of other corporate body;
- The company is NOT a “Guarantor Corporation
Account closure confirmation from Government Agencies
The company will need to obtain closure confirmation from EPF/Perkeso/LHDN. Further, if there is tax refund the company should only proceed with bank account closure and strike off application upon receiving the tax refund.
Audited Accounts Requirement
For company which used to be active or with assets and liabilities, SSM will require the company to submit up to date audited accounts prior to accepting the strike off application.
However, SSM may accept un-audited management accounts where company has no assets and liabilities. Nonetheless, SSM has the sole discretion to require audited accounts after the strike off application.
Processing Time
It usually take between 6 months to 12 months to complete the whole strike-off process.
Strike off initiated by SSM
SSM may strike off a company from the register provided in accordance with Section 549 of Companies Act 2016, if the company fails to submit the company annual return for three years or more.
Costs to strike off a company
It will be in the range of RM1,500 to RM2,000 depending on complexity of the company status.
B. Winding Up – Sdn Bhd Company
Criteria
The winding up process is more complex as it includes Voluntary Winding Up and/or Compulsory Winding Up and the proceeses are covered in this article: Overview on restructuring and corporate rescue options for businesses in Malaysia
In short, winding up process of a Sdn Bhd company will involve application to the court and appointment of liquidator to oversee the the entire winding up process. Hence, the cost to wind up a company will usually start from RM10,000.
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