How to Strike Off Company in Malaysia?
As a follow up article to our publication titled “How to close a Sdn Bhd company in Malaysia?” , we have written a more in-depth article on the Strike-Off option as it is one of the most cost-effective way of closing down a company under this extremely challenging time for many businesses.
Striking off a Sdn Bhd/Company is made possible under section 549(a) and 550 of the Companies Act 2016, hence we have summarised the requirements and process required below:
1. Who can initiate the striking off process?
It is more common for a director, member or liquidator of a company to initiate a strike off application.
Further, the Registrar of Companies may have the option to strike off a company on his own motion by looking into the company’s records in the register.
2. Requirements for strike off application
a. The resolution of the shareholders have 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 not in operation. 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.
b. The company has no assets or liabilities (documentary evidence i.e. financial statements have to be submitted to the Registrar)
c. The company has no outstanding charges in the Register of Charges kept with the Registrar.
d. 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 for striking off is made.
e. The company has no outstanding tax or other liabilities with any Government department or agency. Where a company has commenced operation, it must settle all outstanding tax and obtain a tax clearance prior to the filling of the application for striking off.
f. The latest information of the company with the Registrar is updated.
g. The company is not involved in any legal proceedings within or outside of Malaysia.
h. The company has not made any return of capital to the shareholders.
i. If a company still has its capital, the company should proceed with the voluntary winding up process instead, to formally cease its existence.
j. The company is not a holding company.
k. 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
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 this procedures, it is advisable to seek the assistance of your licensed Company Secretary for advise.
4. What happens after the application?
After the submission of documents, the Registrar will issue notice which state that there will be a public notification of the intended strike off 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 publish 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 on the following grounds:
a. The company is still carrying on business or there is other reason for it to continue in existence;
b. The company is a party to legal proceedings;
c. The company is in receivership or liquidation;
d. The person is a creditor or a member or a person who has an undischarged claim against the company;
e. The person believes that there exists, and intends to pursue, a right of action on behalf of the company;
f. For any other reason, it would not be just and equitable to remove the company from the register.
6. Withdrawal of strike off application
The applicant may withdraw the application for striking off within thirty (30) days from the date specified in the notice or publication of notification under section 551(1) 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 document.
7. Can a company which is struck off be reinstated?
Any person or shareholder who is not satisfied with the decision of the Registrar to strike off the company may apply to the court to reinstate the company’s name into the Register within seven years from the date it was struck off.
If you are interested to strike off a Sdn Bhd company in Malaysia, fill out our contact form here or email firstname.lastname@example.org
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