Winding Up/Liquidation
Closing of insolvent businesses where company’s asset’s are collected and realised
Winding Up a Company (Liquidation)
Winding up is a process in which the existence of a company is brought to an end where assets of a company are collected and realised. The proceeds collected are used to discharge the company’s debts and liabilities and the remaining balance (if any) will be is distributed amongst the contributories according to their entitlement.
Modes for Winding Up
There are two modes for winding up a company:
Members' Voluntary Winding Up
When?
Members don’t want to run the business anymore and the company is solvent and sufficient liquid funds are available to meet the fees, costs and expenses of the liquidation.
- Initiate by directors and shareholders
- Company must be solvent and able to meet its liabilities
- Poceeds of sale go to the shareholders
- A Declaration of solvency is made
Creditors' Voluntary Winding Up
When?
Where the director of the Company decides to place the company into liquidation because there are not enough assets to pay all creditors ie Company is insolvent.
- Initiate by directors and shareholders
- Company is insolvent
- Cash realised from the sale of assets returned to creditors
- No declaration of solvency is made
Procedure for Member's Voluntary Winding Up
Members of the company to pass a resolution for voluntary winding up and the appointment of a liquidator
Written Declaration of Solvency to be prepared and executed at a Board of Directors meeting
Declaration of Solvency to be lodged with the Companies Comission of Malaysia
Members of the company to apppoint a liquidator
The company ceases all operations save and except for functions necessary for the winding-up process.
Liquidator takes over all affairs of the company and proceed with winding up
Procedure for Creditors' Voluntary Winding Up
Members of the company to propose resolution for voluntary winding up
Give written notice by post to all creditors for a Creditors Meeting. Notice to be given at least seven (7) clear days before date of commencement of the meeting
Winding-up notice to be advertised in a widely circulated newspaper in Malaysia in both the national language and in English
Creditors Meeting to convene at a time and place agreed upon by majority attendees and to decide on:
a) Appointment of Liquidator; and
b) Appointment of Committee of Inspection (if necessary)
Liquidator takes over all affairs of the company and proceed with winding-up
A copy of the resolution for winding-up is to be lodged with the Companies Commission of Malaysia within seven (7) days from the date the resolution was passed
A copy of the resolution for winding-up is to be posted in a widely circulated newspaper in Malaysia in both the national language and in English ten (10) days from the date the resolution was passed
Liquidator takes over all affairs of the company and proceed with winding-up
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SCALEUP CORPORATE SERVICES SDN. BHD.
Reg No.:200701039771(797803-P )