Description
- Voluntary winding up is the process where a company decides to cease operations and dissolve itself with the approval of its shareholders. This process ensures that all assets are liquidated, liabilities are settled, and the company is officially deregistered in compliance with the law.
GOV Department
- Suruhanjaya Syarikat Malaysia (SSM) / Companies Commission of Malaysia
License Name (Malay)
- Penggulungan Sukarela
Details
- A company can initiate voluntary winding up when it is no longer in operation or is unable to meet its financial obligations.
- There are two types of voluntary winding up:
- Members’ Voluntary Winding Up: Initiated when the company is solvent.
- Creditors’ Voluntary Winding Up: Initiated when the company is insolvent.
- The process involves appointing a liquidator to manage the distribution of assets, settlement of liabilities, and submission of final documents to SSM.
Important Rules
- A special resolution must be passed by shareholders to approve the voluntary winding up.
- A Declaration of Solvency must be filed if the company is solvent.
- Creditors must be notified and meetings held if the company is insolvent.
- The appointed liquidator must prepare and submit regular reports to SSM.
- The process must comply with the Companies Act 2016 and other relevant laws.
Compound & Punishment
- Failure to comply with the voluntary winding-up process may result in:
- Fines of up to RM50,000 for directors or responsible parties.
- Legal action for non-disclosure or misrepresentation during the winding-up process.
- Directors may be disqualified from holding future directorships if found in breach of their duties during the winding-up process.
Advisor
Jeffrey Eh Hao Yih , Director
Jeffrey has been providing expert guidance for businesses dealing with ongoing challenges. With his expertise, he aids clients in strategic business planning, streamlining operations, and enhancing productivity. Additionally, Jeffrey offers diverse business technology services to help digitize traditional businesses effectively.
Commonly Asked Questions
Voluntary winding up is a legal process where a company decides to close its business operations and dissolve itself with shareholder approval, ensuring proper settlement of assets and liabilities.
A company may choose voluntary winding up when it no longer operates or cannot meet financial obligations, and shareholders agree to close the business.
There are two categories:
- Members’ Voluntary Winding Up (company is solvent)
- Creditors’ Voluntary Winding Up (company is insolvent)
Shareholders must pass a special resolution to proceed with voluntary winding up.
A licensed liquidator must be appointed to manage the winding-up process, including asset disposal, debt settlement, and statutory filings.
Key documents include:
- Special resolution for winding up
- Declaration of solvency (for solvent companies)
- Notice to creditors (for insolvent companies)
- Appointment of liquidator
- Required filings to SSM
Yes, in a Creditors’ Voluntary Winding Up, creditors must be notified and may attend a meeting regarding the company’s financial position and liquidation steps.
Timeframe varies by case complexity, but generally ranges between 6 months to 2 years, depending on asset realisation and settlement matters.
Failure to follow statutory requirements may result in:
- Fines up to RM50,000
- Legal action
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Directors potentially being disqualified from future directorships