Voluntary Winding Up

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