There are several ways in the process of closing down a company; for example if the company is no longer active, no more projects, directors no longer
keen to run the company or unable to pay back to the creditors. Let us compare how strike off vs winding up a company work on:
Process of strike off (de-register) a company in Malaysia and among the the criteria that the directors need to fulfill for the Company:
i. The Company is no longer running on business and no longer interested to run the business in the future;
ii. Not having assets & liabilities during the application process of strike off;
iii. No outstanding charges in the Registrar of Charges and Compounds;
iv. All directors and company are not involved in any legal proceedings in Malaysia or outside Malaysia;
v. The company is not a holding company;
vi. Has not made any return of capital to the members of the Company;
vii. Is not a "Guarantor Corporation" as it is not agreed to guarantee any repayment of any money towards a 3rd party.
How Hills & Cheryl help you with the process with the estimate costing of RM 1,000.00:
Step 1: Preparing of the members' resolution as agreed to strike off the company and close of current bank accounts;
Step 2: To fill in the strike off application forms;
Step 3: Preparation of management accounts in showing no assets, no creditors and no liabilities;
Step 4: Compile and submit to SSM and LHDN in closing the company's tax file.
Winding up a company is a process of closing down or dissolving a company which inclusive of disposing all assets, clearing all creditors and finally to distribute balance assets to all members according to their shares portion. For winding up, it could be initiated by the director which also know as voluntary winding up or by creditors which know as compulsory winding-up.
1.Creditors Voluntary Winding-Up (CVW): It is a voluntary process that the business is insolvent and no longer viable;
2.Members Voluntary Winding-Up (MVW): The company is able to cover its liabilities as the members want to wind up the company in a tax efficient
It's happening when the company is unable to pay its debts and creditors for the company have started a legal action in demand of the money owned. Hereby, this is the general guides for Members, Creditors or Compulsory Winding up:
Members' Voluntary Winding Up:
1.Members will pass a resolution of winding-up and proceed through BOD;
2.Secondly, proceed to written Declaration of Solvency (lodging to SSM) and appointing a liquidator;
3. Liquidator to take over the company's operation where the operation shall stop and only cater for winding up process.
Creditors Voluntary Winding Up:
1.Members to propose a resolution and get approval from BOD'
2. Notice of meeting (Creditors Meeting) at least 7 days in sending out before commencement of meeting where the meeting place & time must be agreed by majority attendees;
3. A copy of winding-up notice and resolution to be advertise in both major newspaper (BM & English) for 10 days from the date of passed resolution;
4. For the AGENDA of Creditors Meeting: Appointing of Liquidator (mandatory) and inspection team (if needed);
5. Appointed Liquidator will take over the operation and kick-start the wind up.
Compulsory Winding Up:
1.A notice of demand of Section 465 (e) where the company is unable to pay its debts where the owner needs to prepare winding- up petition and supporting legal documents.
2. Be prepare when the court calls for hearing for granting a winding up order.
3.If being granted, then the court can appoint Director General of Insolvency (DGI) or Liquidator in winding up and for this either DGI or Liquidator will take over the operation in completing the winding up process.