WINDING UP

The Company
(b) Any creditor including a contigent creditor (a
person towards whom under an existing
obligation the company/will become subject)
(c) Contributory
(d) The liquidator
(e) The minister under s. 205
(f) BNM
(g) The Registrar (sec 217)
(a)

Winding Up by the Court: Who may

petition

Section

218 (1)(a) (k):

(a) Special resolution
(b) Default in filing statutory report, etc;
(c) Failure to commence business, etc;
(d) Reduction of members below two;
(e) Inability to pay debts;
(f) Directors acted in their own interest;
(g) Inspection under Part IX;
(h) Dissolution under memorandum or articles;

Grounds for Winding up by Court

Just and equitable;

(j) Revocation of banking license;
(k) Contravention of certain license;
(l) Revocation of insurance license;
(m) Unlawful purpose;
(n) Purpose prejudicial to national security.
(i)

Grounds for Winding up by court

Definition of inability to pay debts: s. 218(2)

(a)

A creditor to whom the company is indebted in a sum

exceeding RM 500.00 then due has served on the company by
leaving at the registered office a demand requiring the
company to pay the sum so due and the company has for 3
weeks thereafter neglected to pay the sum.

(b) Execution issued on a judgment, decree or order of any court

in favour of a creditor of the company is returned unsatisfied.
(c) It is proved to the satisfaction of the court that the company
is unable to pay its debts.

Inability to pay debts S. 218 (1)

(e)

A company has not neglected to pay the

notice of demand if the debt is disputed
on substantial grounds/abuse of process
Securicor (M) Sdn Bhd v Universal Cars
Sdn Bhd [1985] 1 MLJ 84
Ng Ah Kway v Tai Kit Enterprise Sdn Bhd
[1986] 1 MLJ 58
Re Merchandised Construction Pte Ltd
[1989] 3 MLJ 9

Purpose: Statutory notice of

demand (Sec 218 (2)(a))

Kumpat Timber Industries Sdn Bhd v

Bensa Sdn Bhd [1990] 2 MLJ 46
Ho Siew Choong & Ors v Everwort Sdn
Bhd [2005] 2 CLJ 273

Irregularities in the Notice of

Demand

[1992] 1 MLJ 313

[1996] 2 MLJ 482- perlu service dulu baru
bagi notice .

Failure to Quantify the interest due

on the judgment

Sec 218 (2): Service of statutory notice of

demand
(b) Rule 23: Petition (form 2) can be filled upon
expiry of notice of demand (3 weeks).
Deposit of RM 3,000 to be paid: Rule 23 A
(c) Rule 26: Affidavit verifying petition to be
sworn and filed within 4 days after the
petition presented (form 7)
YPJF Consultancy Service Sdn Bhd v Heller
Factoring (M) Sdn Bhd [1996] 2 MLJ 482
(a)

Winding up Procedures

(d) Rule 25: Service on respondent, Official

Receiver and Registrar of Companies and
affidavit of service of petition- form 5 and
form 6
(e) Rule 24: Advertisement in the Gazette and
in 2 local newspaper 7 days before hearing
Re NKM Holdings Sdn Bhd (1985) 2 MLJ 39
Bank Utama (M) Sdn Bhd v GKM Amal Bhd
[2000] 5 MLJ 657

Winding Up Procedures

(f) Rule 32 : Attend before the Registrar to satisfy

him that:
Petition has been duly gazetted and advertised;
Affidavit verifying statements and affidavit of
service have been filed;
Consent of the approved liquidator nominated by
the petitioner has been obtained;
Provisions of this rules complied with;
Sum of RM 3,000 deposited
Certificate of Registrar

Winding up Procedures

(g) Rule 28: notice of intention to appear on hearing (form

8) to reach the address not later than 12.oo oclock noon of
the day previous to the day appointed for the hearing of
the petition.
(h) Rule 29: List of names and addresses of the persons who
have given notice of their intention to appear (Form 9)
(i) Rule 30: Affidavit in opposition to a petition to be filed
and served 7 days before hearing and affidavit in reply
within 3 days.
- Anvest Corporation Sdn Bhd v Wong Siew Choong Sdn Bhd
[2008] 3 CLJ 317

Winding up procedures

(j) S 221: Powers of court on hearing petition: allow,

dismiss, adjourn the hearing, or make any interim
order that it thinks fit.
(k) S. 222- Power to stay or restrain proceedings
against company
(l) Rule 34: Forthwith inform the liquidator under
Form 10. within 10 days:
Gazette & advertise a notice in Form 12;
Serve upon liquidator a copy of order;
Serve upon OR and ROC a copy of order

WINDING UP PROCEDURES

(m) R 78-84: Proof of debt by affidavit

(Form 55)
(n) R 106: Meeting of creditors and
contributories

Winding up procedures

Provisional

Liquidator: appointment in between

presentation of a winding up petition and before
making of winding up order. May also appoint Official
Receiver.
Purpose: Preserve status quo in the affairs of the
company pending final determination of whether a
winding up order should be granted.
Liquidator: appointed by court S 227
If approved liquidator other than OR is not appointed
to be the liquidator, the OR shall become provisional
liquidator until another person becomes liquidator.
S. 4 definition of OR

Winding up procedures

Rule

194 (1) : Injustice is insubstantial

No proceedings under the Companies Act
1965/ the Companies (Winding-up) Rules
1972 may be invalidated by any formal defect
or irregularity unless the Court is of opinion
that substantial injustice has been caused by
the defect/irregularity and that the injustice
cant be remedied by any order of the court.
[ 2000] 5 MLJ 708
-

Formal defects

S 223 : disposition after commencement of

winding up void unless otherwise order by
Court.
(b) S. 224: attachment or execution put in
force against the estate of the company
after commencement of winding up by the
high court void
(c) S 226(3): no action or proceedings shall be
proceeded or commenced against company
except with the leave of court.
(a)

Effects of winding up

Members voluntarily winding up

(b) Creditors voluntarily winding up
(a)

S 254: Circumstances of voluntarily winding up

(c) When the period fixed for the duration of the
company in general meeting passed a
resolution requiring company be wound up
voluntarily;
(d) If company resolves by special resolution.

Voluntarily winding up

Winding

up where a declaration of solvency

has been made and lodged pursuant to s 257

Takes

place when company is solvent and

conduct of liquidation substantially
dominated by members.

Appointment

of liquidators made in general

meeting s 258

MEMBERS VOLUNTARY WINDING

UP

Winding

up under Division 3, Part X other than

members voluntary winding up
Vested in creditors hand
S.

260- meeting of creditors

S 260 (1)- notices of meeting sent by post to the
creditors.
S 260 (3)- notice of meeting of creditors advertised
at least 7 days before of meeting
S. 261 (1) nomination of liquidator during
meeting.

Creditors Voluntary Winding

Up