Duration of Company Dissolution in Malaysia
The duration of a company’s dissolution in Malaysia is not static. The duration depends on various factors, including those related to the dissolution application that the company has made. In Malaysia, the complete duration of the period of time required for the dissolution of a company usually ranges from six to 12 months.
Methods Through Which a Company May Be Dissolved
The dissolution method to be used depends on whether the company is able to meet its legal obligations at the time of its dissolution. Furthermore, the reasons for the dissolution of the company will have a significant effect on the dissolution process and the method through which the company is to be dissolved. In Malaysia, there are two primary methods through which dissolution may take place. One of these is voluntary winding up; the other, compulsory winding up.
Voluntary Winding Up
Companies in Malaysia which choose to undergo voluntary winding up may do so through either of two methods; these are members’ voluntary winding up (MVWU) and creditors’ voluntary winding up (CVWU).
Members’ Voluntary Winding Up (MVWU)
This dissolution method is typically used by companies which are solvent. Companies which opt for MVWU are able to pay off all their debts but are to be dissolved due to the desires of the owner or directors. MVWU is a common course of action taken when a business owner intends to venture into a new field or when a majority of the directors are soon to retire. Even if the company has outstanding debts, if the company expects to meet all its obligations within 12 months of the official date of dissolution, MVWU will be the form of voluntary winding up to be used.
Creditors’ Voluntary Winding Up (CVWU)
An insolvent company is usually dissolved through CVWU. A company which is unable to pay its debts must be dissolved by using this method. The process of CVWU requires the appointment of a liquidator who will compensate the creditors by using the available company assets.
Compulsory Winding Up
Compulsory winding up takes place at the behest of the court. It is done through the presentation of a petition in front of court authorities. According to Malaysian laws, the petitioners may include liquidators, creditors, the Official Receiver, or the Registrar of Companies.
Aftermath of Company Dissolution
After a company in Malaysia has been dissolved, there are certain effects which are left behind. These effects must be properly managed so that the process of company dissolution can be completed in the most suitable manner. Once the company has been dissolved and its debts paid, its remaining assets are to be evenly distributed among all of the company’s shareholders. Furthermore, should it be required, the company owner can request that the liquidator investigate the cause of the company’s dissolution after the dissolution process has been completed.
Government Agencies and Company Dissolution in Malaysia
In Malaysia, the dissolution process must be completed through a specific procedure which must be followed by all companies to be dissolved. To ensure compliance, various government agencies oversee the process of company dissolution in Malaysia. The main government agencies include the Securities Commission Malaysia (SC). Other agencies include the Companies Commission of Malaysia (SSM) and the Malaysian Anti-Corruption Commission (MACC). The Central Bank of Malaysia (BNM) is also involved in overseeing the process.
It can therefore be concluded that dissolution of a company may sometimes be the most preferable option. Regardless of the reason for the dissolution of a Malaysian company, all companies to be dissolved ought to follow the proper dissolution procedures so that the process will be completed in a suitable manner.