There are two ways to wind up a company namely:
(i) Winding by an order of the Court; and
(ii) Voluntary winding-up by the shareholders.
When Form 65(A) is submitted to the Registrar, a provisional liquidator will already be appointed beforehand. Then feedback is required by the Registrar to when is this ‘winding up resolution’ is to be approved.
What does a liquidator do?
The key task of a liquidator is to wind up a company by distributing assets to the creditors (and other parties involved); and once this process is completed, the balance of the realised assets will be distributed to the company shareholders.
Upon his appointment, a liquidator will step in and take control all of the company’s assets and liabilities. The directors and shareholders will cease to have any power nor say on the company.
A court order can also be served for a company to be dissolved due to several reasons as follows :
1. Insolvency - a situation where a company is unable to pay its debts owed to a financial institution, supplier, creditor or any other related entities;
2. One or more of the company’s directors has acted in his/her/their personal interest or being unjust to other directors or acted against the interest of the company and has been served a court order;
3. The Court is convinced that it is equitable that this company should be dissolved;
4. The number of directors or shareholders is reduced to one (a private limited company in Malaysia requires two or more shareholders);
5. No business operations began since company was registered (period of one year) or has suspended business operations for at least one year;
6. Where the Memorandum and Articles of Association of the company set an expiry date of the business; and/or
7. The company has performed an unlawful business that threatens national security or is against the laws of Malaysia.