Learn more about how to start a business / company in Malaysia and how to operate it properly under the laws of Malaysia. If you're starting up new, the articles are very useful for new business owners too.
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There could be many reasons why someone would want to close down a company. Here are some of them:
To incorporate a new company, it’s easy and as fast as 1 day, however closing down a company takes a longer process. There are 2 ways to close down a company, Strike Off and Wind Up.
|Strike Off||Wind Up|
|Cost||RM 2,500||RM 10,000 – RM 20,000|
|LHDN Income Tax||All outstanding tax must be settled.||All outstanding tax must be settled.|
|LHDN Tax Clearance Letter||Must obtain.|
|Duration needed by SSM||Min. 6 months||Min. 12 months|
|Balance Sheet||Must have no Assets & Liabilities.||Complex process.|
|Limitations||May be reinstated within 7 years from date of strike off.||Officially terminated upon notice of confirmation.|
|Type||Members’ Voluntary||Creditors’ Voluntary||Compulsory|
|Status||company is solvent and able to pay all its debts||company is insolvent and unable to pay all its debts||by court order|
|Initiated by||Company Directors / Shareholders||Company Directors / Shareholders||Creditors|
Do I still need to pay for Company Secretary ?
Yes, a Company Secretary is still required until the company is officially struck off or wound up. You can also save up to 70% on the Company Secretary fees on Boss Boleh while waiting for LHDN to provide you the necessary documents and SSM to process.
I have decided to stop my business now, can I strike off immediately ?
Your audited financial statement shall show that there is no Assets and Liabilities left. It is also important that the company does not have any profits or be in operation. Then you may proceed to strike off.
What if there’s no Assets and Liabilities but there are Retained Earnings ?
SSM may reject your application to strike off.
Will the Director / Shareholder automatically be bankrupt or blacklisted upon Striking Off / Winding Up ?
No, they will not be bankrupt or blacklisted. However, SSM has the right to submit to court to blacklist the Director if found to have breached the Companies Act 2016.
What happens when Director declares bankrupt (due to other personal reasons) while Winding Up is in process ?
The Director General of Insolvency (Liquidator) will take over and handle it. So, there is nothing to be done.
For more information, get in touch with us.