How to Winding Up Your Debtors
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What happens after compulsory winding-up?
For the amounts available to the unsecured creditors:
ensuring all the Federal Taxes, amounts owing to EPF and
SOCSO are paid, after the Companies Winding Up Order.
ensuring all company contracts (including employee contracts)
are completed, transferred or otherwise brought to an end, after
the Companies Winding Up Order;
carry on the business with a view of eventually ceasing the
company's business, not withstanding the Companies Winding
Up Order;
settling any legal disputes, the liquidator may have to take legal
advice to do that, after the Companies Winding Up Order;
selling any assets by Public Tender, Public Auction or Private
Treaty;
collecting in money owed to the company, the liquidator may
have to take legal actions to do that; and
distributing any funds to creditors (which is called a dividend)
and returning share capital to the shareholders (any surplus
after repayment of all debts and share capital can be distributed
to members, that is, shareholders).
The distribution will be on the basis of "Pari passu".
Pari passu is a Latin phrase that literally means "on equal
footing. In the Companies Winding Up sense, for the same
class of creditors, each creditor will get the same percentage of
their debts. For example if there is a 10% distribution, the
creditor that is owed RM2 million will get RM200,000 as
dividend; the creditor that is owed RM4 million will get
RM400,000 as dividend;
When these things have been done the Official Receiver, now
known as the Director General of Insolvency or liquidator
applies to have the company removed from the register at
Companies Commission of Malaysia and dissolved, which
means the company ceases to exist.
For the amounts available to the unsecured creditors:
ensuring all the Federal Taxes, amounts owing to EPF and
SOCSO are paid, after the Companies Winding Up Order.
ensuring all company contracts (including employee contracts)
are completed, transferred or otherwise brought to an end, after
the Companies Winding Up Order;
carry on the business with a view of eventually ceasing the
company's business, not withstanding the Companies Winding
Up Order;
settling any legal disputes, the liquidator may have to take legal
advice to do that, after the Companies Winding Up Order;
selling any assets by Public Tender, Public Auction or Private
Treaty;
collecting in money owed to the company, the liquidator may
have to take legal actions to do that; and
distributing any funds to creditors (which is called a dividend)
and returning share capital to the shareholders (any surplus
after repayment of all debts and share capital can be distributed
to members, that is, shareholders).
The distribution will be on the basis of "Pari passu".
Pari passu is a Latin phrase that literally means "on equal
footing. In the Companies Winding Up sense, for the same
class of creditors, each creditor will get the same percentage of
their debts. For example if there is a 10% distribution, the
creditor that is owed RM2 million will get RM200,000 as
dividend; the creditor that is owed RM4 million will get
RM400,000 as dividend;
When these things have been done the Official Receiver, now
known as the Director General of Insolvency or liquidator
applies to have the company removed from the register at
Companies Commission of Malaysia and dissolved, which
means the company ceases to exist.
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