After Companies Winding Up

What happens after compulsory winding-up?

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After Companies Winding Up
After Companies Winding Up
Versi Bahasa Malaysia


Distribution of Assets

From the assets of the wound up company (through a compulsory winding up)  available to be distributed  the unsecured creditors, the liquidator will:

  • ensure that all the Federal Taxes, amounts owing to EPF and SOCSO are paid, after the Companies Winding Up Order.
  • ensure that 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;
  • settle any legal disputes, the liquidator may have to take legal advice to do that, after the Companies Winding Up Order;
  • sell any assets by Public Tender, Public Auction or Private Treaty;
  • collect monies owed to the company, the liquidator may have to take legal actions to do that; and
  • distribute 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).
  • whether the creditors will receive their claims in full will depend on the value of the assets realised by the liquidator.

The distribution will be on the basis of “Pari passu”.

Definition of Pari Passu

Pari passu, a short definition: everyone receiving the same percentage.

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;


After the distribution is completed the Liquidator or the  Official Receiver, now known as the Director General of Insolvency  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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