Alex Chang Companies Winding-Up Handbook

What is compulsory winding up insolvency liquidation

Chinese 中文

English Version

Versi Bahasa

What is compulsory winding‑up insolvency liquidation


Compulsory winding-up insolvency liquidation in Malaysia is pursuant to section 218 of the Act.



It is a legal process by which the Official Receiver, now known as the Director General of Insolvency or a liquidator is appointed by an order of the court to ‘wind up’ the affairs of a limited company, Sdn Bhd or a Berhad.


At the end of the process, after a winding up order is granted the liquidation process of the company begins. Winding up does not mean that the creditors of the company will necessarily get paid.  The purpose of winding up a company is to ensure that all the company’s affairs have been dealt with properly.


How to Get Paid By A Wound Up Company

We have helped a client to achieve just that, click here to read more.



Get Paid Ahead of the Bankers

To find out more on how to get paid Ahead of the Bankers- the Concept of Pay Up or Wind Up click here.



Stay of a Winding Up Order

A winding up order may not be set aside under section 243 of the Companies Act 1965 or sections 493, 493 the Companies Act 2016.  Under suitable circumstances, a winding up order may be ‘stayed’, the effects will be similar (but not entirely the same) as a winding up order being set aside.



Priority Creditors and Distribution of Assets to the unsecured creditors

The duties of the Liquidator of a wound up company are as follows:



-ensuring all the Federal Taxes, amounts owing to EPF and SOCSO are paid


-ensuring all company contracts (including employee contracts) are completed, transferred or otherwise brought to an end;


-carry on the business with a view of eventually ceasing the company’s business;


-settling any legal disputes, the liquidator may have to take legal advice to do that;


-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).


When these actions have been completed the Liquidator will apply to have the company removed from the register at Companies Commission of Malaysia and dissolved.


“The Chinese Version is a translation to the best efforts and if there is a conflict between the translation and the English version please refer to the English version.”


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