Winding up period extended 21 days 6 months

Debt Recovery Law In Malaysia and Legal Tips Winding Up

You Can Issue a Demand but you must wait 6 months to sue

Nuclear Bomb 

1 During the Movement Control Order (MCO), on April 10, 2020, our Minister of Domestic Trade and Consumer Affairs, the Honourable Datuk Alexander Nanta Linggi  struck  a nuclear bomb into the hearts of millions of creditors in the country:   you can issue a Statutory Notice  of Demand but can only file your winding up petition 6 months later. 

Quick Background 

2 Usually a creditor may file a winding up petition 21 days  after issuing a statutory notice, please click here for more details. For even more questions on companies winding up, please click here.

3 s465(1)(e) of the Companies Act 2016 (hereinafter the “Act”) reads as follows: 

“465  Circumstances in which company may be wound up by Court 
(1) The Court may order the winding up if-
(e) the company is unable to pay its debts;”

3.1 s466(1)(a) of the  Act 2016  reads as follows: 
“466  Definition of “inability to pay debts”
(1) A company shall be deemed to be unable to pay its debts if-
(a) the company is indebted in a sum exceeding the amount as may be prescribed by the Minister and a creditor by assignment or otherwise has served a notice of demand, by himself or his agent, requiring the company to pay the sum due by leaving the notice at the registered office of the company, and the company has for twenty-one days after the service of the demand neglected to pay the sum or to secure or compound for it to the satisfaction of the creditor;”

4 s466(1)(a) of the Act provided three parts,  

4.1 The amount owing may be determined by the Minister from time to time; 

4.2 The service of notice of demand; 

4.3 After 21 days, the creditor may file a petition against the debtor.

A Statutory Triple Jump 

5 What the Honourable Minister could do as prescribed by the Companies Act 2016 was only with respect to the amount owing, his power stops there. 

5.1  However  to amend the period from 21 days to 6 months, such power is not conferred onto the Minister by the Act; 

5.2 We believe  there was an oversight as the Minister must has thought that he had a power to amend the amount and therefore the  period as well via a Triple Jump skipping the tabling and passing of the amendment of the Act by a Bill of Parliament, the Royal Assent and the   Gazette Notification.    

Further Clarification 

6 We are seeking further clarification with the Companies Commission of Malaysia.  

6.1 With the greatest respect, we feel   that meanwhile the announcement of the Honourable Minister on extending  the  period cannot be upheld in court as the principal Act has not been amended. 


7 We will continue to assist our clients to issue Statutory Notices and commence a Companies Winding Up Petition after the expiry of 21 days. 

8 For more information on Companies Winding Up please refer to the following publications many of them with contributions from our firm.  

8.1  The Malaysian Court Forms;  

8.2 The Companies Winding Up Handbook; and 

8.3 The Halsbury Laws of Malaysia volume 6 on Companies Winding Up.

Alex Chang

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