SESSION 3 NEW GUIDELINES ON STRIKING OFF OF COMPANIES & ASSET MANAGEMENT OF DISSOLVED COMPANIES

Transcription

1 SESSION 3 NEW GUIDELINES ON STRIKING OFF OF COMPANIES & ASSET MANAGEMENT OF DISSOLVED COMPANIES By: Norhaslinda Salleh Head of Section, Registration Services Division Suruhanjaya Syarikat Malaysia

2 MODE OF CESSATION OF COMPANY WINDING UP Winding Up By The Court Members INCORPORATION Voluntary Winding Up Creditors STRIKING OFF (REGISTRAR S POWER) Section 549 (a) Company is not carrying business or in operation (b) Company has contravened the Companies Act 2016 (c) Company is being used for unlawful purposes (d) Company is being wound up but falls under circumstances (i), (ii) and (iii)

3 APPLICATION TO STRIKE OFF COMPANIES SECTIONS 549/550

4 INTRODUCTION A process where the Registrar exercises his discretionary power to strike off company off the register through application made to him by a director, member/shareholder or liquidator (Section 550) of a company if : The company is not carrying on business or not in operation under Section 549 (a); or The company is being wound up but no liquidator is acting under Section 549 (d)(i);

5 INTRODUCTION The affairs of the company has been fully wound up but the liquidator has been in default in lodging any return for a period of 6 months under Section 549 (d)(ii); or The affairs of the company have been fully wound up but the company has no assets or assets available are not sufficient to obtain a dissolution order of the Court under Section 549 (d)(iii).

6 REGISTRAR S OWN MOTION S.549 (a) to (d) S. 549 (a)the company is not carrying business or is not in operation; (b)the company has contravened the Act; (c)the company is being used for unlawful purposes or incompatible with peace, welfare, security, public interest, pubic order, good order or morality in Malaysia; REGISTRAR S POWER BY APPLICATION OF DIRECTOR/MEMBER/ LIQUIDATOR S. 549 (a) or (d) S. 549 (a)the company is not carrying business or is not in operation; (d) the company is being wound up by the court but (i)there is no liquidator acting;

7 REGISTRAR S OWN MOTION Con t S.549 (a) to (d) S. 549 (d) the company is being wound up by the court but (i)there is no liquidator acting (ii)the affairs of the company is fully wound up but liquidator failed to lodge any return (a)the affairs of the company is fully wound up but there is no sufficient fund to pay the cost of obtaining a dissolution order REGISTRAR S POWER BY APPLICATION OF DIRECTOR/MEMBER/ LIQUIDATOR S. 549 (a) or (d) S. 549 (i)the affairs of the company is fully wound up but liquidator failed to lodge any return; (ii)the affairs of the company is fully wound up but there is no sufficient fund to pay the cost of obtaining a dissolution order

8 Not a guarantor corporation Has not made any return of capital Not involved in legal proceeding No assets & liabilities G/LINES Company s Info with SSM is up to date No outstanding charges No outstanding penalties & compounds No outstanding tax or other liabilities REQUIREMENTS UNDER SSM GUIDELINES - 9 JUNE 2017

9 Cover Letter APPLICATION PROCEDURES Members Resolution Management s Account Template Section 550 Application to Strike Off Company - declaration by Applicant that company fulfills all requirements If Applicant is a subsidiary company, additional requirements : (a) Consent Letter from the Holding Company (HC) signed by one of its director and printed on the HC s letterhead Fee RM100

10 APPLICATION PROCEDURES Con t (b) Declaration that Subsidiary Co (SC) and HC itself is not subject to or involved in any investigation or prosecution by any authority to the best knowledge of the director/shareholder signing the consent letter (c) If co owned by other shareholders, the consent letter to be signed by all shareholders

11 TEMPLATE SECTION 550 (SCHEDULE B- PRACTICE DIRECTIVE 1/2017

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13 PROCESS UNDER CA 1965 & CA 2016 Notice Period Section 308 CA 1965 Section 551 CA 2016 Notice Period 1 month Notice 308 (1) Notice 551 (1) 30 days 3 months Notice 308(2) Notification 551 (1) will be published in SSM s website At the expiration of 308(2) notice 30 days First Gazette Gazette 551 (3) At the expiration of 30 days of publication of notification in SSM s website Notice 308(4) Second Gazette

14 THE PROCESS Section 551 (1) 1 st Notice by normal post to company s registered address Section 551 (1) 2 nd Notification published in SSM s website STATUS EXISTING (Striking off in process) EXISTING (Striking off in process) Section 551(3) Gazette DISSOLVED

15 SSM S PRACTICE NOTE NO. 6/2010. THE GUIDELINES FOR APPLICATION TO STRIKE OFF A COMPANY WHICH IS BEING WOUND UP PURSUANT TO SECTION 549 (d) (i) (ii) and (iii)

16 OBJECTIVES To facilitate voluntary application from interested parties (liquidator or shareholder) to strike-off a company which is being wound-up (court or voluntary) but yet to be dissolved To provide for the requirements for application under Section 549 (d) (i) (ii) and (iii)

17 REGISTRAR S DISCRETIONARY POWER UNDER SECTION 594 (d) No liquidator is acting CIRCUMSTANCES Company s affairs are fully wound up & liquidator failed to lodge any return for more than 6 months Company s affairs has been fully wound up & company has no assets or assets are not sufficient to pay for costs of obtaining court order to dissolve the company

18 CIRCUMSTANCES SECTION 549 (d) (i) : Where No Liquidator is Acting Death or resignation of a liquidator & no substitution after 1 year Liquidator s where about is unknown for more than 1 year Liquidator s failure /refusal to lodge his notice of appointment with ROC and OR within 6 months of his appointment Section 513 Liquidator s failure/refusal to carry out his duties as a liquidator for more than 6 months of his appointment Liquidator ceases to act for more than 1 year Registrar s view that no liquidator is acting for the co for whatever reason

19 SECTION 549 (d) (i) : Where No Liquidator is Acting

20 Con t Applicable to voluntary winding up Only shareholders are eligible to apply Specific Criteria to be fulfilled by Shareholders in the Application to strike off a co which is being wound up by members voluntary winding up Co is wound up by Members Voluntary Winding Up 1. Liquidator s failure to lodge the return (S514/F75) for more than 1 year ; 2. Co. has no fund to appoint a new liquidator; 3. Consent of the other shareholders must be obtained; 4. No outstanding penalties/compound under CA 1965/ No outstanding liabilities with IRB or other Govt. Dept; and 6. Co. has no involvement in any legal proceeding

21 Con t Applicable to voluntary winding up Only shareholders are eligible to apply Specific Criteria to be fulfilled by Shareholders in the Application to strike off a co which is being wound up by members voluntary winding up Co is Wound up by Creditors Voluntary Winding Up 1. Liquidator s failure to lodge the return (S514/F75) for more than 1 year; 2. Co. has no involvement in any legal proceedings; and 3. Consent of all creditors must be obtained

22 SECTION 549 (d) (ii) : Affairs of the company is fully wound up & for period of 6 months the liquidator has failed to lodge any return

23 Applicable to voluntary winding up Shareholders or Liquidator may apply Specific Criteria for Application by Shareholder Co is wound up by Members Voluntary Winding Up 1. Affairs of the co. has been fully wound up; 2. Liquidator failed to file the return (S459(3)/F69) for more than 6 months after the holding of the final meeting; 3. No outstanding penalties/compound under CA 1965/2016; and 4. Co. has no involvement in any legal proceedings.

24 Con t Applicable to voluntary winding up Shareholders or Liquidator may apply Specific Criteria for Application by Shareholder Co is Wound up by Creditors Voluntary Winding Up 1. Affairs of the co has been fully wound up; 2. Liquidator failed to file the return (S459(3)/F69) for more than 6 months after the holding of the final meeting; and 3. Co. has no involvement in any legal proceedings

25 Specific criteria for Application by Liquidator Co is wound up by Members Voluntary Winding Up 1. Affairs of the co. has been fully wound up; 2. Co has no fund or fund is insufficient to pay for the costs of holding the final meeting; 3. Co must lodge the latest return (S514/F75) to enable Registrar to form opinion of para. (2); 4. Obtain other shareholders consent 5. Liquidator has no outstanding penalties/compound under CA 1965/2016; 6. Co. & Liquidator (in his capacity as liquidator of the co.) has not involved in any legal proceedings; and 7. No outstanding liabilities with IRB & other Govt. Dept

26 Specific criteria for Application by Liquidator Co is Wound up by Creditors Voluntary Winding Up 1. Affairs of the co. has been fully wound up; 2. Obtain consent from creditors of co.; 3. Co has no fund or fund is insufficient to pay for the costs of holding the final meeting; 4. Co must lodge the latest return (S514/F75) to enable Registrar to form opinion of para. (3); 5. Co. & Liquidator (in his capacity as liquidator of the co.) has not involved in any legal proceedings; 6. Liquidator (in his capacity as liquidator to the co.) has no outstanding penalties/compound under the CA 1965/2016

27 SECTION 549 (d) (iii) Affairs of the company are fully wound up by the court & there is insufficient fund to obtain a dissolution order

28 Applicable to compulsory/court winding up Application can only be made by Liquidator Specific Criteria 1. The affairs of the co. have been fully wound up; 2. The co must lodge the latest return (S514/F75) to enable the Registrar to form his opinion of para. (a); 3. The co and liquidator (in his capacity as the liquidator for the co) has no been involved in any legal proceedings; and 4. The liquidator (in his capacity as the liquidator of the co) must not have any outstanding penalties/compound under the CA 1965.

29 APPLICATION PROCEDURES Written application as per the revised template (will be uploaded soon in Schedule B, Practice Directive 1/2017) must be submitted together with a processing fee of RM to the Director, Registration Services Division (RSD) The striking off exercise is effected through the issuance of notice and notification under Section 551 (1) and publication of Gazette Section 551. Upon publication of the Gazette under Section 551 (3), the name of the company shall be struck off from the register.

30 EFFECT OF STRIKING-OFF Company ceases to exist : company is dissolved when the Registrar published the name of the company which has been struck off in the Gazette under Section 551(3). Liability of officer of the company (e.g. director) continues and may be enforced as if the company has not been dissolved Section 554 (1) (a) Although the name of company has been struck off the register, the Court still have the power to wind up the company Section 554 (1) (b)

31 APPLICATION TO WITHDRAW Section 551 (1) 1 st Notice 30 days Section 551 (1) 2 nd Notification published in SSM s website 30 days Section 551(3) Gazette Withdrawal/Objection may be lodged at anytime between the issuance of the 1 st Notice and prior to the lapse of the 2 nd Notification under S. 551(1)

32 SECTION 552 OBJECTION TO STRIKING OFF APPLICATION Objection to the striking off application may be made at any time before the expiration of 30 days from the date of publication of notification in SSM s website under Section 551 (1); The application may be lodged using the template in Item 86, Schedule B, Practice Directive 1/2017 Notice of Intention to Object the Striking off of a Company on any of the grounds referred to in Section 552(1) with supporting documents. The grounds are as follows : a) that the company is still carrying on business or there is other reason for it to continue in existence; b) that the company is a party to legal proceedings; c) that the company is in receivership or liquidation; or both;

33 SECTION 552 OBJECTION TO STRIKING OFF APPLICATION d) that the person is a creditor or a member or a person who has an undischarged claim against the company; e) that the person believes that there exists, and intends to pursue, a right of action on behalf of the company under Division 6 of Part III; or f) that, for any other reason; it would not be just and equitable to remove the company from the register. Payment of prescribed fee of RM (Item 28, Schedule of Fee (Regulation 8) in the Companies Regulations 2017)

34 SECTION 552 OBJECTION TO STRIKING OFF APPLICATION If the Registrar receives any objection from any person following the notification issued under section 551(1), the Registrar will not proceed with the application to strike off a company unless the Registrar is satisfied that : b) the objection has been withdrawn; c) any facts on which the objection is based are not, or are no longer correct; or c) the objection is frivolous and vexatious.

35 TEMPLATE SECTION 552 NOTICE OF INTENTION TO OBJECT STRIKING OFF APPLICATION (SCHEDULE B-PRACTICE DIRECTIVE 1/2017)

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37 SECTION 553 WITHDRAWAL OF STRIKING OFF APPLICATION Withdrawal of application may be made before the expiration of 30 days from the date of publication of the notice in SSM s website under Section 551 (1); The application must be made using the template in Item 87, Schedule B, Practice Directive 1/2017 Notice To Withdraw Striking Off Application to the Registrar indicating reasons for such withdrawal; and Payment of prescribed fee of RM500.00

38 TEMPLATE SECTION 553 NOTICE OF WITHDRAWAL OF STRIKING OFF APPLICATION (SCHEDULE B-PRACTICE DIRECTICE 1/2017)

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40 MORATORIUM PERIOD FOR APPLICATION TO STRIKE OFF COMPANIES (1 OCTOBER DECEMBER 2017)

41 PERIOD OF MORATORIUM From 1 October 2017 to 31 December 2017 Companies incorporated between 2002 to 2014

42 REQUIREMENTS : WHAT ARE BEING EASED Applicant is not required to submit the shareholders resolution. Company with outstanding penalties or compounds issued prior to the moratorium period will only be required to pay : a fixed amount of RM for each compound notice issued to the company; and a fixed amount of RM for each compound notice issued to each director of the company. Please refer to Guidelines For The Application To Strike-off The Name Of Defunct Companies Incorporated Between The Years Of 2002 To 2014 Under Section 550 Of The Companies Act 2016 in SSM s website.

43 REINSTATEMENT OF STRUCK OFF COMPANY S. 555(1)

44 REINSTATEMENT OF STRUCK OFF COMPANY S. 555(1) Application may be made by any person who is aggrieved by the decision of the Registrar By way of Court s Order only Application must be made within 7 years after the name of the company has been struck off Must lodge the sealed Order of Court with SSM with payment of RM Please refer to Garispanduan Berkenaan Permohonan Memasukkan Semula Syarikat in SSM s website. Status of company will be changed from Dissolved (D) to Existing (E) v

45 MANAGEMENT OF ASSET OF DISSOLVED COMPANY

46 LEGAL FRAMEWORK Section 556 Power of Registrar to represent dissolved company in certain circumstances Section 557 Outstanding assets of dissolved or struck off company to vest in Registrar Section 558 Power of Registrar to dispose vested property

47 LEGAL FRAMEWORK S.556 S.557 S.558 Representative Power Vesting of Assets Sell, Dispose, Deal with Assets

48 GUIDELINES Guidelines For Application For the Registrar of Companies To Act as The Representative of Dissolved Companies Pursuant to Section 556 of the Companies Act 2016 in our website. Guidelines in Respect of Application To Purchase Immovable Property of Dissolved Companies Pursuant to Section 558(2) of the CA 2016 in our website.

49 APPLICATION FEES Companies Regulations 2017 Schedule of Fees (Reg. 8) No. Matter Fees (RM) 30 Application under Section 556 (a)for the Registrar to represent dissolved company (b) For the Registrar to execute or sign any relevant instrument or document relating to the representation of dissolved company for each execution or signature of instrument or document 31 Application for the Registrar to sell or dispose of property of dissolved company under Section % from the proceed of sale or disposal of the property + costs incurred incidental to the sale or disposal of the property

50 EXAMPLE OF ASSETS Movable or Immovable : Property Cash Shares Motor vehicle Intellectual Property

51 REQUIREMENT UNDER SECTION 556 OF (REPRESENTIVE POWER) The company must be dissolved either by way of winding up or striking off. The company if it still existed, would be legally or equitably bound to carry out, complete or give effect to some dealing, transaction or matter Purely administrative act Effect of the execution is the same as if it has been executed/signed by the company.

52 REQUIREMENT UNDER SECTION 557 The company must be dissolved either by way of winding up or striking off The asset/property can be movable or immovable The company has the right over the property or has a disposing power at the time of the dissolution and the asset is not held on trust The asset/property of the dissolved company become bona vacantia (ownerless) and by force of this section, it is vested in the Registrar of Companies

53 REQUIREMENT UNDER SECTION 558 Upon proof that property is vested in the Registrar under S. 557, Registrar may sell, dispose or deal with such estate or interest in the property The Registrar may sell, dispose or deal with the property either solely or in concurrence with any other person in such manner for such consideration by : Public Auction; Public Tender; or Private Contract.

54 THANK YOU Striking Off Asset Management