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For those who are on the verge of closing down their business and searching for sweeping, uncomplicated, and economical ways of doing so, the strike off company in Malaysia process is the best option. Striking off a company in Malaysia is the exact choice for many business owners who have dormant businesses which don't operate any longer and want to avoid those annual costs associated with compliance. In this article, we will go into details on what it means to strike off a company in Malaysia, the requirements for this act, and the procedure to take.
The process of the strike-off company in Malaysia signifies the voluntary removal of a company name from the official register of companies maintained by the Companies Commission of Malaysia (SSM). Under Section 550 of the Companies Act 2016, the directors and shareholders may apply to strike off a company in Malaysia if it is no longer in business and has no outstanding debts.
The major reason for any business to strike off companies in Malaysia is to effectuate the legal closure of these companies instead of going through the lengthy and expensive process of liquidation. The moment the strike-off company in Malaysia is complete, the entity has no separate legal identity and cannot conduct any business activities.
It must also be noted that upon the strike off company in Malaysia, all the assets of the company, if any, will vest in the Registrar. Hence, companies must dispose of all assets under their ownership before applying to strike off companies in Malaysia.
Strike Off Company in Malaysia Made Simple
So, what is the actual strike off company meaning? A strike-off company is the term for a procedure that is legal in dissolving an enterprise by removing its name from the official register. In other words, a company without a business, inactive, and without any liabilities would mostly apply for a strike-off.
Basically, the strike-off company, meaning under the laws of Malaysia, is very clear. Once a company gets struck off, it's no longer in existence and, then cannot enter into any contracts or conduct any business. After applying the strike-off company meaning, the shareholders and the directors cease to be liable for any statutory compliance.
Reasons for which a strike off company meaning is often considered are:
Understanding the strike-off company meaning is important because once the decision is made to remove a company, restoration shall only be available by court order after a period of up to seven years.
Strike Off Company Meaning & Why It's Important
The SSM governs the procedure to strike off a company in Malaysia, and one has to follow the procedure at every stage very carefully, otherwise, the application may be rejected or penalties imposed. Here is a detailed step-by-step guide on the procedure to strike off the company in Malaysia:
Further, to avoid any delays and legal implications, it remains extremely vital to observe each of the steps in the procedure to strike off the company in Malaysia.
Procedure to Strike Off Company in Malaysia Steps
Many people wonder whether striking off a company with debts is possible. According to Malaysian law, striking off a company with debts is strictly prohibited. The company must have no outstanding debts before applying.
Striking off a company with debts can expose directors to legal action by creditors or regulatory bodies. Therefore, it is mandatory to clear all:
If a company attempts to strike off a company with debts, creditors can file an objection during the public notice period. SSM will reject the application if any valid objection is raised related to striking off a company with debts.
If your company is unable to clear its debts, the only alternative to striking off a company with debts is to initiate liquidation (winding-up) under court supervision.
Striking Off a Company with Debts Explained
If your company meets all eligibility criteria, you can proceed to apply to strike off and dissolve a company through SSM. Below is the proper process to apply to strike off and dissolve a company:
It is important to understand that once you apply to strike off and dissolve a company, the process is irreversible unless a court order is obtained within seven years.
Apply to Strike Off and Dissolve a Company Easily
If you are thinking of striking off a company in Malaysia, careful consideration should be given to the company's financial aspect and the way forward. This process is a simple and inexpensive way of shutting down inactive or non-operational companies without a winding-up process. But proper adherence to the legal procedure is imperative to prevent unnecessary delays or repercussions.
By being aware of the strike-off company meaning and following the right procedure to strike off companies in Malaysia, the owners can rightly and effectively proceed to close down their company. Ensure that the company has no debts, as it will not be possible to strike off a company with debts. Therefore, if your company meets all the requirements, you will be able to strike off and dissolve a company and achieve a smooth closure.
Do contact a corporate service provider to manage the application and ensure that SSM requirements are complied with; a consultant will ensure that you are taken step by step.
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