4. Compulsory Winding-Up (Nov 2010) * Total 334 days (From 1 Jan until 30 Nov 2010) 1536 registered cases (Until Nov 2010) 4.5988* companies per day Prepared by CHAN YEE FEI
5. OUTLINE 5. Charges from Liquidation Definition and related law 6. Defenced from Liquidation 3. Date of commencement 4. Process of Liquidation 2. Type of Liquidation 7. Effects of Liquidation on Directors Prepared by CHAN YEE FEI
7. CHAPTER 1 Definition of LIQUIDATION A method whereby the corporate structure of the company is dismantled and its property administered for the benefit of the creditors and members. Law governing LIQUIDATION exercise Companies Winding-Up Rules 1972 Companies Act 1965 Bankruptcy Act 1967 Sales Tax Act 1972 Service Tax Act 1975 Prepared by CHAN YEE FEI
11. CHAPTER 2 Section 218(1) of CA 1965 Insolvent company which is triggered by a court order on the application. Example of applications: ___________________________________ It required the petitioner. Section 218 of CA 1965 Solvent company which is triggered by a court order on the application. Example of situations: ______________________________________ Prepared by CHAN YEE FEI
13. CHAPTER 2 Members’ Voluntary Liduidation (MVL) Section 257 of CA 1965 Liquidation of a solvent company. Director’s opinion. Company is able to pay debts within 12 months after the commencement. Creditors’ Voluntary Liduidation (CVL) Section 255 of CA 1965 Liquidation of an insolvent company. Directors make declaration. Company do what? Meet their creditors Lodge to Registrar and Official Receiver (OR) Prepared by CHAN YEE FEI
15. CHAPTER 3 CWU Section 219 (2) of CA 1965 Filling the petition VWU Section 255 (6) of CA 1965 Lodgement of declaration; Passing the resolution. Prepared by CHAN YEE FEI
21. CHAPTER 5 Pay me back my money! Prepared by CHAN YEE FEI
22. CHAPTER 5 Section 218 (1)(e) of CA 1965 Section 218 (2) of CA 1965 Malayan Plant (Pte) Ltd v Moscow Narodny Bank Ltd Court may make an order to winding-up a company when it is unable to pay its debts. Substantial wealth which cannot be realized immediately. Debt ≥ RM500. Period ≥ 3 weeks (21days) of the service of the notice Prepared by CHAN YEE FEI
23. CHAPTER 5 How to justify an authorized agent? Prepared by CHAN YEE FEI
24. CHAPTER 5 Section 218 of CA 1965 Sri Hartamas Development SdnBhdv MBF Finance Bhd Notice of demand leave it at the registered office under his hand/hand of his agent lawfully authorized. Seal of the company is not required. Solicitor who signed the notice issued was duly appointed agent with authority. Section 350 of CA 1965 WengWah Construction Co SdnBhdvYikFoong Development SdnBhd Actual physical delivery by postman was an effective service. Service can be done by registered post. Prepared by CHAN YEE FEI
25. CHAPTER 5 Old address? New address? Prepared by CHAN YEE FEI
26. CHAPTER 5 r 194C(WU)R 1972 Valid It was not served to the current registered address of debtor company is due to the negligence of Registrar of Companies in not updating the record. Old address cannot be intended as a shield company Prepared by CHAN YEE FEI
30. CHAPTER 6 Lim TokChiow & Anor v Dian Tong Credit & Development SdnBhd Invalid It is merely in pending during the court, affidavit must be made in some course Cannot be verify where there are no existent at the time it was sworn Prepared by CHAN YEE FEI
31. CHAPTER 6 r 24 of the Rules Re NKM Holdings SdnBhd Invalid Total 4 times in 2 local newspaper and 1 time at government gazette before 7 days from the date of hearing Purpose: to inform other creditord may have a stake in the affairs of the company Prepared by CHAN YEE FEI
32. CHAPTER 6 r 194(1)of the Rules Court may cure any formal defects or irregularities unless there is substantial injustice caused which cannot be remedied by an order of court. E.g: Hong Leong Finance Bhd v Delta Derive (M) SdnBhd Ann Joo Metal SdnBhd v Pembenaan MY ChahayaSdnBhd Prepared by CHAN YEE FEI
34. CHAPTER 7 Section 256(2) Section 256(1) Section 226(3) The power of the directors The company Any transfer of shares Legal action by directors against company Prepared by CHAN YEE FEI
35. End End of Presentation Prepared by CHAN YEE FEI
