Due to poor business performance or inactivity, business owners may decide it’s time to close their Sdn Bhd company. If you’re wondering how to close a Sdn Bhd company in Malaysia, it’s important to understand the necessary steps. In this article, we’ll explain the processes and costs involved in formally shutting down a Sdn Bhd company in Malaysia.
We will take you through 2 ways on how to close a Sdn Bhd company in Malaysia which are 1) Strike off and 2) Winding up. We have summarized the differences in the processes below:
1. Strike Off a Sdn Bhd Company
Criteria to Strike Off a Company
Section 551 of Companies Act 2016 grants the rights to the shareholders of the company to apply to SSM to strike off the company. This is provided that the following conditions are met:
- The company has NOT commenced business since incorporation or is NOT carrying on business or ceased business operations for quite some time;
- The company has NO intention to commence or carry on its business or operation in the future;
- The company has NO assets and liabilities including outstanding charges in the Register of Charges;
- The company has insufficient funds to pay for winding up expenses;
- The company has NO outstanding penalties or offer of compounds under the Companies Act 2016;
- The company has NO outstanding tax or other liabilities and is NOT indebted to any government agencies in Malaysia;
- The company has NOT made any return of capital to the shareholders;
- The information of the company with the Registrar as shown in the “print-out” is up to date;
- The company is NOT involved in any legal proceeding within or outside Malaysia;
- The company is NOT holding company or a subsidiary of other corporate body;
- The company is NOT a “Guarantor Corporation”
Account closure confirmation from Government Agencies
The company will need to obtain closure confirmation from EPF/Perkeso/LHDN. Furthermore, if there is a tax refund, the company should only proceed with bank account closure and strike off the application upon receiving the tax refund.
Audited Accounts Requirement
For companies which were previously active or those with assets and liabilities, SSM will require them to submit up to date audited accounts prior to accepting the strike off application.
However, SSM may accept unaudited management accounts for companies with no assets and liabilities. Nonetheless, SSM has the sole discretion to require audited accounts after the strike off application.
Processing Time
It usually takes between 6 to 12 months to complete the whole strike-off process.
Strike off initiated by SSM
In accordance with Section 549 of Companies Act 2016, SSM may strike off a company from the register provided if it fails to submit the company’s annual return for three years or more.
Costs to strike off a company
It will be in the range of RM2,500 to RM3,500 depending on the complexity of the company status.
2. Winding Up a Sdn Bhd Company
Criteria
The winding up process is more complex as it includes Voluntary Winding Up and/or Compulsory Winding Up. Have a look at the article below that covers the processes involved.
Related Read: Overview on restructuring and corporate rescue options for businesses in Malaysia »
In short, the winding up process of a Sdn Bhd company will involve application to the court and appointment of liquidator to oversee the entire winding up process. Hence, the cost to wind up a company will usually start from RM10,000.
Before knowing how to close a Sdn Bhd company in Malaysia, it is important to keep your options open on the possible restructuring plans to save your company. Consider closing down your business as your last resort.
If not, you are strongly recommended to seek professional advice to ensure that you close a Sdn Bhd company in Malaysia properly.
Need help with Striking Off a Company?
At InCorp Malaysia, we provide an extensive range of services and guidance to ease the process of closing a Sdn Bhd. Our team of experienced professionals will guide you through the necessary steps and ensure that everything is done according to the proper legal procedures.
FAQs About Closing Sdn Bhd in Malaysia
- The two key ways to close an Sdn Bhd company in Malaysia are a strike-off or winding up.
- Companies with no assets and liabilities can submit the unaudited management accounts to the SSM. However, please note that SSM has the sole discretion to require audited accounts after the strike-off application.
- The process takes 6 to 12 months to complete the strike-off process.
- To strike off a company, it costs between RM2,500 and RM3,500, depending on the complexity of the company's status. For winding up a company it costs RM10,000 onwards.
Get in touch with us today for more information!
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