Due to poor business performance or the company’s dormancy (no activity), business owners may close down their Limited Liability Partnership (LLP) in Malaysia. If the owner(s) of a LLP in Malaysia decides to shut down the business, they must understand how to do so. This article will explain the processes and costs involved in formally closing an LLP in Malaysia.

An LLP in Malaysia can be closed down or dissolved in three main ways, depending on the circumstances. The first is through compulsory winding-up by the court, which typically occurs when the LLP cannot pay its debts or has violated legal requirements.

The second is voluntary winding-up by the partners, where they mutually agree to close the business and settle its affairs. Lastly, an LLP can be dissolved through striking-off by the Registrar (SSM). In this process, the Registrar removes the LLP from the register, often due to inactivity or failure to comply with statutory obligations. Each method has specific procedures and requirements that must be followed.

The most common method is the voluntary winding-up, which is initiated by one of the LLP’s partners after the LLP has ceased operations and discharged all of its debts and liabilities. Therefore, we will focus on this method by taking you through the process and costs of closing an LLP in Malaysia.

A process on How to Close an LLP Company in Malaysia

The following outline below provides an overview of the key steps in closing a Limited Liability Partnership (LLP) in Malaysia through the voluntary winding-up method. This process typically requires careful planning and adherence to legal requirements to ensure a smooth and compliant closure of the LLP.

1. The LLP must obtain closure confirmation from EPF/Perkeso/LHDN.
2. It must submit the final tax return to LHDN and obtain a written notice from the Inland Revenue Board (IRB).
3. Upon obtaining clearance from IRB, a notice of winding-up shall be sent to all partners of the LLP.
4. A notice has to be published in widely circulated Malaysian newspapers to declare such a winding-up.
5. SSM will declare the LLP is dissolved if no objection is received. If there is any objection, upon withdrawal of such objection by the partners/creditors or when SSM decides the objection made is without justification.

Costs to Close an LLP in Malaysia

The cost to close a Limited Liability Partnership (LLP) in Malaysia is approximately RM4,500. This amount covers the government filing fees, which are required to process the closure, and the cost of publishing the necessary notice in a local newspaper.

Newspaper advertising is an essential step in informing the public and creditors about the LLP’s closure, ensuring that all relevant parties are aware of the process.

Before knowing how to close a  LLP in Malaysia, it is vital 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 your LLP in Malaysia properly and in compliance with all legal requirements. Failing to do so could result in unnecessary complications, legal penalties, or financial burdens.

At InCorp Malaysia, we provide an extensive range of services and expert guidance to help you navigate the process of closing an LLP smoothly. Our team ensures that every step, from documentation to deregistration, is handled efficiently, giving you peace of mind.