What Is A Liquidator in Malaysia?
A liquidator in Malaysia is an individual that is appointed to manage the affairs of the company in a winding up scenario- they are roped in to ensure that (before winding up the company) all the companies assets are being sold to settle the debts of the company to the best they can.
The Law in Liquidators
A. When do they come into picture?
- By a member’s voluntary winding up where the company is solvent and the liquidator is appointed by the members at the members’ meeting; or
- By a creditors’ voluntary winding up where the company is insolvent and the liquidator is appointed by the creditors at the creditors’ meeting.
B. Who is not qualified to be appointed as a company liquidator?
- The person not an approved liquidator;
- The person is indebted to the company or to a related company5 not exceeding RM25,000.00;
- The person is an officer of the company;
- The person is a partner, employer or employee of an officer of the company;
- The person a partner or employee of an officer of the company;
- The person has assigned his estate for the benefit of his creditors or has made an arrangement with his creditors under any law relating to bankruptcy;
- The person is bankrupt/ has become bankrupt;
- The person is convicted of an offence involving fraud or honesty punishable on conviction by imprisonment for 3 months or more.
*point (1)-(3) is not applicable to those appointed in a members’/ creditors’ voluntary winding up scenario6.
*If a person is a member of a recognized professional body, he may apply to be a liquidator and circumvent point (1), subject to the approval of the minister charged with the responsibilities for companies7.
*A person cannot be appointed as a company liquidator unless8:
- He has consented in writing prior to his appointed;
- If he is already appointed as a liquidator before the commencement of the Companies Act9.
C. Who is considered an “approved” liquidator?
Basically, in order to be an approved liquidator, a person has to apply for a license to be one- he must be in possession of a liquidator licence granted by the Accountant General’s Office pursuant to the Act10.
D. What are the conditions to apply for a license?11
- Must be a Malaysian citizen or permanent resident;
- A member of a recognised professional body under Section 433(5) on the Act and hold a valid practising certificate;
- Not a bankrupt, not been convicted in the immediate past 5 years whether within or outside Malaysia of any offence involving fraud or dishonesty relating to the promotion, formation or management of anybody which punishable on conviction with imprisonment for 3 months or more;
- Possess sufficient working experience in liquidation practice as follows:
- 5 years of full-time working experience in the field of liquidation;
- Candidates who have left liquidation practice, but still within a 3 years period prior to the application to be approved company liquidators, are still eligible to apply.
- For candidates who have left liquidation practice for more than 3 years, they must work for at least 1 year in insolvency in the Malaysian environment.
- Experience in other countries can also be considered. However, candidates must work for at least 1 year in liquidation in the Malaysian environment.
- A sponsor letter from an approved liquidator who has supervised the candidate; and
- Must have the capacity in carrying out the duties as a liquidator.
E. What can a liquidator do?
Below are some examples of the powers and duties that are available to a liquidator:
- Exercise the powers conferred to him under the 12th Schedule of the Act (in members/ creditors voluntary winding up);
- Exercise the powers conferred to him under the 11th Schedule of the Act (in a voluntary winding up scenario);
- Call for creditor’s meeting in case of insolvency12;
- Accept shares as consideration for the sale of property of company13;
- Summon members and creditors of the company to give the latest report (an account of the acts of the liquidator and dealings and of the conduct of the winding-up during the preceding years) after a certain year from when the winding up of a company first commenced14;
- Pay off the debts of the company.
Other related articels:
- Winding Up 101
- To Restrain or Not to Restrain Winding Up Proceeding
- Can You Wound Up A Money Lending Company?
Consult with Business Lawyer and Company Secretary for more info about Liquidator and Company Winding Up:
1. Section 432 (2), Companies Act 2016.
2. Section 432 (2)(a)-(b), Ibid.
3. Section 433, Ibid,
4. Section 433 (a)-(h), Ibid.
5. By virtue of section 7 of the Companies Act 2016.
6. Section 433 (3), Companies Act 2016.
7. Section 433 (4)-(5), Ibid.
8. Section 433 (7)-(8), Ibid.
12. Section 447, Companies Act 2016.
13. Section 457, Ibid.
14.Section 458 Companies Act 2016.