guide to company striking off in malaysia

A Quick Guide To Company Striking Off In Malaysia

Sometimes a company stops doing business not because it’s in financial trouble, but because for whatever reason, shareholders no longer wish to continue operating. 

an empty office to show a company that is no longer operating and should be struck off
Maybe the office has become haunted.

Shareholders should then consider dissolving the company via a strike off application to SSM as covered in Section 550 of the Companies Act 2016.

Just as incorporating is how you start a company, striking off is how you properly end it. 

This guide provides an overview of the striking off process in Malaysia, including:

  • reasons for initiating a strike off
  • conditions to qualify for a strike off
  • the three stages involved
  • objecting to or withdrawing a strike off
  • reinstating a struck off company, and
  • the difference between striking off and winding up

Note: SSM can order a company to be struck off for non-compliance. We won’t discuss that much here as we doubt SSM officers need to refer to our blogs!

Let’s begin!

Reasons for striking off a company

Striking off means officially dissolving a company without assets, outstanding liabilities, or active legal proceedings, and can happen for several reasons:

  • Shareholders leaving, dying, or getting into disagreements
  • Company is dormant and shareholders don’t want to keep paying maintenance fees
  • Company has run out of funds to continue operating

Most commonly, a company is struck off by a because it is dormant, and the shareholders / directors would like to move on.

Conditions to qualify for striking off

Conditions to apply for a company strike off are laid out in Section 549 of the Companies Act and a strike off application may be submitted by a shareholder, director, or liquidator (if one is appointed).

Directors must obtain a resolution from shareholders approving the application to strike off the company due to being non-operational and there must be proof of attempts to find missing directors or shareholders.

In addition to the resolution to apply for a strike off, SSM must be satisfied that the company:

  • has no assets and liabilities
  • is not a holding company or Guarantor Corporation
  • has not returned any capital to shareholders
  • has closed all bank accounts
  • has no outstanding payments owed to any government agency
  • has lodged up-to-date statutory information with SSM
  • has no active legal proceedings within or outside Malaysia

Naturally, relevant documents such as financial statements and letters to missing shareholders must be submitted with the application.

3 stages of a company strike off application

The three broad stages of striking off a company are submitting the application, a public notification by SSM, and a publication in the Federal Gazette.

Stage 1: Application submission

The applicant submits an application to strike off the company (known as Appendix 1) with the documents listed in the corresponding strike off checklist (known as Appendix 2) including a RM100 fee to SSM.

Stage 2: Notification from SSM

SSM may issue a notice to the company saying that there will be a public notification of the striking off within 30 days of the date of the notice unless there is an objection.

Stage 3: Publication in Federal Gazette

After the 30-day period of public notification expires, SSM will publish the name of the struck-off company in the Federal Gazette (a publication of all government public notices).

Upon publication in the Gazette, the company will dissolve & cease to exist.

Strike off objections and withdrawals

We’ve included them in one section as they’re both covered in section 551(1) of the Companies Act.

Objecting to a strike off

Anyone who pays the RM300 fee can submit an objection to a striking off to SSM within 30 days from the date specified in the notice or publication for the following reasons:

  • The company is still operating or has reasons to continue its existence
  • The company is involved in legal proceedings
  • The company is in receivership or liquidation
  • The person is a creditor, member, or has an outstanding claim against the company
  • The person believes there is a legal action on behalf of the company
  • Any other just and equitable reason not to strike off the company

Until this objection is withdrawn, disproven, or shown to be baseless, the company cannot be struck off. 

Withdrawing a strike off application 

The applicant can cancel the striking off application within thirty (30) days from the specified date in the notice or publication by submitting a Notice of Withdrawal of Striking Off Application.

Include reasons for withdrawal and supporting documents, along with a fee of RM500.00 

Reinstating a struck off company

Section 555 of the Companies Act allows for petitions to reinstate a company within seven years of the striking off. 

If the Court finds the company did not actually meet the requirements to qualify for striking off at the time, it can order a full reinstatement of the company name and affected parties as closely to their original status as possible.

Difference between striking off and winding up a company

Both striking off and winding up a company mean formally dissolving it.

However, winding up is when there is a need for an independent third party (known as a liquidator) to take stock of company assets and liquidate them to settle debts and obligations before distributing any balance to shareholders based on equity.

hand squeezing lemon as ananalogy of a company liquidator function to liquidate a company during winding up
The lemon is the company.

Striking off is when the company has no assets or debts and shareholders simply don’t want to continue paying for its maintenance.

For that reason, striking off is simpler, faster, and much cheaper than winding up.

Either way, it is the end of a company but only part of an entrepreneur’s journey!

Let MISHU help with your striking off

MISHU’s team of Company Secretaries partners with legal professionals to help entrepreneurs swiftly strike of a company and we are committed to serving your best interests. Get in touch with us today! 

FAQs about company striking off in Malaysia

  • What are the conditions to strike off a company in Malaysia?
    💡In short, the company must be non-operational and possesses no assets or liabilities.

  • Can SSM strike off a company?
    💡Yes, SSM can request a company be struck off for failing to comply with statutory obligations.

  • How do you reinstate a struck off company in Malaysia?
    💡Dissatisfied parties have seven years from the date of the strike off to petition the Courts to reinstate a struck off company.

  • What is Section 550 of the Companies Act 2016?
    💡It outlines SSM’s power to strike off (dissolve) a company on its own accord or based on applications by company stakeholders.

  • What is the difference between strike off and winding up?
    💡Striking off is simply closing down a company that is non-operational, while a winding up is closing down a company that is operating and has assets and liabilities.

  • What happens to directors when a company is struck off?
    💡Nothing, but they must keep all registers, books, statutory records, accounting records and documents as required by the Companies Act for seven years after the company has been struck-off.
Powered by MISHU AI

Hello, I am Maya, your AI assistant. I have been trained to answer any questions about our services to make things easier and faster for you. Feel free to ask me anything!

Dont worry, for peace of mind, a human colleague will follow up after our chat to confirm important details and offer further assistance.

Let's get started. How can I help you today?

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to top