FAQ

01. What is Insolvency and Winding-Up?

The process where an insolvent company's assets are disposed and realized to settle debts owing to creditors.

02. Under What Circumstances Can A Company Be Wound-Up By The Court?

Section 218 of the Company Act, 1965 sets out the circumstances in which a company may be wound-up by the Court

  1. The company has by special resolution resolved that it be wound up by the Court.
  2. Where the company is unable to pay its debts.
  3. Where the directors have acted in the affairs of the company in their own interests rather than in the interests of the members as a whole or which appears to be unfair to other members.
  4. The Court is of the opinion that it is just and equitable that the company be wound-up.
  5. The number of members is reduced to one (other than a wholly owned company).
  6. The company does not commence business within one year from its incorporation or suspends its business for a whole year.
  7. Where it is provided in the Memorandum and Articles that the period for the expiry of the company is fixed or the occurrence of the event that is fixed.
  8. The company is used for unlawful purposes or any purpose prejudicial to national security or public interest.

03. Who Can Be Appointed As A Liquidator In A Winding-up By The Court?

Only an approved liquidator [Private Liquidator – an individual person whom is licensed to be a liquidator] OR the Official Receiver [Director General of Insolvency(DGI) in capacity as Official Receiver] may be appointed as a liquidator in a Court winding up.

04. What Is The Primary Function Of A Liquidator?

  1. The primary function of a liquidator is to wind-up the company by collecting and realizing all the assets at the best possible price and in manner that is to be best advantage of the company,;
  2. investigate claims made by of creditors and third parties, settle all creditors’ claims and distributes the surplus assets (if any) to the shareholders in accordance with their respective entitlements;
  3. To investigate into the affairs and assets of the company;
  4. To investigate the conduct of its directors and other related party. It is the duty of the liquidator to ensure that at the end of the process, the company is dissolved completely.

    Once a winding up commences, directors of the company cease to have any power to manage the affairs of the company and all matters are taken over by the liquidator immediately upon the commencement of the winding up.

05. What Is Secured Creditors Or What Is Unsecured Creditors?

  1. Secured Creditors

    Lender who holds legally enforceable claim on a borrower’s assets(s) of a liquidation value equal to or greater than loan amount. Secured creditors are entitle to receive the proceeds of the foreclosure sale of the pledged asset(s) and, in case of bankruptcy, must be satisfied before the unsecured creditor(s).


  2. Unsecured Creditors

    Any person who has lodged the proof of debt with the liquidator.






Process Of Ownership Verification For Abandon Properties

01. Why The Verification Of Ownership Is Necessary?

The verification of ownership is necessary because:

  1. The Company had failed to keep a proper register of all the owners and the supporting documents;
  2. To keep and maintain an up-to-date, proper accurate register of all purchasers of the housing accommodation until separate title has been issue Section 22D (3) Housing Development (Control And Licensing), 1966;
  3. To ensure that there is no fraud perpetrated by any third party in relation to the unit property; and
  4. To identify unit property still belong to the Company.

02. What Is The Importance To Proof Of Purchase / Possession Of Unit Property?

To ensure that there is no fraud perpetrated by any third party in relation to the unit property and there is no record to prove

03. What Is The Effect Of Failure To Proof Of Purchase / Possession Of Unit Property?

The Liquidator would proceed with an application to court for directions and obtain a vesting order in relation to the said units and all cost incurred therein shall be borne by the defaulting party.

04. What Documents To Proof Of Purchase / Possession Of Unit Property?

  1. A Certified True Copies of Principal Sale & Purchase Agreement and Deed of Assignment (if any) and/or any other subsequent Sale & Purchase Agreements and other documentation between the First Purchaser and any other subsequent Purchaser;
  2. A Certified True Copies of Deed of Assignment (if any) to evident that unit assigned to you OR receipts issued to show that purchase price fully paid (if cash buyer);
  3. A Certified True Copies of Bank Loan Agreement cum Assignment, Bank Statement, (if loan was taken) and Deed of Receipt and Reassignment (if loan fully settled);
  4. A copy of current Assessment Receipts;
  5. A copies of the current receipt of maintenance service charges for the last three (3) months;
  6. A copy of Strata Title in which the Purchaser’s interest has been registered;
  7. A copy of NRIC of the purchaser(s); and
  8. Any other relevant documents may the Liquidator deem fit.

Application For Transfer Of Ownership

01. Why Is It Important To Do The Perfection Of Transfer?

Is to proof of ownership for the purpose of dealing. For example, transfer, charge, lease and small estate distribution.

Pursuant to Section 40A of the Strata Titles (Amendments) Act, 2007, the purchaser(s) should execute the transfer and charge documents within twelve months from being notified of the issuance of the strata titles by the original proprietor. If the purchaser fails to comply, they shall be guilty of an offence and be liable to a fine of not less than Ringgit Malaysia One Thousand (RM1,000) and not more than Ringgit Malaysia Ten Thousand (RM10,000) per parcel.

02. What The Owner / Buyer To Do After Receive A Notice?

Owner / Buyer to appoint Solicitor to submit a letter of instruction to the Liquidator for the perfection of transfer.

The Liquidator will sign the Form 14A and / or Consent to Transfer Form provided the owner / buyer to submit relevant documents together with the payment of administrative costs

03. Why Owner / Buyer Must Pay Costs Of Administrative To Perfection Of Transfer?

Pursuant to Sec. 287(1) of the Companies Act, 1965 , a Liquidator shall not be liable to incur any expense in relation to the winding up of a company unless there are sufficient available assets.