IMPACT OF THE

THE COMPANIES ACT 2016

ON WINDING UP

Norhaiza Jemon
Director
Regulatory Development & Services Division
Companies Commission of Malaysia
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 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP

REFORMS/RESTATEMENT IMPACT

1. Commencement of winding Shortening time taken to wind-

up will be from the date of up the company
court order (section

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 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP
REFORM/RESTATEMENT
2. Clarification on undue
preference transactions by:
(a) providing certainty on the
time-frame (6 months) to
enable the liquidator to set
aside the transaction as
undue preference.
(b) deleting cross referencing
to the Bankruptcy Act 1967
(section 528)
IMPACT
The law will provide
protection against
dissipation of assets during
the period leading to
winding up and streamlining
the relevant requirements
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 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP

REFORM/RESTATEMENT IMPACT
3. Enhancement of provisions relating Preserving the assets of the company
to liquidator’s rights to recover at the time leading to the winding up
certain sales to or by the company
by clarifying the claw-back
provision as follows:

(a) From directors and persons

connected with directors;
(b) The claw-back period:
• In case of a compulsory
winding up, 2 years from
the date of the petition;
• In the case of a voluntary
winding up, 2 years from
date of resolution 4
 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP
REFORM/RESTATEMENT
4. Enhancement of parameters
of exempt dispositions to
enable a company to carry-out
transactions in the ordinary
course of business during
liquidation (section 472 and
Twelfth Schedule)
IMPACT
Enhancement of parameters
where companies can carry
out certain transactions
without the need for
validation from Court.
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 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP

REFORM/RESTATEMENT IMPACT

5. Increasing the threshold of The amount is presumed

inability to pay debts to to be appropriate as it is
RM10,000 not too high as to
preclude small creditors
(section 466 through [P.U.(B) 58] and high enough to
remove likelihood of
trivial claims.

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 HIGHLIGHTS OF NEW PROVISIONS ON LIQUIDATION IN
THE COMPANIES ACT 2016

REFORM/RESTATEMENT IMPACT

6. Priorities (“preferential Increased social obligation of

debts”) a company for the welfare of
its employees
Quantum of wages and salaries
for employees is increased to
RM15,000.

(section 527)

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 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP

REFORM/RESTATEMENT IMPACT

7. Rights of secured creditors in The codification of the

respect of a charged asset. rights of secured creditors
provides a clear and
Secured creditors are allowed to comprehensive
deal with the assets through mechanisms for in dealing
realization or valuation of the with secured properties in
asset as provided under section the event of a liquidation.
524. Before the CA 2016, such
rights is protected under
the common law.

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 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP

REFORM/RESTATEMENT IMPACT
8. Right to terminate winding-up proceedings. Companies that are
viable may be re-
The Court is empowered to terminate a instated into the
winding up proceeding having taken into mainstream.
consideration, amongst others:
a) The satisfaction of debts;
b) Any agreement by liquidators, creditors,
contributories or other interested
parties.

The order may provide resumption and

control of the company to elect directors,
etc
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 IMPACT OF THE COMPANIES ACT 2016 ON WINDING UP

• Transitional provision under section 619(7) –

all winding up proceedings commencing
before the CA2016 will continue under the CA
1965.
• The Winding Up Rules (Amendment) 2017
– Work in progress to harmonise the provisions in
the CA 2016

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THANK YOU

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