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(2) Notwithstanding subsection (1) the creditors may, if they
think fit, resolve that all or any of the persons so appointed by the
company ought not to be members of the committee of inspection
and, if the creditors so resolve, the persons mentioned in the
resolution shall not, unless the Court otherwise directs, be qualified
to act as members of the committee, and on any application to the
Court under this subsection the Court may, if it thinks fit, appoint
other persons to act as such members in place of the persons
mentioned in the resolution.
(3) Subject to this section and the rules the provisions of
Subdivision (3) of Division 2 relating to the proceedings of and
vacancies in committees of inspection shall apply with respect to
a committee of inspection appointed under this section.
Property and proceedings
263. (1) Any attachment, sequestration, distress or execution put
in force against the estate or effects of the company after the
commencement of a creditors' voluntary winding up shall be void.
(2) After the commencement of the winding up no action or
proceeding shall be proceeded with or commenced against the
company except by leave of the Court and subject to such terms
as the Court imposes.
Subdivision (4)--Provisions applicable to every
Voluntary Winding Up
Distribution of property of company
264.  Subject to the provisions of this Act as to preferential payments
the property of a company shall, on its winding up, be applied pari
passu in satisfaction of its liabilities, and subject to that application
shall, unless the articles otherwise provide, be distributed among
the members according to their rights and interests in the company.
Appointment of liquidator
265.  If from any cause there is no liquidator acting, the Court
may appoint a liquidator.
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Removal of liquidator
266.  The Court may, on cause shown, remove a liquidator and
appoint another liquidator.
Review of liquidator's remuneration
267. (1) Any member or creditor or the liquidator may, at any
time before the dissolution of the company, apply to the Court to
review the amount of the remuneration of the liquidator, and the
decision of the Court shall be final and conclusive.
(2) Notwithstanding subsection 232(3), in the case of a company
which is an insurer, no person, other than Bank Negara Malaysia,
may apply to the Court to review the remuneration of the liquidator
and the Court shall determine the remuneration of the liquidator
on the recommendation of Bank Negara Malaysia.
Act of liquidator valid, etc.
268. (1) The acts of a liquidator shall be valid notwithstanding
any defects that may afterwards be discovered in his appointment
or qualification.
(2) Any conveyance, assignment, transfer, mortgage, charge or
other disposition of a company's property made by a liquidator
shall, notwithstanding any defect or irregularity affecting the validity
of the winding up or the appointment of the liquidator, be valid
in favour of any person taking such property bona fide and for
value and without notice of such defect or irregularity.
(3) Every person making or permitting any disposition of property
to any liquidator shall be protected and indemnified in so doing
notwithstanding any defect or irregularity affecting the validity of
the winding up or the appointment of the liquidator not then known
to such person.
(4) For the purposes of this section a disposition of property
shall be taken as including a payment of money.
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Powers and duties of liquidator
269. (1) The liquidator may--
(a) in the case of a members' voluntary winding up, with the
approval of a special resolution of the company and, in
the case of a creditors' voluntary winding up, with the
approval of the Court or the committee of inspection,
exercise any of the powers given by paragraphs 236(1)
(b), (c), (d) and (e) to a liquidator in a winding up by the
Court;
(b) exercise any of the other powers by this Act given to the
liquidator in a winding up by the Court;
(c) exercise the power of the Court under this Act of settling
a list of contributories, and the list of contributories shall
be prima facie evidence of the liability of the persons
named therein to be contributories;
(d) exercise the power of the Court of making calls; or
(e) summon general meetings of the company for the purpose
of obtaining the sanction of the company by special
resolution in respect of any matter or for any other purpose
he thinks fit.
(2) The liquidator shall pay the debts of the company and adjust
the rights of the contributories among themselves.
(3) When several liquidators are appointed, any power given by
this Act may be exercised by such one or more of them as is
determined at the time of their appointment, or in default of such
determination by any number not less than two.
Power of liquidator to accept shares, etc., as consideration for
sale of property of company
270. (1) Where it is proposed that the whole or part of the business
or property of a company (in this section called the "company")
be transferred or sold to another corporation (in this section called
the "corporation"), the liquidator of the company, may, with the
sanction of a special resolution of the company conferring either
a general authority on the liquidator or an authority in respect of
any particular arrangement, receive in compensation or part
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compensation for the transfer or sale shares, debentures, policies
or other like interests in the corporation for distribution among the
members of the company, or may enter into any other arrangement
whereby the members of the company may, in lieu of receiving
cash, shares, debentures, policies or other like interests or in addition
thereto, participate in the profits of or receive any other benefit
from the corporation, and any such transfer sale or arrangement
shall be binding on the members of the company.
(2) If any member of the company expresses his dissent therefrom
in writing addressed to the liquidator and left at the registered
office of the liquidator within seven days after the passing of the
resolution, he may require the liquidator either to abstain from
carrying the resolution into effect or to purchase his interest at a
price to be determined by agreement or by arbitration in manner
provided by this section.
(3) If the liquidator elects to purchase the member's interest,
the purchase money shall be paid before the company is dissolved
and be raised by the liquidator in such manner as is determined
by special resolution.
(4) A special resolution shall not be invalid for the purposes of
this section by reason that it is passed before or concurrently with
a resolution for voluntary winding up or for appointing liquidators,
but if an order for winding up the company by the Court is made
within a year after the passing of the resolution the resolution shall
not be valid unless sanctioned by the Court.
(5) For the purposes of an arbitration under this section the
Arbitration Act 1952 [Act 93], shall apply as if there were a
submission for reference to two arbitrators, one to be appointed
by each party; and the appointment of an arbitrator may be made
under the hand of the liquidator, of if there is more than one
liquidator then under the hands of any two or more of the liquidators;
and the Court may give any directions necessary for the initiation
and conduct of the arbitration and any such directions shall be
binding on the parties.
(6) In the case of a creditors' voluntary winding up the powers
of the liquidator under this section shall not be exercised except
with the approval of the Court or the committee of inspection.
*NOTE--The Arbitration Act 1952 [Act 93] has been repealed by the Arbitration Act 2005 [Act
646] with effect from 01-03-2006.
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Annual meeting of members and creditors
271. (1) If the winding up continues for more than one year, the
liquidator shall summon a general meeting of the company in the
case of a members' voluntary winding up, and of the company and
the creditors in the case of a creditors' voluntary winding up, at
the end of the first year from the commencement of the winding
up and of each succeeding year or not more than three months
thereafter, and shall lay before the meeting an account of his acts
and dealings and of the conduct of the winding up during the
preceding year.
(2) The liquidator shall cause the notices of the meeting of
creditors to be sent by post to the creditors simultaneously with
the sending of the notices of the meeting of the company.
(3) Every liquidator who fails to comply with this section shall
be guilty of an offence against this Act.
Penalty: *Two thousand ringgit. Default penalty.
Final meeting and dissolution
272. (1) As soon as the affairs of the company are fully wound
up the liquidator shall make up an account showing how the winding
up has been conducted and the property of the company has been
disposed of, and thereupon shall call a general meeting of the
company, or in the case of a creditor's voluntary winding up a
meeting of the company and the creditors, for the purpose of
laying before it the account and giving any explanation thereof.
(2) The meeting shall be called by advertisement published in
a newspaper circulating generally throughout Malaysia, which
advertisement shall specify the time, place and object of the meeting
and shall be published one month at least before the meeting.
(3) The liquidator shall, within seven days after the meeting,
lodge with the Registrar and the Official Receiver a return of the
holding of the meeting and of its date with a copy of the account
attached to such return, and if the return or copy of the account
is not so lodged the liquidator shall be guilty of an offence against
this Act.
Penalty: One thousand ringgit. Default penalty.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
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(4) The quorum at a meeting of the company shall be two and
at a meeting of the company and the creditors shall be two members
and two creditors and if a quorum is not present at the meeting,
the liquidator shall in lieu of the return mentioned in subsection
(3) lodge a return (with account attached) that the meeting was
duly summoned and that no quorum was present thereat, and upon
such a return being lodged the provisions of subsection (3) as to
the lodging of the return shall be deemed to have been complied
with.
(5) On the expiration of three months after the lodging of the
return with the Registrar and with the Official Receiver the company
shall be dissolved.
(6) Notwithstanding subsection (5) the Court may, on the
application of the liquidator or of any other person who appears
to the Court to be interested, make an order deferring the date at
which the dissolution of the company is to take effect for such
time as the Court thinks fit.
(7) The person on whose application an order of the Court
under this section is made shall, within fourteen days after the
making of the order, lodge with the Registrar and with the Official
Receiver an office copy of the order, and if he fails so to do he
shall be guilty of an offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
(8) If the liquidator fails to call a meeting as required by this
section he shall be guilty of an offence against this Act.
Penalty: Two thousand ringgit. Default penalty.
Arrangement when binding on creditors
273. (1) Any arrangement entered into between a company about
to be or in the course of being wound up and its creditors shall,
subject to the right of appeal under this section, be binding on the
company if sanctioned by a special resolution, and on the creditors
if acceded to by three-fourths in value and one-half in number of
the creditors, every creditor for under fifty ringgit being reckoned
in value only.
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
NOTE--Previously "five hundred ringgit "see Companies (Amendment) Act 1986 [Act A657].
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(2) A creditor shall be accounted a creditor for value for such
sum as upon an account fairly stated, after allowing the value of
security or liens held by him and the amount of any debt or set-
off owing by him to the debtor, appears to be the balance due to
him.
(3) Any dispute with regard to the value of any such security
or lien or the amount of such debt or set-off may be settled by the
Court on the application of the company, the liquidator, or the
creditor.
(4) Any creditor or contributory may, within three weeks from
the completion of the arrangement, appeal to the Court against it,
and the Court may thereupon as it thinks just amend, vary or
confirm the arrangement.
Application to Court to have questions determined or powers
exercised
274. (1) The liquidator or any contributory or creditor may apply
to the Court--
(a) to determine any question arising in the winding up of
a company; or
(b) to exercise all or any of the powers which the Court
might exercise if the company were being wound up by
the Court.
(2) The Court, if satisfied that the determination of the question
or the exercise of power will be just and beneficial, may accede
wholly or partially to any such application on such terms and
conditions as it thinks fit or may make such other order on the
application as it thinks just.
Costs
275.  All proper costs, charges and expenses of and incidental to
the winding up including the remuneration of the liquidator shall
be payable out of the assets of the company in priority to all other
claims.
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Limitation on right to wind up voluntarily
276.  Where a petition has been presented to the Court to wind
up a company on the ground that it is unable to pay its debts the
company shall not without the leave of the Court resolve that it
be wound up voluntarily.
DIVISION 4
PROVISIONS APPLICABLE TO EVERY MODE OF
WINDING UP
Subdivision (1)--General
Books to be kept by liquidator
277. (1) Every liquidator shall keep proper books in which he
shall cause to be made entries or minutes of proceedings at meetings
and of such other matters as are prescribed, and any creditor or
contributory may, subject to the control of the Court, personally
or by his agent inspect them.
Control of Court over liquidators
(2) The Court shall take cognizance of the conduct of liquidators,
and if a liquidator does not faithfully perform his duties and observe
the prescribed requirements or the requirements of the Court or if
any complaint is made to the Court by any creditor or contributory
or by the Official Receiver in regard thereto, the Court shall inquire
into the matter and take such action as it thinks fit.
(3) The Registrar or the Official Receiver may report to the
Court any matter which in his opinion is a misfeasance, neglect
or omission on the part of the liquidator and the Court may order
the liquidator to make good any loss which the estate of the
company has sustained thereby and make such other order as it
thinks fit.
(4) The Court may at any time require any liquidator to answer
any inquiry in relation to the winding up and may examine him
or any other person on oath concerning the winding up and may
direct an investigation to be made of the books and vouchers of
the liquidator.
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Delivery of property to liquidator
(5) The Court may require any contributory, trustee, receiver,
banker, agent or officer of the company to pay, deliver, convey,
surrender or transfer to the liquidator or provisional liquidator
forthwith or within such time as the Court directs any money,
property, books and papers in his hands to which the company is
prima facie entitled.
Powers of Official Receiver where no committee of inspection
278. (1) Where a person other than the Official Receiver is the
liquidator and there is no committee of inspection the Official
Receiver may, on the application of the liquidator, do any act or
thing or give any direction or permission which is by this Act
authorized or required to be done or given by the Committee.
(2) Where the Official Receiver is the liquidator and there is no
committee of inspection the Official Receiver may in his discretion
do any act or thing which is by this Act required to be done by,
or subject to any direction or permission given by the Committee.
Appeal against decision of liquidator
279.  Any person aggrieved by any act or decision of the liquidator
may apply to the Court which may confirm, reverse or modify the
act or decision complained of and make such order as it thinks just.
Notice of appointment and address of liquidator or provisional
liquidator
280. (1) A liquidator or provisional liquidator shall, within fourteen
days after his appointment, lodge with the Registrar and with the
Official Receiver notice in the prescribed form of his appointment
and of the situation of his office and in the event of any change
in the situation of his office shall, within fourteen days after the
change, lodge with the Registrar and with the Official Receiver
notice in the prescribed form of the change.
(2) Service made by leaving any document at or sending it by
post addressed to the address of the office of the liquidator or
provisional liquidator given in any such notice lodged with the
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Registrar shall be deemed to be good service upon the liquidator
or provisional liquidator and upon the company.
(3) A liquidator or provisional liquidator shall, within fourteen
days after his resignation or removal from office, lodge with the
Registrar and with the Official Receiver notice thereof in the
prescribed form.
(4) If a liquidator or provisional liquidator fails to comply with
this section he shall be guilty of an offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
Liquidator's accounts
281. (1) Every liquidator shall, within one month after the expiration
of the period of six months from the date of his appointment and
of every subsequent period of six months and in any case within
one month after he ceases to act as liquidator and forthwith after
obtaining an order of release, lodge with the Registrar and the
Official Receiver, and in the case of a company which is an insurer,
whether or not its licence under the Insurance Act 1996 is revoked,
Bank Negara Malaysia, in the prescribed form and verified by
statutory declaration an account of his receipts and payments and
a statement of the position in the winding up.
Penalty: *One thousand ringgit. Default penalty.
(2) The Official Receiver may cause the account of any liquidation
to be audited by an approved company auditor, and for the purpose
of the audit the liquidator shall furnish the auditor with such
vouchers and information as he requires, and the auditor may at
any time require the production of and inspect any books or accounts
kept by the liquidator.
(3) A copy of the account or, if audited, a copy of the audited
account shall be kept by the liquidator and the copy shall be open
to the inspection of any creditor or of any person interested at the
office of the liquidator.
(4) The liquidator shall--
(a) give notice that the account has been made up to every
creditor and contributory when next forwarding any report,
notice of meeting, notice of call or dividend; and
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
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(b) in the notice inform creditors and contributories at what
address and between what hours the account may be
inspected.
(5) The costs of an audit under this section shall be fixed by
the Official Receiver and be part of the expenses of winding up.
Liquidator to make good defaults
282. (1) If any liquidator who has made any default in lodging
or making any application, return, account or other document, or
in giving any notice which he is by law required to lodge, make
or give, fails to make good the default within fourteen days after
the service on him of a notice requiring him to do so, the Court
may, on the application of any contributory or creditor of the
company or the Official Receiver, make an order directing the
liquidator to make good the default within such time as is specified
in the order.
(2) Any order made under subsection (1) may provide that all
costs of and incidental to the application shall be borne by the
liquidator.
(3) Nothing in subsection (1) shall prejudice the operation of
any written law imposing penalties on a liquidator in respect of
any such default.
Notification that a company is in liquidation
283. (1) Where a company is being wound up every invoice,
order for goods or business letter issued by or on behalf of the
company or a liquidator of the company or a receiver or manager
of the property of the company, being a document on or in which
the name of the company appears, shall have the words "in
liquidation" added after the name of the company where it first
appears therein.
(2) If default is made in complying with this section the company,
and every officer of the company or liquidator and every receiver
or manager who knowingly and wilfully authorizes or permits the
default shall be guilty of an offence against this Act.
Penalty: *Five hundred ringgit.
*NOTE--Previously "one hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
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Books of company
284. (1) Where a company is being wound up all books and
papers of the company and of the liquidator that are relevant to
the affairs of the company at or subsequent to the commencement
of the winding up of the company shall, as between the contributories
of the company, be prima facie evidence of the truth of all matters
purporting to be therein recorded.
(2) When a company has been wound up the liquidator shall
retain the books and papers referred to in subsection (1) for a
period of five years from the date of dissolution of the company
and at the expiration of that period may destroy them.
Penalty: *Two thousand ringgit.
(3) Notwithstanding subsection (2), when a company has been
wound up the books and papers referred to in subsection (1) may
be destroyed within a period of five years after the dissolution of
the company--
(a) in the case of a winding up by the Court, in accordance
with the directions of the Court;
(b) in the case of a members' voluntary winding up, as the
company by resolution directs; and
(c) in the case of a creditors' voluntary winding up, as the
committee of inspection, or, if there is no such committee,
as the creditors of the company direct.
(4) No responsibility shall rest on the company or the liquidator
by reason of any such book or paper not being forthcoming to any
person claiming to be interested therein if the book or paper has
been destroyed in accordance with this section.
Investment of surplus funds on general account
285. (1) Whenever the cash balance standing to the credit of any
company in liquidation is in excess of the amount which, in the
opinion of the committee of inspection, or, if there is no committee
of inspection, of the liquidator, is required for the time being to
answer demands in respect of the estate of the company, the liquidator,
if so directed in writing by the committee of inspection, or, if there
is no committee of inspection, the liquidator himself, may, unless
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
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the Court on application by any creditor thinks fit to direct otherwise
and so orders, invest the sum or any part thereof in securities
issued by the Government of Malaysia or of any State of Malaysia
or place it on deposit at interest with any bank, and any interest
received in respect thereof shall form part of the assets of the
company.
(2) Whenever any part of the money so invested is, in the
opinion of the committee of inspection, or, if there is no committee
of inspection, of the liquidator, required to answer any demands
in respect of the company's estate, the committee of inspection
may direct, or, if there is no committee of inspection, the liquidator
may arrange for the sale or realization of such part of the said
securities as is necessary.
Unclaimed assets to be paid to receiver of revenue
286. (1) Where a liquidator has in his hands or under his control--
(a) any unclaimed dividend or other moneys which have
remained unclaimed for more than six months from the
date when the dividend or other moneys became payable;
or
(b) a f t e r making final distribution, any unclaimed or
undistributed moneys arising from the property of the
company,
he shall forthwith pay those moneys to the Official Receiver to be
placed to the credit of the Companies Liquidation Account and
shall be entitled to the prescribed certificate of receipt for the
moneys so paid and that certificate shall be an effectual discharge
to him in respect thereof.
(2) The Court may, at any time on the application of the Official
Receiver, order any liquidator to submit to it an account of any
unclaimed or undistributed funds, dividends or other moneys in
his hands or under his control verified by affidavit and may direct
an audit thereof and may direct him to pay those moneys to the
Official Receiver to be placed to the credit of the Companies
Liquidation Account.
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(3) The interest arising from the investment of the moneys
standing to the credit of the Companies Liquidation Account shall
be paid into the Consolidated Fund.
(4) For the purposes of this section the Court may exercise all
the powers conferred by this Act with respect to the discovery and
realization of the property of the company and the provisions of
this Act with respect thereto shall, with such adaptations as are
prescribed, apply to proceedings under this section.
(5) This section shall not, except as expressly declared in this
Act, deprive any person of any other right or remedy to which he
is entitled against the liquidator or any other person.
(6) If any claimant makes any demand for any money placed
to the credit of the Companies Liquidation Account, the Official
Receiver upon being satisfied that the claimant is the owner of the
money shall authorize payment thereof to be made to him out of
the Account or, if it has been paid into the Consolidated Fund, may
authorize payment of a like amount to be made to him out of
moneys made available by Parliament for the purpose.
(7) Any person dissatisfied with the decision of the Official
Receiver in respect of a claim made in pursuance of subsection (6)
may appeal to the Court which may confirm, disallow or vary the
decision.
(8) Where any unclaimed moneys paid to any claimant are
afterwards claimed by any other person, that other person shall not
be entitled to any payment out of the Account of the Fund, but may
have recourse against the claimant to whom the unclaimed moneys
have been paid.
(9) Any unclaimed moneys paid to the credit of the Companies
Liquidation Account to the extent to which the said moneys have
not been under this section paid out of the Account shall, on the
lapse of six years from the date of the payment of the moneys to
the credit of the Account, be paid into the Consolidated Fund.
Expenses of winding up where assets insufficient
287. (1) Unless expressly directed to do so by the Official Receiver,
a liquidator shall not be liable to incur any expense in relation to
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the winding up of a company unless there are sufficient available
assets.
(2) The Official Receiver may, on the application of a creditor
or a contributory, direct a liquidator to incur a particular expense
on condition that the creditor or contributory indemnifies the liquidator
in respect of the recovery of the amount expended and if the
Official Receiver so directs gives such security to secure the amount
of the indemnity as the Official Receiver thinks reasonable.
Resolutions passed at adjourned meetings of creditors and
contributories
288.  Subject to subsection 260(9) where a resolution is passed
at an adjourned meeting of any creditors or contributories of a
company, the resolution shall for all purposes be treated as having
been passed on the date on which it was in fact passed and not
on any earlier date.
Meetings to ascertain wishes of creditors or contributories
289. (1) The Court may, as to all matters relating to the winding
up of a company, have regard to the wishes of the creditors or
contributories as proved to it by any sufficient evidence, and may,
if it thinks fit for the purpose of ascertaining those wishes, direct
meetings of the creditors or contributories to be called, held and
conducted in such manner as the Court directs, and may appoint
a person to act as chairman of any such meeting and to report the
result thereof to the Court.
(2) In the case of creditors regard shall be had to the value of
each creditor's debt.
(3) In the case of contributories regard shall be had to the
number of votes conferred on each contributory by this Act or the
articles.
Special commission for receiving evidence
290. (1) The Sessions Court Judges shall be commissioners for
the purpose of taking evidence under this Part, and the Court may
refer the whole or any part of the examination of any witnesses
under this Part to any person hereby appointed commissioner.
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(2) Every commissioner shall, in addition to any powers which
he might lawfully exercise as a Sessions Court Judge, have in the
matter so referred to him the same powers as the Court of summoning
and examining witnesses, of requiring the production or delivery
of documents, of punishing defaults by witnesses and of allowing
costs and expenses to witnesses.
(3) Unless otherwise ordered by the Court the taking of evidence
by commissioners shall be in open court and shall be open to the
public.
(4) The examination so taken shall be returned or reported to
the Court in such manner as the Court directs.
Subdivision (2)--Proof and Ranking of Claims
Proof of debts
291. (1) In every winding up, subject in the case of insolvent
companies to the application in accordance with this Act of the
law relating to bankruptcy, all debts payable on a contingency and
all claims against the company present or future, certain or contingent,
ascertained or sounding only in damages shall be admissible to
proof against the company, a just estimate being made so far as
possible of the value of such debts or claims as are subject to any
contingency or sound only in damages or for some other reason
do not bear a certain value.
(2) Subject to section 292, in the winding up of an insolvent
company the same rules shall prevail and be observed with regard
to the respective rights of secured and unsecured creditors and
debts provable and the valuation of annuities and future and contingent
liabilities as are in force for the time being under the law relating
to bankruptcy in relation to the estates of bankrupt persons, and
all persons who in any such case would be entitled to prove for
and receive dividends out of the assets of the company may come
in under the winding up and make such claims against the company
as they respectively are entitled to by virtue of this section.
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Priorities
292. (1) Subject to this Act, in a winding up there shall be paid
in priority to all other unsecured debts--
(a) firstly, the costs and expenses of the winding up including
the taxed costs of a petitioner payable under section 220,
the remuneration of the liquidator and the costs of any
audit carried out pursuant to section 281;
(b) secondly, all wages or salary (whether or not earned
wholly or in part by way of commission) including any
amount payable by way of allowance or reimbursement
under any contract of employment or award or agreement
regulating conditions of employment, of any employee
not exceeding one thousand five hundred ringgit or such
other amount as may be prescribed from time to time
whether for time or piecework in respect of services
rendered by him to the company within a period of four
months before the commencement of the winding up;
(c) thirdly, all amounts due in respect of worker's compensation
under any written law relating to worker's compensation
accrued before the commencement of the winding up;
(d) fourthly, all remuneration payable to any employee in
respect of vacation leave, or in the case of his death to
any other person in his right, accrued in respect of any
period before the commencement of the winding up;
(e) fifthly, all amounts due in respect of contributions payable
during the twelve months next before the commencement
of the winding up by the company as the employer of any
person under any written law relating to employees
superannuation or provident funds or under any scheme
of superannuation or retirement benefit which is an
approved scheme under the federal law relating to income
tax; and
(f) sixthly, the amount of all federal tax assessed under any
written law before the date of the commencement of the
winding up or assessed at any time before the time fixed
for the proving of debts has expired.
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(2) The debts in each class specified in subsection (1) shall rank
in the order therein specified but as between debts of the same
class shall rank equally between themselves, and shall be paid in
full, unless the property of the company is insufficient to meet
them, in which case they shall abate in equal proportions between
themselves.
(3) Where any payment has been made to any employee of the
company on account of wages, salary or vacation leave out of
money advanced by a person for that purpose, the person by whom
the money was advanced shall, in a winding up, have a right of
priority in respect of the money so advanced and paid, up to the
amount by which the sum in respect of which the employee would
have been entitled to priority in the winding up has been diminished
by reason of the payment, and shall have the same right of priority
in respect of that amount as the employee would have had if the
payment had not been made.
(4) So far as the assets of the company available for payment
of general creditors are insufficient to meet any preferential debts
specified in paragraphs (1)(b), (d) and (e) and any amount payable
in priority by virtue of subsection (3), those debts shall have
priority over the claims of the holders of debentures under any
floating charge created by the company, and shall be paid accordingly
out of any property comprised in or subject to that charge.
(5) Where the company is under a contract of insurance (entered
into before the commencement of the winding up) insured against
liability to third parties, then if any such liability is incurred by
the company (either before or after the commencement of the
winding up) and an amount in respect of that liability is or has
been received by the company or the liquidator from the insurer,
the amount shall, after deducting any expenses of or incidental to
getting in the amount, be paid by the liquidator to the third party
in respect of whom the liability was incurred to the extent necessary
to discharge that liability or any part of that liability remaining
undischarged in priority to all payments in respect of the debts
referred to in subsection (1).
(6) If the liability of the insurer to the company is less than the
liability of the company to the third party nothing in subsection
(5) shall limit the rights of the third party in respect of the balance.
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(7) Subsections (5) and (6) shall have effect notwithstanding
any agreement to the contrary entered into after the commencement
of this Act.
(8) Notwithstanding anything in subsection (1)--
(a) paragraph (c) of that subsection shall not apply in relation
to the winding up of a company in any case where the
company is being wound up voluntarily merely for the
purpose of reconstruction or of amalgamation with another
company and the right to the compensation has on the
reconstruction or amalgamation been preserved to the
person entitled thereto, or where the company has entered
into a contract with an insurer in respect of any liability
under any law relating to workers compensation; and
(b) where a company has given security for the payment or
repayment of any amount to which paragraph (f) of that
subsection relates, that paragraph shall apply only in
relation to the balance of any such amount remaining due
after deducting therefrom the net amount realized from
such security.
(9) Where in any winding up assets have been recovered under
an indemnity for costs of litigation given by certain creditors, or
have been protected or preserved by the payment of moneys or the
giving of indemnity by creditors, or where expenses in relation to
which a creditor has indemnified a liquidator, have been recovered
the Court may make such order as it deems just with respect to
the distribution of those assets and the amount of those expenses
so recovered with a view to giving those creditors an advantage
over others in consideration of the risk run by them in so doing.
Subdivision (3)--Effect on other Transactions
Undue preference
293. (1) Any transfer, mortgage, delivery of goods, payment,
execution or other act relating to property made or done by or
against a company which, had it been made or done by or against
an individual, would in his bankruptcy under the law of bankruptcy
be void or voidable shall, in the event of the company being wound
up, be void or voidable in like manner.
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(2) For the purposes of this section the date which corresponds
with the date of presentation of the bankruptcy petition in the case
of an individual shall be--
(a) in the case of a winding up by the Court--
(i) the date of the presentation of the petition; or
(ii) where before the presentation of the petition a
resolution has been passed by the company for
voluntary winding up the date upon which the
resolution to wind up the company voluntarily, is
passed,
whichever is the earlier; and
(b) in the case of a voluntary winding up the date upon
which the winding up is deemed by this Act to have
commenced.
(3) Any transfer or assignment by a company of all its property
to trustees for the benefit of all its creditors shall be void.
Effect of floating charge
294.  A floating charge on the undertaking or property of the
company created within six months of the commencement of the
winding up shall, unless it is proved that the company immediately
after the creation of the charge was solvent, be invalid except to
the amount of any cash paid to the company at the time of or
subsequently to the creation of and in consideration for the charge
together with interest on that amount at the rate of five per centum
per annum.
Liquidator's right to recover in respect of certain sales to or
by company
295. (1) Where any property, business or undertaking has been
acquired by a company for a cash consideration within a period
of two years before the commencement of the winding up of the
company--
(a) from a person who was at the time of the acquisition a
director of the company; or
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(b) from a company of which, at the time of the acquisition,
a person was a director who was also a director of the
first-mentioned company,
the liquidator may recover from the person or company from
which the property, business or undertaking was acquired any
amount by which the cash consideration for the acquisition exceeded
the value of the property, business or undertaking at the time of
its acquisition.
(2) Where any property, business or undertaking has been sold
by a company for a cash consideration within a period of two years
before the commencement of the winding up of the company--
(a) to a person who was at the time of the sale a director of
the company; or
(b) to a company of which at the time of the sale a person
was a director who was also a director of the company
first mentioned in this subsection,
the liquidator may recover from the person or company to which
the property, business or undertaking was sold any amount by
which the value of the property, business or undertaking at the
time of the sale exceeded the cash consideration.
(3) For the purposes of this section the value of the property
business or undertaking includes the value of any goodwill or
profits which might have been made from the business or undertaking
or similar considerations.
(4) In this section "cash consideration" in relation to an acquisition
or sale by a company, means consideration for the acquisition or
sale payable otherwise than by the issue of shares in the company.
Disclaimer of onerous property
296. (1) Where any part of the property of a company consists
of--
(a) any estate or interest in land which is burdened with
onerous covenants;
(b) shares in corporations;
(c) unprofitable contracts; or
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(d) any other property that is unsaleable, or not readily saleable,
by reason of its binding the possessor thereof to the
performance of any onerous act, or to the payment of any
sum of money,
t h e liquidator of the company, notwithstanding that he has
endeavoured to sell or has taken possession of the property or
exercised any act of ownership in relation thereto, may, with the
leave of the Court or the committee of inspection and subject to
this section, by writing signed by him, at any time within twelve
months after the commencement of the winding up or such extended
period as is allowed by the Court, disclaim the property; but where
any such property has not come to the knowledge of the liquidator
within one month after the commencement of the winding up, the
power of disclaiming may be exercised at any time within twelve
months after he has become aware thereof or such extended period
as is allowed by the Court.
(2) The disclaimer shall operate to determine, as from the date
of disclaimer, the rights, interest and liabilities of the company and
the property of the company in or in respect of the property disclaimed,
but shall not, except so far as is necessary for the purpose of
releasing the company and the property of the company from
liability, affect the rights or liabilities of any other person.
(3) The Court or committee before or on granting leave to
disclaim may require such notices to be given to persons interested,
and impose such terms as a condition of granting leave, and make
such other order in the matter as the Court or committee thinks
just.
(4) The liquidator shall not be entitled to disclaim if an application
in writing has been made to him by any person interested in the
property requiring him to decide whether he will or will not disclaim,
and the liquidator has not, within a period of twenty-eight days
after the receipt of the application or such further period as is
allowed by the Court or the committee, given notice to the applicant
that he intends to apply to the Court or the committee for leave
to disclaim, and, in the case of a contract, if the liquidator after
such an application in writing does not within that period or further
period disclaim the contract the liquidator shall be deemed to have
adopted it.
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(5) The Court may, on the application of a person who is, as
against the liquidator, entitled to the benefit or subject to the
burden of a contract made with the company, make an order rescinding
the contract on such terms as to payment by or to either party of
damages for the non-performance of the contract, or otherwise as
the Court thinks just, and any damages payable under the order
to that person may be proved by him as a debt in the winding up.
(6) The Court may, on the application of a person who either
claims any interest in any disclaimed property or is under any
liability not discharged by this Act in respect of any disclaimed
property and on hearing such persons as it thinks fit, make an order
for the vesting of the property in or the delivery of the property
to any person entitled thereto, or to whom it seems just that the
property should be delivered by way of compensation for such
liability as aforesaid, or a trustee for him, and on such terms as
the Court thinks just, and on any such vesting order being made
and an office copy thereof being lodged with the Registrar and
with the Official Receiver and if the order relates to land with the
appropriate authority concerned with the recording or registration
of dealings in that land (as the case requires) the property comprised
therein shall vest accordingly in the person therein named in that
behalf without any further conveyance, transfer or assignment.
(7) Notwithstanding anything in subsection (6), where the property
disclaimed is of a leasehold nature the Court shall not make a
vesting order in favour of any person claiming under the company,
whether as under-lessee or as mortgagee, except upon the terms
of making that person--
(a) subject to the same liabilities and obligations as those to
which the company was subject under the lease in respect
of the property at the commencement of the winding up;
or
(b) if the Court thinks fit, subject only to the same liabilities
and obligations as if the lease had been assigned to that
person at that date,
and in either event, if the case so requires, as if the lease had
comprised only the property comprised in the vesting order, and
any mortgagee or under-lessee declining to accept a vesting order
upon those terms shall be excluded from all interest in and security
upon the property, and, if there is no person claiming under the
company who is willing to accept an order upon those terms, the
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Court may vest the estate and interest of the company in the
property in any person liable personally or in a representative
character and either alone or jointly with the company to perform
the lessee's covenants in the lease, freed and discharged from all
estates, incumbrances and interest created therein by the company.
(8) Any person injured by the operation of a disclaimer under
this section shall be deemed to be a creditor of the company to
the amount of the injury, and may accordingly prove the amount
as a debt in the winding up.
Interpretation
For the purposes of sections 298 and 299--
297.
"bailiff'" includes any officer charged with the execution of a
writ or other process;
"goods" includes all movable property.
Restriction of rights of creditor as to execution or attachment
298. (1) Where a creditor has issued execution against the goods
or land of a company or has attached any debt due to the company
and the company is subsequently wound up, he shall not be entitled
to retain the benefit of the execution or attachment against the
liquidator unless he has completed the execution or attachment
before the date of the commencement of the winding up, but--
(a) where any creditor has had notice of a meeting having
been called at which a resolution for voluntary winding
up is to be proposed, the date on which the creditor so
had notice shall for the purposes of this section be
substituted for the date of the commencement of the
winding up;
(b) a person who purchases in good faith under a sale by the
bailiff any goods of a company on which an execution
has been levied shall in all cases acquire a good title to
them against the liquidator; and
(c) the rights conferred by this subsection on the liquidator
may be set aside by the Court in favour of the creditor
to such extent and subject to such terms as the Court
thinks fit.
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(2) For the purposes of this section--
(a) an execution against goods is completed by seizure and
sale;
(b) an attachment of a debt is completed by receipt of the
debt; and
(c) an execution against land is completed by sale or, in the
case of an equitable interest, by the appointment of a
receiver.
Duties of bailiff as to goods taken in execution
299. (1) Subject to subsection (3) where any goods of a company
are taken in execution and, before the sale thereof or the completion
of the execution by the receipt or recovery of the full amount of
the levy, notice is served on the bailiff that a provisional liquidator
has been appointed or that a winding up order has been made or
that a resolution for voluntary winding up has been passed, the
bailiff shall, on being so required, deliver the goods and any
money seized or received in part satisfaction of the execution to
the liquidator, but the costs of the execution shall be a first charge
on the goods or moneys so delivered, and the liquidator may sell
the goods, or a sufficient part thereof, for the purpose of satisfying
that charge.
(2) Subject to subsection (3) where under an execution in respect
of a judgement for a sum exceeding one hundred ringgit the goods
of a company are sold or money is paid in order to avoid sale, the
bailiff shall deduct the costs of the execution from the proceeds
of the sale or the money paid and retain the balance for fourteen
days; and if within that time notice is served on him of a petition
for the winding up of the company having been presented or of
a meeting having been called at which there is to be proposed a
resolution for the voluntary winding up and an order is made or
a resolution is passed for the winding up, the bailiff shall pay the
balance to the liquidator who shall be entitled to retain it as against
the execution creditor.
(3) The rights conferred by this section on the liquidator may
be set aside by the Court in favour of the creditor to such extent
and subject to such terms as the Court thinks fit.
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Subdivision (4)--Offences
Offences by officers of companies in liquidation
300. (1) Every person who, being a past or present officer or a
contributory of a company which is being wound up--
(a) does not to the best of his knowledge and belief fully and
truly discover to the liquidator all the property movable
and immovable of the company, and how and to whom
and for what consideration and when the company disposed
of any part thereof, except such part as has been disposed
of in the ordinary way of the business of the company;
(b) does not deliver up to the liquidator, or as he directs--
(i) all the movable and immovable property of the
company in his custody or under his control and
which he is required by law to deliver up; or
(ii) all books and papers in his custody or under his
control belonging to the company and which he
is required by law to deliver up;
(c) within twelve months next before the commencement of
the winding up or at any time thereafter--
(i) has concealed any part of the property of the
company to the value of fifty ringgit or upwards,
or has concealed any debt due to or from the
company;
(ii) has fraudulently removed any part of the property
of the company to the value of fifty ringgit or
upwards;
(iii) has concealed, destroyed, mutilated or falsified,
or has been privy to the concealment, destruction,
mutilation or falsification of, any book or paper
affecting or relating to the property or affairs of
the company;
(iv) has made or has been privy to the making of any
false entry in any book or paper affecting or relating
to the property or affairs of the company;
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(v) has fraudulently parted with, altered or made any
omission in, or has been privy to fraudulent parting
with, altering or making any omission in, any
document affecting or relating to the property or
affairs of the company;
(vi) by any false representation or other fraud, has
obtained any property for or on behalf of the
company on credit which the company has not
subsequently paid for;
(vii) has obtained on credit, for or on behalf of the
company, under the false pretence that the company
is carrying on its business, any property which the
company has not subsequently paid for; or
(viii) has pawned, pledged or disposed of any property
of the company which has been obtained on credit
and has not been paid for, unless the pawning,
pledging or disposing was in the ordinary way of
the business of the company;
(d) makes any material omission in any statement relating to
the affairs of the company;
(e) knowing or believing that a false debt has been proved
by any person fails for a period of one month to inform
the liquidator thereof;
(f) prevents the production of any book or paper affecting
or relating to the property or affairs of the company;
(g) within twelve months next before the commencement of
the winding up or at any time thereafter has attempted
to account for any part of the property of the company
by fictitious losses or expenses; or
(h) within twelve months next before the commencement of
the winding up or at any time thereafter has been guilty
of any false representation or other fraud for the purpose
of obtaining the consent of the creditors of the company
or any of them to an agreement with reference to the
affairs of the company or to the winding up,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for two years or five thousand ringgit.
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(2) It shall be a good defence to a charge under paragraph (1)(a),
(b) or subparagraph (c)(i), (vii) or (viii) or paragraph (d) if the
accused proves that he had no intent to defraud, and to a charge
under subparagraph (1)(c)(iii) or (iv) or paragraph (f) if he proves
that he had no intent to conceal the state of affairs of the company
or to defeat the law.
(3) Where any person pawns, pledges or disposes of any property
in circumstances which amount to an offence under subparagraph
(1)(c)(viii) every person who takes in pawns or pledge or otherwise
receives the property knowing it to be pawned, pledged or disposed
of in those circumstances shall be guilty of an offence against this
Act.
Penalty: Imprisonment for *five years or thirty thousand ringgit.
Inducement to be appointed liquidator
301.  Any person who gives or agrees or offers to give to any
member or creditor of a company any valuable consideration with
a view of securing his own appointment or nomination, or to
securing or preventing the appointment or nomination of some
person other than himself, as the company's liquidator shall be
guilty of an offence against this Act.
Penalty: Imprisonment for one year or one thousand ringgit.
Penalty for falsification of books
302.  Every officer or contributory of any company being wound
up who destroys, mutilates, alters or falsifies any books, papers
or securities, or makes or is privy to the making of any false or
fraudulent entry in any register or book of account or document
belonging to the company with intent to defraud or deceive any
person shall be guilty of an offence against this Act.
Penalty: Imprisonment for ††five years or thirty thousand ringgit.
*NOTE--Previously "two years or five thousand ringgit"see Companies (Amendment) Act 1986
[Act A657].
NOTE--Previously "six months or five hundred ringgit"see Companies (Amendment) Act 1986
[Act A657].
††
NOTE--Previously "two years or five thousand ringgit"see Companies (Amendment) Act 1986
[Act A657].
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Liability where proper accounts not kept
303. (1) If, on an investigation under any other Part or where a
company is wound up, it is shown that proper books of account
were not kept by the company throughout the period of two years
immediately preceding the commencement of the investigation or
winding up or the period between the incorporation of the company
and the commencement of the investigation or winding up (whichever
is the lesser) every officer who is in default shall, unless he acted
honestly and shows that in the circumstances in which the business
of the company was carried on the default was excusable, be guilty
of an offence against this Act.
Penalty: Imprisonment for *three years or ten thousand ringgit.
(2) For the purposes of this section, proper books of account
shall be deemed not to have been kept in the case of any company
if there have not been kept such books or accounts as are necessary
to exhibit and explain the transactions and financial position of the
trade or business of the company, including books containing
entries from day to day in sufficient detail of all cash received and
cash paid, and, where the trade or business has involved dealings
in goods, statements of the annual stock takings and (except in the
case of goods sold by way of ordinary retail trade) of all goods
sold and purchased, showing the goods and the buyers and sellers
thereof in sufficient detail to enable those goods and those buyers
and sellers to be identified or if the books or accounts have not
been kept in such manner as to enable them to be conveniently and
properly audited, whether or not the company has appointed an
auditor.
(3) If in the course of the winding up of a company or in any
proceedings against a company it appears that an officer of the
company who was knowingly a party to the contracting of a debt
had, at the time the debt was contracted, no reasonable or probable
ground of expectation, after taking into consideration the other
liabilities, if any, of the company at the time, of the company
being able to pay the debt, the officer shall be guilty of an offence
against this Act.
Penalty: Imprisonment for one year or five thousand ringgit.
*NOTE--Previously "one year or two thousand five hundred ringgit"see Companies (Amendment)
Act 1986 [Act A657].
NOTE--Previously "three months or five hundred ringgit"see Companies (Amendment) Act 1986
[Act A657].
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Responsibility for fraudulent trading
304. (1) If in the course of the winding up of a company or in
any proceedings against a company it appears that any business
of the company has been carried on with intent to defraud creditors
of the company or creditors of any other person or for any fraudulent
purpose, the Court on the application of the liquidator or any
creditor or contributory of the company, may, if it thinks proper
so to do declare that any person who was knowingly a party to the
carrying on of the business in that manner shall be personally
responsible, without any limitation of liability, for all or any of
the debts or other liabilities of the company as the Court directs.
(2) Where a person has been convicted of an offence under
subsection 303(3) in relation to the contracting of such a debt as
is referred to in that section the Court, on the application of the
liquidator or any creditor or contributory of the company, may, if
it thinks proper so to do, declare that the person shall be personally
responsible without any limitation of liability for the payment of
the whole or any part of that debt.
(3) When the Court makes any declaration pursuant to subsection
(1) or (2), it may give such further directions as it thinks proper
for the purpose of giving effect to that declaration, and in particular
may make provision for making the liability of any person under
the declaration a charge on any debt or obligation due from the
company to him, or on any charge or any interest in any charge
on any assets of the company held by or vested in him or any
corporation or person on his behalf, or any person claiming as
assignee from or through the person liable or any corporation or
person acting on his behalf, and may from time to time make such
further order as is necessary for the purpose of enforcing any
charge imposed under this subsection.
(4) For the purpose of subsection (3) "assignee" includes any
person to whom or in whose favour by the directions of the person
liable the debt, obligation, or charge was created, issued or transferred
or the interest created, but does not include an assignee for valuable
consideration, not including consideration by way of marriage,
given in good faith and without notice of any of the matters on
the ground of which the declaration is made.
(5) Where any business of a company is carried on with the
intent or for the purpose mentioned in subsection (1) every person
who was knowingly a party to the carrying on the business with
that intent or purpose shall be guilty of an offence against this Act.
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Penalty: Imprisonment for *three years or ten thousand ringgit.
(6) This section shall have effect notwithstanding that the person
concerned is criminally liable apart from this section in respect of
the matters on the ground of which the declaration is made.
(7) On the hearing of an application under subsection (1) or (2)
the liquidator may himself give evidence or call witnesses.
Power of Court to assess damages against delinquent officers,
etc.
305. (1) If in the course of winding up it appears that any person
who has taken part in the formation or promotion of the company
or any past or present liquidator or officer has misapplied or
retained or become liable or accountable for any money or property
of the company or been guilty of any misfeasance or breach of
trust or duty in relation to the company, the Court may on the
application of the liquidator or of any creditor or contributory
examine into the conduct of that person, liquidator or officer and
compel him to repay or restore the money or property or any part
thereof with interest at such rate as the Court thinks just, or to
contribute such sum to the assets of the company by way of
compensation in respect of the misapplication, retainer, misfeasance
or breach of trust or duty as the Court thinks just.
(2) This section shall extend and apply to and in respect of the
receipt of any money or property by any officer of the company
during the two years preceding the commencement of the winding
up whether by way of salary or otherwise appearing to the Court
to be unfair or unjust to other members of the company.
(3) This section shall have effect notwithstanding that the offence
is one for which the offender is criminally liable.
Prosecution of delinquent officers and members of company
306. (1) If it appears to the Court, in the course of a winding up
by the Court, that any past or present officer, or any member, of
the company has been guilty of an offence in relation to the
company for which he is criminally liable, the Court may, either
on the application of any person interested in the winding up or
of its own motion, direct the liquidator either himself to prosecute
the offender or to refer the matter to the Minister.
*NOTE--Previously "one year or two thousand five hundred ringgit"see Companies (Amendment)
Act 1986 [Act A657].
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(2) If it appears to the liquidator, in the course of a voluntary
winding up, that any past or present officer, or any member, of
the company has been guilty of any offence in relation to the
company for which he is criminally liable, he shall forthwith
report the matter to the Minister and shall, in respect of information
or documents in his possession or under his control which relate
to the matter in question, furnish the Minister with such information
and give to him such access to and facilities for inspecting and
taking copies of any documents as he may require.
(3) If it appears to the liquidator, in the course of any winding
up that the company which is being wound up will be unable to
pay its unsecured creditors more than fifty sen in the ringgit, the
liquidator shall forthwith report the matter in writing to the Official
Receiver and shall furnish the Official Receiver with such information
and give to him such access to and facilities for inspecting and
taking copies of any documents as the Official Receiver may
require.
(4) Where any report is made under subsection (2) or (3) the
Minister may, if he thinks fit, investigate the matter and may, if
he thinks expedient, apply to the Court for an order conferring on
him or any person designated by him for the purpose with respect
to the company concerned all such powers of investigating the
affairs of the company as are provided by this Act in the case of
a winding up by the Court, but if it appears to him that the case
is not one in which proceedings ought to be taken by him, he shall
inform the liquidator accordingly, and thereupon, subject to the
previous approval of the Court, the liquidator may himself take
proceedings against the offender.
(5) If it appears to the Court in the course of a voluntary winding
up that any past or present officer, or any member, of the company
has been guilty as aforesaid and that no report with respect to the
matter has been made by the liquidator to the Minister, the Court
may, on the application of any person interested in the winding
up or of its own motion, direct the liquidator to make such a report,
and on a report being made accordingly, this section shall have
effect as though the report has been made in pursuance of subsection
(2).
(6) If, where any matter is reported or referred to the Minister
or Official Receiver under this section, he considers that the case
is one in which a prosecution ought to be instituted, he may
institute proceedings accordingly, and the liquidator and every
officer and agent of the company past and present, other than the
defendant in the proceedings, shall give the Minister or Official
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Receiver all assistance in connection with the prosecution which
he is reasonably able to give.
(7) For the purpose of subsection (6) "agent" in relation to a
company includes any banker or advocate of the company and any
person employed by the company as auditor, whether or not an
officer of the company.
(8) If any person fails or neglects to give assistance in manner
required by subsection (6) the Court may, on the application of the
Minister or Official Receiver, direct that person to comply with
the requirements of that subsection, and where any application is
made under this subsection with respect to a liquidator, the Court
may, unless it appears that the failure or neglect to comply was
due to the liquidator not having in his hands sufficient assets of
the company to enable him so to do, direct that the costs of the
application shall be borne by the liquidator personally.
(9) The Minister may direct that the whole or any part of any
costs and expenses properly incurred by the liquidator in proceedings
brought under this section shall be defrayed out of moneys provided
by Parliament.
(10) Subject to any direction given under subsection (9) and to
any charges on the assets of the company and any debts to which
priority is given by this Act, all such costs and expenses shall be
payable out of those assets as part of the costs of winding up.
Subdivision (5)--Dissolution
Power of Court to declare dissolution of company void
307. (1) Where a company has been dissolved the Court may, at
any time within two years after the date of dissolution, on application
of the liquidator of the company or of any other person who
appears to the Court to be interested, make an order upon such
terms as the Court thinks fit declaring the dissolution to have been
void, and thereupon such proceedings may be taken as might have
been taken if the company had not been dissolved.
(2) The person on whose application the order was made, shall,
within seven days after the making of the order or such further
time as the Court allows, lodge with the Registrar and with the
Official Receiver an office copy of the order and if he fails so to
do shall be guilty of an offence against this Act.
Penalty: *One thousand ringgit.
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
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Power of Registrar to strike defunct company off register
308. (1) Where the Registrar has reasonable cause to believe that
a company is not carrying on business or is not in operation, he
may send to the company by post a letter to that effect and stating
that if an answer showing cause to the contrary is not received
within one month from the date thereof a notice will be published
in the Gazette with a view to striking the name of the company
off the register.
(2) Unless the Registrar receives an answer within one month
from the date of the letter to the effect that the company is carrying
on business or is in operation, he may publish in the Gazette and
send to the company by registered post a notice that at the expiration
of three months from the date of that notice the name of the
company mentioned therein will, unless cause is shown to the
contrary, be struck off the register and the company will be dissolved.
(3) If in any case where a company is being wound up the
Registrar has reasonable cause to believe that--
(a) no liquidator is acting;
(b) the affairs of the company are fully wound up and for a
period of six months the liquidator has been in default
in lodging any return required to be made by him; or
(c) the affairs of the company have been fully wound up
under Division 2 and there are no assets or the assets
available are not sufficient to pay the costs of obtaining
an order of the Court dissolving the company,
he may publish in the Gazette and send to the company or the
liquidator, if any, a notice to the same effect as that referred to
in subsection (2).
(4) At the expiration of the time mentioned in the notice the
Registrar may, unless cause to the contrary is previously shown,
strike the name of the company off the register, and shall publish
notice thereof in the Gazette, and on the publication in the Gazette
of this notice the company shall be dissolved; but
(a) the liability, if any, of every officer and member of the
company shall continue and may be enforced as if the
company had not been dissolved; and
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(b) nothing in this subsection shall affect the power of the
Court to wind up a company, the name of which has been
struck off the register.
(5) If any person feels aggrieved by the name of the company
having been struck off the register, the Court on an application
made by the person at any time within fifteen years after the name
of the company has been so struck off may, if satisfied that the
company was, at the time of the striking off, carrying on business
or in operation or otherwise that it is just that the name of the
company be restored to the register, order the name of the company
to be restored to the register, and upon an office copy of the order
being lodged with the Registrar the company shall be deemed to
have continued in existence as if its name had not been struck off,
and the Court may by the order give such directions and make such
provisions as seem just for placing the company and all other
persons in the same position as nearly as may be as if the name
of the company had not been struck off.
(6) A notice to be sent under this section to a liquidator may
be addressed to the liquidator at his last known place of business,
and a letter or notice to be sent under this section to a company
may be addressed to the company at its registered office or, if no
office has been registered, to the care of some officer of the
company, or if there is no officer of the company whose name and
address are known to the Registrar, may be sent to each of the
persons who subscribed the memorandum of the company, addressed
to him at the address mentioned in the memorandum.
Registrar to act as representative of defunct company in certain
events
309. (1) Where after company has been dissolved, it is proved to
the satisfaction of the Registrar--
(a) that the company if still existing would be legally or
equitably bound to carry out, complete or give effect to
some dealing, transaction or matter; and
(b) that in order to carry out, complete or give effect thereto
some purely administrative act, not discretionary, should
have been done by or on behalf of the company, or
should be done by or on behalf of the company if still
existing,
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the Registrar may, as representing the company or its liquidator
under this section, do or cause to be done any such act.
(2) The Registrar may execute or sign any relevant instrument
or document adding a memorandum stating that he has done so in
pursuance of this section, and the execution or signature shall have
the same force, validity and effect as if the company if existing
had duly executed such instrument or document.
Outstanding assets of defunct company to vest in Registrar
310. (1) Where, after a company has been dissolved, there remains
any outstanding property, movable or immovable, including things
in action and whether within or outside Malaysia which was vested
in the company or to which it was entitled, or over which it had
a disposing power at the time it was so dissolved, but which was
not got in, realized upon or otherwise disposed of or dealt with
by the company or its liquidator, the property except called and
uncalled capital shall, for the purposes of the following sections
of this Subdivision and notwithstanding any written law or rule of
law to the contrary, by the operation of this section be and become
vested in the Registrar for all the estate and interest therein, legal
or equitable, of the company or its liquidator at the date the company
was dissolved, together with all claims, rights and remedies which
the company or its liquidator then had in respect thereof.
(2) Where any claim, right or remedy of the liquidator may,
under this Act, be made, exercised or availed of only with the
approval or concurrence of the Court or some other person, the
Registrar may, for the purposes of this section, make, exercise or
avail himself of that claim, right or remedy without that approval
or concurrence.
Outstanding interests in property how disposed of
311. (1) Upon proof to the satisfaction of the Registrar that there
is vested in him by operation of section 310 or by operation of any
corresponding previous written law or of a law of a designated
country corresponding with section 318 any estate or interest in
property, whether solely or together with any other person, of a
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beneficial nature and not merely held in trust, the Registrar may
sell or otherwise dispose of or deal with such estate or interest or
any part thereof as he sees fit.
(2) The Registrar may sell or otherwise dispose of or deal with
the property either solely or in concurrence with any other person
in such manner for such consideration by public auction, public
tender or private contract upon such terms and conditions as he
thinks fit, with power to rescind any contract and resell or otherwise
dispose of or deal with such property as he thinks expedient, and
may make, execute, sign and give such contracts, instruments and
documents as he thinks necessary.
(3) The Registrar shall be remunerated by such commission,
whether by way of percentage or otherwise, as is prescribed in
respect of the exercise of the powers conferred upon him by subsection
(1).
(4) The moneys received by the Registrar in the exercise of any
of the powers conferred on him by this Subdivision shall be applied
in defraying all costs, expenses, commission and fees incidental
thereto and thereafter to any payment authorized by this Subdivision
and the surplus, if any, shall be dealt with as if they were unclaimed
moneys under the law relating to unclaimed moneys.
Liability of Registrar and Government as to property vested
in Registrar
3 1 2 .  P r o p e r t y vested in the Registrar by operation of this
Subdivision or by operation of any corresponding previous written
law shall be liable and subject to all charges, claims and liabilities
imposed thereon or affecting the property by reason of any statutory
provision as to rates, taxes, charges or any other matter or thing
to which the property would have been liable or subject had the
property continued in the possession, ownership or occupation of
the company; but there shall not be imposed on the Registrar or
the Government any duty, obligation or liability whatsoever to do
or suffer any act or thing required by any such statutory provision
to be done or suffered by the owner or occupier other than the
satisfaction or payment of any such charges, claims or liabilities
out of the assets of the company so far as they are in the opinion
of the Registrar properly available for and applicable to the payment.
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Accounts and audit
313. (1) The Registrar shall--
(a) record in the register of companies a statement of any
property coming to his hand or under his control or to
h i s knowledge vested in him by operation of this
Subdivision and of his dealings therewith;
(b) keep accounts of all moneys arising therefrom and of
how they have been disposed of; and
(c) keep all accounts, vouchers, receipts and papers relating
to the property and moneys.
(2) The Auditor General shall have all the powers in respect of
those accounts as are conferred upon him by any Act relating to
audit of public accounts.
DIVISION 5
WINDING UP OF UNREGISTERED COMPANIES
"Unregistered company"
314. (1) For the purposes of this Division "unregistered company"
includes a foreign company and any partnership, association or
company consisting of more than five members but does not include
a company incorporated under this Act or under any corresponding
previous written law.
Provisions of Division cumulative
(2) The provisions of this Division shall be in addition to and
not in restriction of any provisions contained in this or any other
Act with respect to winding up companies by the Court and the
Court or liquidator may exercise any powers or do any act in the
case of unregistered companies which might be exercised or done
by it or him in winding up companies.
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Winding up of unregistered companies
315. (1) Subject to this Division any unregistered company may
be wound up under this Part, which Part shall apply to an unregistered
company with the following adaptations:
(a) the principal place of business of the company in Malaysia
shall for all the purposes of the winding up be the registered
office of the company;
(b) no such company shall be wound up voluntarily; and
(c) the circumstances in which the company may be wound
up are--
(i) if the company is dissolved or has ceased to have
a place of business in Malaysia or has a place of
business in Malaysia only for the purpose of winding
up its affairs or has ceased to carry on business
in Malaysia;
(ii) if the company is unable to pay its debts; and
(iii) if the Court is of opinion that it is just and equitable
that the company should be wound up.
(2) An unregistered company shall be deemed to be unable to
pay its debts if--
(a) a creditor by assignment or otherwise to whom the company
is indebted in a sum exceeding five hundred ringgit then
due has served on the company, by leaving at its principal
place of business in Malaysia or by delivering to the
secretary or some director, manager or principal officer
of the company or by otherwise serving in such manner
as the Court approves or directs, a demand under his
hand requiring the company to pay the sum so due and
the company has for three weeks after the service of the
demand neglected to pay the sum or to secure or compound
for it to the satisfaction of the creditor;
(b) any action or other proceeding has been instituted against
any member for any debt or demand due or claimed to
be due from the company or from him in his character
of member, and, notice in writing of the institution of the
action or proceeding having been served on the company
by leaving it at its principal place of business in Malaysia
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or by delivering it to the secretary or some director,
manager or principal officer of the company or by otherwise
serving it in such manner as the Court approves or directs,
the company has not within ten days after service of the
notice paid, secured or compounded for the debt or demand
or procured the action or proceeding to be stayed or
indemnified the defendant to his reasonable satisfaction
against the action or proceeding and against all costs,
damages and expenses to be incurred by him by reason
thereof;
(c) execution or other process issued on a judgment, decree
or order obtained in any court in favour of a creditor
against the company or any member thereof as such or
any person authorized to be sued as nominal defendant
on behalf of the company is returned unsatisfied; or
(d) it is otherwise proved to the satisfaction of the Court that
the company is unable to pay its debts.
(3) A company incorporated outside Malaysia may be wound
up as an unregistered company under this Division notwithstanding
that it is being wound up or has been dissolved or has otherwise
ceased to exist as a company under or by virtue of the laws of the
place under which it was incorporated.
(4) In this section "to carry on business" has the same meaning
as it has in section 330.
Contributories in winding up of unregistered company
316. (1) On an unregistered company being wound up every person
shall be a contributory--
(a) who is liable to pay or contribute to the payment of--
(i) any debt or liability of the company;
(ii) any sum for the adjustment of the rights of the
members among themselves; or
(iii) the costs and expenses of winding up; or
(b) where the company has been dissolved in the place in
which it is formed or incorporated, who immediately
before the dissolution was so liable,
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and every contributory shall be liable to contribute to the assets
of the company all sums due from him in respect of any such
liability.
(2) On the death or bankruptcy of any contributory the provisions
of this Act with respect to the personal representatives of deceased
c o n t r i b u t o r i e s and the assignees and trustees of bankrupt
contributories respectively shall apply.
Power of Court to stay or restrain proceedings
317. (1) The provisions of this Act with respect to staying and
restraining actions and proceedings against a company at any time
after the presentation of a petition for winding up and before the
making of a winding up order shall, in the case of an unregistered
company where the application to stay or restrain is by a creditor,
extend to actions and proceedings against any contributory of the
company.
(2) Where an order has been made for winding up an unregistered
company, no action or proceeding shall be proceeded with or
commenced against any contributory of the company in respect of
any debt of the company except by leave of the Court and subject
to such terms as the Court imposes.
Outstanding assets of defunct unregistered company
318. (1) Where an unregistered company, the place of incorporation
or origin of which is in a designated country, has been dissolved
and there remains in Malaysia any outstanding property, movable
or immovable, including things in action which was vested in the
company or to which it was entitled or over which it had a disposing
power at the time it was dissolved, but which was not got in,
realized upon or otherwise disposed of or dealt with by the company
or its liquidator before the dissolution, the property, except called
and uncalled capital, shall, by the operation of this section, be and
become vested, for all the estate and interest therein, legal or
equitable, of the company or its liquidator at the date the company
was dissolved, in such person as is entitled thereto according to
the law of the place of incorporation or origin of the company.
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(2) Where the place of origin of an unregistered company is
Malaysia, sections 309 to 313 shall, with such adaptations as may
be necessary, apply in respect of that company.
(3) Where it appears to the Minister that any law in force in
any other country contains provisions similar to the provisions of
this section, he may, by notice published in the Gazette, declare
that other country to be a designated country for the purposes of
this section.
PART XI
VARIOUS TYPES OF COMPANIES, ETC.
DIVISION 1
INVESTMENT COMPANIES
Interpretation
319. (1) In this Division, unless inconsistent with the context or
subject matter--
"investment company" means a corporation (not being a private
company) for the time being declared by order of the Minister to
be an investment company;
"net tangible assets" means tangible assets at book values less
total liabilities at book values and less any aggregate amount by
which the book value of the marketable securities held by the
corporation exceeds their market value.
Order of investment companies
(2) The Minister may, by order published in the Gazette, declare
to be an investment company any corporation which is engaged
primarily in the making of investments in marketable securities for
the purpose of revenue and for profit and not for the purpose of
exercising control, and the Minister may by like order revoke any
order declaring a corporation to be an investment company.
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Restriction on borrowing by investment companies
320.  An investment company shall not borrow an amount if that
amount or the sum of that amount and any amounts previously
borrowed by it and not repaid exceeds an amount equivalent to
twice its net tangible assets.
Restriction on investments of investment companies
321. (1) An investment company shall not invest an amount in a
corporation if that amount, or the sum of that amount and amounts
previously invested by it in that corporation and still so invested
exceeds an amount equivalent to ten per centum of the net tangible
assets of the investment company.
(2) An investment company shall not invest an amount in the
ordinary shares of a corporation if that amount, or the sum of that
amount and amounts previously invested by it in the ordinary
shares of that corporation and still so invested exceeds an amount
equivalent to ten per centum of the subscribed ordinary share
capital of the corporation.
(3) Subsection (2) shall not apply in respect of a wholly-owned
subsidiary of an investment company for the purpose of carrying
out nominee, underwriting, dealing or other functions incidental
to the business of an investment company.
Restriction on underwriting by investment companies
322. (1) An investment company shall not underwrite any issue
of authorized securities to an amount that, when added to the
amount or amounts, if any, to which it has previously underwritten
a current issue or issues of other authorized securities (not being
an amount or amounts in respect of which the underwriting obligation
has been discharged), exceeds an amount equivalent to forty per
centum of its net tangible assets.
(2) An investment company shall not underwrite any issue of
non-authorized securities to an amount that, when added to the
amount or amounts, if any, to which it has previously underwritten
a current issue or issues of other non-authorized securities (not
being an amount or amounts in respect of which the underwriting
obligation has been discharged), exceeds an amount equivalent to
twenty per centum of its net tangible assets.
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Provisions for unloading securities underwritten and not taken
up
(3) Where--
(a) an investment company has underwritten any issue of
securities and, in relation to the underwriting, has not
contravened subsection (1) or (2); and
(b) the investment company, as a result of the underwriting,
invests in a corporation, being an investment contrary to
section 321,
the investment company shall be deemed not to have contravened
that section by reason of so investing in the corporation if, at the
expiration of twelve months after so investing--
(c) the amount invested by it in the corporation does not
exceed an amount equivalent to ten per centum of the net
tangible assets of the investment company; and
(d) it does not hold more than five per centum of the subscribed
ordinary share capital of the corporation.
(4) This section extends to and in relation to sub-underwriting
as if the sub-underwriting were underwriting.
Interpretation
(5) In this section--
"authorized securities" means securities in which, by any written
law trustees are authorized to invest trust funds in their hands;
"non-authorized securities" means securities other than authorized
securities.
Special requirements as to articles and prospectus
323. An investment company shall not issue a prospectus or permit
a prospectus to be issued on its behalf unless the prospectus
specifies--
(a) the type of security in which it is among the objects of
the company to invest; and
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(b) whether it is among the objects of the company to invest
within Malaysia or outside Malaysia or both.
Not to hold shares in other investment companies
324.  No investment company shall purchase or after the expiration
of three years after it is declared to be an investment company hold
any shares in or debentures of--
(a) any other investment company; or
(b) any corporation incorporated outside Malaysia which is
e n g a g e d primarily in the making of investments in
marketable securities for the purpose of revenue and for
profit and not for the purpose of exercising control and
which is specified by order of the Minister.
Not to speculate in commodities
325. (1) No investment company shall for the purpose of profit
buy or sell or deal in any raw materials or manufactured goods,
whether in existence or not, otherwise than by investing in companies
trading in those materials or goods.
(2) Subsection (1) shall not apply to or in relation to--
(a) any buying, selling or dealing by an investment company
in pursuance of a contract entered into by the investment
company before it was declared to be an investment
company; or
(b) the selling of or the dealing in raw materials or manufactured
goods acquired by the investment company before it was
so declared.
Balance sheets and accounts
326. (1) An investment company shall attach to its balance sheet
a complete list of all the investments of the company as at the date
of the balance sheet showing the descriptions and quantities of
those investments.
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(2) An investment company shall show separately in the profit
and loss account, in addition to any other matters required to be
s h o w n therein, income from underwriting (including sub-
underwriting).
Investment fluctuation reserve
327.  The net profits and losses of an investment company from
the purchase and sale of securities shall be respectively credited
and debited by the company to a reserve account to be kept by it
and to be called the "investment fluctuation reserve".
Penalties
328. (1) If default is made by an investment company in complying
with this Division the investment company and every officer of
the investment company who is in default shall be guilty of an
offence against this Act.
Penalty: Imprisonment for *five years or thirty thousand ringgit.
Default penalty: Five hundred ringgit.
(2) No transaction entered into by the company shall be invalid
by reason only of the default.
DIVISION 2
FOREIGN COMPANIES
Foreign companies to which this Division applies
329.  This Division applies to a foreign company only if it has
a place of business or is carrying on business within Malaysia.
Interpretation
330. (1) In this Division, unless the contrary intention appears--
"agent" means the person named in a memorandum of appointment
or power of attorney lodged under paragraph 332(1)(e) or subsection
333(6) or under any corresponding previous written law;
*NOTE--Previously "two years or five thousand ringgit"see Companies (Amendment) Act 1986
[Act A657].
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"carrying on business" includes establishing or using a share
transfer or share registration office or administering, managing or
otherwise dealing with property situated in Malaysia as an agent,
legal personal representative, or trustee, whether by servants or
agents or otherwise, and "to carry on business" has a corresponding
meaning.
(2) Notwithstanding subsection (1), a foreign company shall
not be regarded as carrying on business within Malaysia for the
reason only that within Malaysia it--
(a) is or becomes a party to any action or suit or any
administrative or arbitration proceeding or effects settlement
of an action, suit or proceeding or of any claim or dispute;
(b) holds meetings of its directors or shareholders or carries
on other activities concerning its internal affairs;
(c) maintains any bank account;
(d) effects any sale through an independent contractor;
(e) solicits or procures any order which becomes a binding
contract only if the order is accepted outside Malaysia.
(f) creates evidence of any debt, or creates a charge on
movable or immovable property;
(g) secures or collects any of its debts or enforces its rights
in regard to any securities relating to those debts;
(h) conducts an isolated transaction that is completed within
a period of thirty-one days, but not being one of a number
of similar transactions repeated from time to time;
(i) invests any of its funds or holds any property; or
(j) import goods only temporarily pursuant to the Customs
Act 1967 [Act 235] for the purpose of display, exhibition,
demonstration or as trade samples with a view to subsequent
re-exportation within a period of three months or within
such further period as the Director General of Customs
and Excise may in his discretion allow.
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Power of foreign companies to hold immovable property
331.  Subject to and in accordance with any written law a foreign
company registered under this Division shall have power to hold
immovable property in Malaysia.
Documents, etc., to be lodged by foreign companies having
place of business in Malaysia
332. (1) Every foreign company desiring to establish a place of
business or to carry on business within Malaysia shall lodge with
the Registrar for registration--
(a) a certified copy of the certificate of its incorporation or
registration in its place of incorporation or origin or a
document of similar effect;
(b) a certified copy of its charter, statute or memorandum
and articles or other instrument constituting or defining
its constitution;
(c) a list of its directors containing similar particulars with
respect to its directors as are by this Act required to be
contained in the register of the directors, managers and
secretaries of a company incorporated under this Act;
(d) where the list includes directors resident in Malaysia
who are members of the local board of directors, a
memorandum duly executed by or on behalf of the foreign
company stating the powers of the local directors;
(e) a memorandum of appointment or power of attorney under
the seal of the foreign company or executed on its behalf
in such manner as to be binding on the company and, in
either case, verified in the prescribed manner, stating the
name and address of one or more persons resident in
Malaysia, not including a foreign company, authorized to
accept on its behalf service of process and any notices
required to be served on the company; and
(f) (Deleted by Act A616).
(g) a statutory declaration in the prescribed form made by
the agent of the company,
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and the Registrar may on the payment of the appropriate fees and
subject to this Act and any condition which he may impose register
the company under this Division by registration of the documents.
(1A) The Registrar shall issue a certificate in the prescribed
form of every registration of a foreign company and the certificate
shall be conclusive evidence that the requirements as to registration
have been complied with.
(2) Where a memorandum of appointment or power of attorney
lodged with the Registrar in pursuance of paragraph (1)(e) is executed
by a person on behalf of the company, a copy of the deed or
document by which that person is authorized to execute the
memorandum of appointment or power of attorney, verified by
statutory declaration in the prescribed manner, shall be lodged
with the Registrar and the copy shall for all purposes be regarded
as an original.
(3) Subsection (1) shall apply to a foreign company which was
not registered under the repealed Act but which, immediately before
the date of commencement of this Act, had a place of business or
was carrying on business within Malaysia and, on that date, has
a place of business or is carrying on business within Malaysia, as
if it established that place of business or commenced to carry on
that business on that date.
Annual return
332A. (1) A foreign company shall lodge with the Registrar once
in every calendar year a return in the form prescribed by regulations
made up to the date of its annual general meeting.
(2) The return shall be lodged within a period of one month
after the date to which it is made up or within such further period
as the Registrar, in special circumstances, allows.
As to registered office and agents of foreign companies
333. (1) A foreign company shall have a registered office within
Malaysia to which all communications and notices may be addressed
and which shall be open and accessible to the public for not less
than five hours between the hours of nine o'clock in the morning
and five o'clock in the evening each day, Saturdays, weekly and
public holidays excepted.
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(1A) Every foreign company shall, within one month after it
establishes a place of business or commences to carry on business
within Malaysia, lodge with the Registrar for registration notice
in the prescribed form, of the situation of its registered office in
Malaysia and, unless the office is open and accessible to the public
during ordinary business hours on each day (weekly and public
holidays excepted), the days and hours during which it is open and
accessible to the public.
(2) An agent, until he ceases to be an agent in accordance with
subsection (4), shall--
(a) continue to be the agent of the company;
(b) be answerable for the doing of all such acts, matters and
things as are required to be done by the company by or
under this Act; or
(c) be personally liable to all penalties imposed on the company
for any contravention of this Act unless he satisfies the
court hearing the matter that he should be not so liable.
(3) A foreign company or its agent may lodge with the Registrar
a notice in writing stating that the agent has ceased to be the agent
or will cease to be the agent on a date specified in the notice.
(4) The agent in respect of whom the notice has been lodged
shall cease to be an agent on the expiration of a period of twenty-
one days after the date of lodgment of the notice or on the date
of the appointment of another agent the memorandum of whose
appointment has been lodged in accordance with subsection (6),
whichever is the earlier, but if the notice states a date on which
he is to so cease and the date is later than the expiration of that
period, on that date.
(5) Where an agent ceases to be the agent and the company is
then without an agent in Malaysia, if the company continues to
carry on business or has a place of business in Malaysia it shall,
within twenty-one days after the agent ceases to be an agent,
appoint an agents.
(6) On the appointment of a new agent the company shall lodge a
memorandum of the appointment or power of attorney and a statutory
declaration in accordance with subsection 332(1) and, if not