How to Strike Off a Company in Malaysia: Legal Process, Requirements & Key Steps

Closing a company in Malaysia involves specific legal and procedural requirements to ensure compliance with the Companies Act 2016. Striking off a company is a common method for dissolving a business that is no longer operational or has fulfilled its purpose. 

In this article, we will walk you through the process, eligibility criteria to help you ensure a smooth company strike-off in Malaysia.

What is a Company Strike Off in Malaysia? 

Striking off a company involves removing its name from the Register of Companies maintained by the Companies Commission of Malaysia (SSM). Once struck off, the company ceases to exist as a legal entity and is no longer liable for compliance, taxes, or operational activities.

There are two types of strike offs:

• Voluntary Strike Off: Occurs when you, as a director or shareholder, voluntarily apply for the dissolution of the company. It typically happens when you have ceased operations, have no assets or liabilities, and have no intention to continue business.
• Involuntary Strike Off: The SSM initiates this process when your company fails to comply with its legal obligations, such as submitting annual returns or financial statements. Involuntary strike offs are less common but can occur as a result of non-compliance or other legal issues.

Requirements for Striking Off a Company

To initiate a company strike-off in Malaysia, ensure that your company meets the following requirements under the Companies Act 2016:

1. Inactivity: The company must not have been in operation or carrying out business for at least 12 months.
2. No Assets or Liabilities: All company assets must be disposed of, and liabilities, including taxes and employee salaries, must be fully settled.
3. No Pending Legal Proceedings: The company is not involved in any ongoing legal disputes.
4. No Outstanding Penalties: Pay any fines or penalties with the SSM.
5. No Secured Creditors: The company must not have any secured loans or creditors.
6. Unanimous Agreement: All directors and shareholders must agree to the strike-off application.

How to Strike Off a Company in Malaysia

The process for striking off a company in Malaysia varies depending on the legal entity. While sole proprietorships only require submission of form C and clear tax obligation, private limited (Sdn Bhd) and public (Berhad) companies require an extensive process.

1. Cease All Business Activities

Before applying for a strike off, you must have ceased all business activities. This includes notifying clients, shutting down operations, and stopping all transactions.

2. Clear Outstanding Obligations

In addition to ceasing business activities, you must ensure the company has settled all outstanding debts, taxes, and obligations with relevant authorities such as the Inland Revenue Board (IRB), Employees Provident Fund (EPF), and Social Security Organisation (SOCSO).

3. Obtain Directors’ and Shareholders’ Consent

A resolution must be passed by the board of directors and approved unanimously by all shareholders to proceed with the strike-off application.

4. Apply to SSM for a Company Strike Off

Once your company has ceased activities and cleared liabilities, the next step is to submit an application for strike off to SSM. Our experts will help you ensure all mandatory documents are in order, including:

• A completed strike off application form.
• A statutory declaration confirming cessation of business and settlement of liabilities.
• Letter of Request for Strike Off.
• Copies of your company’s latest financial statements.
• Tax clearance from the LHDN.
• Any other supporting documents as requested by SSM.

5. SSM Review and Objection Period 

After submitting the application, the SSM will review the documents and verify your company’s eligibility for strike off. This is followed by an objection period which lasts 30 days. During this time, creditors or other parties may raise objections to the strike off. 

6. Official Public Notification

If there are no disputes or objections during the review period, the SSM publishes a public notification of your company’s strike off in the Federal Gazette. This serves as an official announcement of the company’s dissolution.

7. Final Dissolution

After publication in the Federal Gazette, your company is officially struck off the register, and ceases to exist as a legal entity. No further actions are required unless new issues arise, in which case the process may be reversed.

Alternatives to Striking Off a Company in Malaysia

If your company does not meet the criteria for a strike-off or if the situation calls for other solutions, there are two primary alternatives to consider: Voluntary Liquidation and Dormant Status. Both options come with distinct processes and compliance obligations under the Companies Act 2016.

1. Voluntary Liquidation

Voluntary liquidation is a formal process where a company winds up its operations and distributes its remaining assets to creditors and shareholders. Companies typically choose this option when they have assets, liabilities, or ongoing legal obligations that prevent it from qualifying for a strike-off.

2. Dormant Status

If a company is not currently operational but may resume activities in the future, applying for dormant status with the SSM is a viable alternative. Dormant status allows the company to retain its registration while reducing its compliance obligations.

How Emerhub Can Help with Company Strike Off in Malaysia

Choosing between striking off, voluntary liquidation, or dormant status depends on your company’s unique situation. If you are unsure, it is advisable to talk to our local experts who will recommend the most appropriate solution based on your needs and handle the process on your behalf.

For more details, fill out the form below and get in touch with one of our local experts!