Liquidation & Receivership
Liquidation & Receivership
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Receivership
Receiver
A receiver means a person who receives rents or other income, paying ascertained outgoings; but he does not manage the property in the sense of buying and selling anything of that kind. The receiver merely takes the income and pays necessary outgoings: the manager carries on the trade or business.
Receiver and Manager
The purpose of making provision for the appointment of a receiver and manager is to keep the business alive in order to sell it as a going concern, i.e., to restore the company to financial stability, akin to a company doctor. A desktop review will be conducted before we table our critical findings; we will propose to you on whether the appointment of a receiver is more appropriate compared to that of a receiver and manager.
Voluntary Liquidation
Members
Voluntary liquidation is only possible if the company is solvent.
The effect of putting up a company into liquidation is to cease its liabilities as well as its directors’.
This process will normally be embarked upon by the board of directors after having decided that the objective of the company’s formation is met and/or the business of the company has ceased.
Approval from the shareholders is required.
A Liquidator will be appointed by the board of directors with approval from the shareholders to administer the affairs of the company.
Under a members’ voluntary liquidation, a liquidator needs not to have to be a licensed liquidator, though it is the preferred choice.
Creditors
A members’ voluntary liquidation will become a creditors’ voluntary liquidation if the debts owed by the debtor could not be repaid within 1 year of the members’ liquidation commences.
The liquidator appointed shall have the duty to call for a meeting of creditors and shareholders to decide if the creditors wish to continue with the appointed liquidator originally nominated by the Board of directors/shareholders.
Any creditor is entitled to nominate its own licensed liquidator and a resolution by way of a simple majority shall be obtained.
Creditor-nominated liquidator will prevail over the liquidator nominated by the debtor company’s director/shareholder.
In-Voluntary Liquidation
A company is forced to cease its business by an order of court via a petition by creditors and/or shareholders of a company is normally referred to as a court/compulsory liquidation.
Under a normal scenario, a winding-up order can be granted by the court if a debtor company is unable to pay its debt of more than RM50,000.00 after being served with a statutory notice of demand.
In another common scenario where a winding-up order can also be granted is under just and equitable grounds. Under such circumstances, it normally involves a dispute between the shareholders of a company that will see a tussle in the boardroom.
Effect of a court liquidation is the power of the board of directors ceases upon the granting of the winding-up order. In default of nomination of a private liquidator, the government liquidator will be appointed as the interim liquidator. The interim liquidator will have to call a meeting of creditors and shareholders to decide if a private liquidator will be appointed and failing which, the government liquidator will be appointed as the liquidator.
Services
Appoint?
Who can Apply
- Debenture Holder
Receiver & Manager or Receiver
To take possession and/or control of the management and/or assets and dispose of asset to pay debenture holder.
Appoint?
Who can Apply
- Shareholder
- Director
Members or Creditors Appointed Liquidator
To dissolve the company/partnership and crystallize the liabilities of directors and discharge directors' statutory obligations. To dispose of all assets and pay the proceeds to shareholders as a dividend from the realization of their investment. Creditor-nominated liquidator prevails over the liquidator nominated by the debtor company/shareholder.
Appoint?
Who can Apply
- Creditor
- Shareholder
Court-Appointed Interim Liquidator
To take possession and/or control of the affairs of debtor company in order to preserve the assets pending the outcome of a court’s decision.
Appoint?
Who can Apply
- Creditor
- Shareholder
Court-Appointed Liquidator
To take possession and/or control of the affairs of debtor company, to sell assets and distribute dividend to all proven unsecured creditors, and if surplus, to shareholders.
Appoint?
Who can Apply
- Judgement Creditor
- Partner
Court-Appointed
Receiver & Manager or Receiver
To take possession and/or control of the business and/or assets of debtor company and to dispose of to pay judgment creditor or distribute to partners of dissolved partnership.