What is the requirement of strike off the name of a company under Section 550 of the Companies Act 2016?

  • Under Section 549(a) of CA 2016, the Registrar may exercise his discretionary power to strike the name of a company off the register if Registrar has reasonable cause to believe that the company is not carrying on business or is not in operation.
  • Registrar may form the opinion based on the following to determine whether a company is not carrying on business or is not in operation.
  1. Information in records of the company under the Registrar’s custody
  2. Through application made to Registrar by a director or shareholder/member of a company under S550 of CA 2016

Requirement for an application pursuant to Section 550 CA 2016

  • The resolution of the shareholders have been passed for the initiation of the application to strike off the name of the company from the register on the basis that the company is not carrying on business or not in operation.
    • Resolution passed and reflect the consent of the majority shareholders
    • If the requisite majority cannot be obtained due to shareholder(s) who is untraceable, the application may still submitted to Registrar provided that attempts have been made to trace the shareholder(s) at the residential address as stated in the Registrar’s records.
      • Those attempts must be made by way of registered post.
      • Proof of any other modes of attempt (if any) must also be attached to the application.
  • The company has no assets and liabilities at the time when the application is made.
    • If the company’s last audited financial statements lodged with the Registrar showed that the company has assets and liabilities, the applicant must submit documentary evidence to show that the assets have been disposed and that the liabilities have been settled or waived.
      • It may attach the management account which signed by director.
    • If the company has not commenced operation, the applicant must make the following declaration :
      • That there has no transaction since the company was incorporated; and
      • That the company has not opened a bank account or if there is an account, that the account has been closed (the latest bank statement is to be attached).
  • The company has no outstanding charges in the Register of Charges.
  • The company has no outstanding penalties or offer of compounds under the Companies Act 2016
  • The company has no outstanding tax or other liabilities with any Government Department or Agency.
  • The information of the company with the Registrar is up to date.
    • The company must first ensure that the Registrar’s records are updated before an application for striking off is made.
  • The company is not involved in any legal proceeding within or outside Malaysia.
  • The Company has not made any return of capital to the shareholders
    • The company is prohibited to make any return of capital to the shareholders to enable it to apply for a striking off under section 550.
    • If a company still have its capital, the company should proceed with the voluntary winding up process to formally cease its existence.
  • The company is not a holding company
  • The company is not a “Guarantor Corporation”

Additional requirement for application by subsidiary companies.

  • The registrar may also exercise his discretion to allow the name of dormant subsidiary companies to be struck off under Section 549 of CA 2016.
  • Apart from complying with the above requirements (10 requirements), the subsidiary companies must also fulfil the following requirements:

Additional requirement for application by subsidiary companies.

    • In the case of wholly-owned subsidiary, a letter of consent from the holding company is required to be attached to the application.
      • Letter of consent must be signed by one of the directors of the holding company and be printed on the holding company’s letterhead
    • In the case of company other than a wholly owned subsidiary, letters of consent from all shareholders are required to be attached  to the application.
      • The letters of consent must be signed, dated and bear the signature of the shareholders.
      • Where any of the shareholders is a company, the letter of consent must be signed by all the directors and printed on the company’s letterhead
    • The holding and subsidiary companies must declare that they are not subject to or involved in any investigation or any prosecution by any authority to the best knowledge of the director/shareholder signing the application for striking-off or the directors/shareholders signing the consent letter.

Additional requirement for application by Company limited by Guarantee

    • In the case of an application relating to a company limited by guarantee, in addition to the 10 requirements above, the application must be accompanied with its latest audited financial statements.