In the world of business, companies can face various circumstances that could lead to their removal from the Register of Companies. This process, commonly known as “striking off”, can occur either voluntarily or compulsorily. However, there are situations where these companies may need to be reinstated. This article provides a comprehensive guide to reinstating a struck-off company in Malaysia.
Understanding Strike Off
Strike off is a procedure where a company is removed from the Register of Companies. In Malaysia, the Companies Commission of Malaysia (SSM) can strike off a company under two circumstances. Firstly, a voluntary strike off can be initiated by the company’s members or directors if the company has ceased operations and has no outstanding liabilities or assets. Secondly, a compulsory strike off can be enforced by SSM if the company fails to comply with statutory requirements such as late filing of annual returns or financial statements.
The Need for Reinstatement
A company may need to be reinstated for various reasons. It could be to recover assets still held in the company’s name, to continue the company’s operations, or to pursue legal matters. However, the reinstatement process can be complex and requires a thorough understanding of the law, specifically the Companies Act 2016 in Malaysia.
Legal Framework for Company Reinstatement in Malaysia
The Companies Act 2016 governs the reinstatement of struck-off companies in Malaysia. According to the Act, a company can be reinstated within seven years of being struck off. After the seven-year period, reinstatement is only possible through a court order.
Reinstatement Procedure
The reinstatement procedure involves several steps, as outlined below:
- Making an Application: The application for reinstatement can be made by a former director, member, liquidator, or creditor of the company. The applicant must provide a valid reason for the reinstatement.
- Settling Outstanding Penalties and Fees: The company must settle any outstanding penalties or fees owed to the SSM before the reinstatement application can be processed.
- Filing of Documents: The company must submit all outstanding documents, such as annual returns and financial statements, to the SSM.
- Approval by SSM: The SSM will review the application and may approve the reinstatement if all conditions are met.
Legal Assistance
Given the complexity of the reinstatement process, it is advisable to seek legal assistance. A competent lawyer can provide guidance and ensure that all legal requirements are met. This not only simplifies the process but also increases the chances of successful reinstatement.
Frequently Asked Questions (FAQs)
Does the reinstatement process fall under the jurisdiction of the High Court in Malaysia?
Yes, if the company has been struck off for more than seven years, the reinstatement process will fall under the jurisdiction of the High Court in Malaysia. You will need to apply for a court order for the reinstatement of the company. It is highly recommended to seek legal counsel in such situations due to the complexity of the legal proceedings.
Can a company be reinstated after voluntarily being struck off?
Yes, a company can be reinstated even if it was voluntarily struck off. The process is the same as if the company was compulsorily struck off. However, a valid reason for the reinstatement must be provided.
Who can apply for the reinstatement of a company?
A former director, member, liquidator, or creditor of the company can apply for its reinstatement. The application must be supported with a valid reason for reinstatement.
What are the consequences if a company fails to reinstate after being struck off?
If a company fails to reinstate after being struck off, it ceases to exist as a legal entity. This means that the company cannot conduct business, hold assets, or be involved in legal proceedings. Further, the directors of the company may be held personally liable for any outstanding liabilities of the company.
What are the costs involved in reinstating a company?
The costs involved in reinstating a company include the application fee to SSM, any outstanding penalties or fees owed to SSM, and any professional fees for legal or accounting services. The exact cost can vary depending on the specific circumstances of the company.
How long does the reinstatement process take?
The reinstatement process can take several months to a year, depending on the complexity of the case and the speed of the administrative process. This includes time for preparation and submission of documents, review by SSM, and any legal proceedings if applicable.
Conclusion
In conclusion, reinstating a struck-off company in Malaysia involves a thorough understanding of the Companies Act 2016 and the SSM’s requirements. While the process may seem daunting, with the right legal guidance, it is possible to navigate these challenges successfully.
Please note that this article and the answers provided in the FAQ are general in nature and may not apply to specific situations. Always consult with a legal professional when dealing with company reinstatement matters.
