How to Close a SdnBhd Company in Malaysia: A Step-by-Step Guide
Starting a SdnBhd (SendirianBerhad) company in Malaysia can be an exciting business venture, but there may come a time when the decision to close the company becomes necessary. Whether due to business challenges, financial strain, or simply a change in business direction, closing a SdnBhd company is a process that requires careful attention to legal and regulatory requirements. In this article, we will walk you through the steps on how to close a SdnBhd company in Malaysia, and highlight the important roles of secretarial services, tax advisory, and consultants in ensuring a smooth closure process.
Understanding the Legal Structure: SdnBhd Company in Malaysia
Before we dive into the closure process, it’s essential to understand what a SdnBhd company is in Malaysia. A SendirianBerhad (SdnBhd) company is a private limited company in Malaysia, which limits the liability of its shareholders to the amount of their unpaid shares. This structure is popular among entrepreneurs and business owners because it offers limited liability protection and allows for easier access to capital.
However, there may come a time when an owner or shareholder wishes to shut down the company due to various reasons such as:
• Insolvency
• Business restructuring
• Change of direction in business focus
• Retirement or personal reasons
Regardless of the reason, closing a SdnBhd company requires compliance with specific laws and regulations to ensure that the company’s liabilities are settled and its legal existence is formally terminated.
Steps on How to Close a SdnBhd Company in Malaysia
Closing a SdnBhd company in Malaysia is not an overnight process. It involves several steps that must be followed according to the Companies Act 2016. Here’s a comprehensive guide on how to close your company:
1. Appoint a Professional Secretarial Service
One of the first steps in closing a company is to engage a professional secretary company in Malaysia. A company secretary is responsible for ensuring that your company complies with the legal and regulatory requirements in Malaysia. They will help prepare the necessary documents and filings to initiate the closure process.
In Malaysia, a company is legally required to have a qualified company secretary, and this same professional will play an essential role during the closure process. They will help you decide on the most appropriate method for closing the company, whether it’s through voluntary liquidation, striking off, or winding up.
2. Settle All Company Liabilities
Before you can formally close your company, you must settle all outstanding debts and liabilities. This includes paying off creditors, employees, suppliers, and ensuring that any ongoing contractual obligations are resolved. If the company has assets, they may need to be liquidated in order to pay off these liabilities.
It is advisable to hire a tax advisory Malaysia or tax consultant Malaysia to guide you through this process, especially if your company has tax liabilities. Tax consultants can assist with ensuring that all taxes, such as Corporate Tax, Goods and Services Tax (GST), and other dues, are cleared before closure.
3. Apply for a Tax Clearance
Once all liabilities are cleared, you must apply for a tax clearance from the Inland Revenue Board of Malaysia (LHDN). This clearance proves that the company has met all its tax obligations, and it is a crucial step in closing a SdnBhd company.
You may need to provide the following documents when applying for tax clearance:
• A statement of accounts showing that the company has no outstanding tax liabilities
• The company’s last filed tax return
• Proof of settlement of any other dues with LHDN
Engaging with a tax advisory Malaysia ortax consultant Malaysia during this step ensures that your tax affairs are in order and that you avoid penalties or legal issues.
4. Pass a Resolution to Close the Company
After settling liabilities and obtaining tax clearance, a board resolution must be passed to officially close the company. This resolution should be recorded in the minutes of the meeting and signed by all directors. In some cases, the members (shareholders) of the company may also need to pass a resolution in a general meeting.
This is another area where your company secretary’s expertise comes in handy. They will ensure that the resolution is properly documented and filed with the Companies Commission of Malaysia (SSM).
5. Submit Application to Strike Off the Company
The next step is to submit an application to the SSM (Suruhanjaya Syarikat Malaysia) to strike off the company’s name from the register. This can be done through the SSM e-Lodgement system.
To be eligible for striking off, your company must meet the following criteria:
• It has not conducted any business for the last three months
• It has no outstanding liabilities
• The company has no assets or liabilities remaining
If your company does not meet the above criteria, you may need to go through the winding-up process instead.
6. Complete Final Documentation and Deregistration
Once the application is approved by the SSM, they will officially remove the company from the register, effectively deregistering it. The company secretary will receive an official notification from SSM, confirming that the company has been closed.
After receiving this confirmation, the final documents should be retained for record-keeping purposes, as they may be required for tax audits or future reference.
Why Engage Professional Secretarial Services, Tax Advisory, and Consultants?
While it is possible to close a SdnBhd company independently, it is highly recommended to engage professionals who specialize in secretarial services, tax advisory, and consulting. Here’s why:
1. Expertise in Legal and Regulatory Requirements: Closing a company involves navigating complex legal procedures. A secretary company in Malaysia will ensure that you comply with all relevant laws, reducing the risk of errors or omissions.
2. Efficient Handling of Tax Affairs: Working with a tax consultant Malaysia or tax advisory Malaysia can save you time and money, ensuring that all your tax obligations are met. They can help you avoid penalties, handle outstanding returns, and provide guidance on the tax implications of liquidating or dissolving your company.
3. Minimize Risks: Closing a company involves various risks, including financial, legal, and reputational. By engaging professionals, you mitigate these risks and ensure the process runs smoothly without any unexpected issues arising.
4. Faster Process: The process of closing a company can be time-consuming, but with the right professionals, the procedure can be expedited, allowing you to focus on other important matters.
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