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18 Cards in this Set
- Front
- Back
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process of corporate voluntary arrangement |
S.396 -directors present proposal to creditors -creditors nominate or appoint an insolvency practitioner or independent nominee -nominee propose CVA and makes a statement to directors whether proposed CVA is likely to be approved by court and if company has enough funds to carry on business during proposed moratorium |
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moratorium under CVA |
S.398 28 days moratorium applies automatically upon filing docs to court. can be extended to 60 days. |
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process of judicial management |
S.404- application to court if company or creditors consider that company is or will be unable to pay its debts and there is reasonable probability of preserving the business S.406- six months, can be extended to twelve months S.408- notice of JM order shall be advertised in widely circulated newspapers in Malaysia |
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process of scheme of arrangement |
S.365 company petitions the court to order a creditors' meeting for SOA and must get 75% approval from creditors. company needs to apply to court for moratorium of 3 months extendable to 9 months |
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may a company wind up voluntarily? |
S.439 company may be wound up voluntarily upon expiry of fixed time or completion of event AND passing an ordmary resolution (51%) or if company passes a special resolution (75%). to do this, company must be solvent and shall lodge a printed copy of resolution to registrar and give notice in newspaper |
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declaration of solvency |
S.443 director shall make declaration of solvency that the company can pay debts within 12 months of winding up and must be made within 5 weeks before special resolution is passed |
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removal of liquidator |
S.445(3) company needs to pass a special resolution in the general meeting and send a special notice (28 days) to creditors and liquidators unless creditor or liquidator applies to court that the liquidator may not be removed |
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what is creditors voluntary winding up? |
S.447 takes place it liquidator is of the opinion that the company will not be able to pay debts within 12 months of winding up. S.449 company must convene meeting of creditors & SH. notice must be sent by post at least seven days before and advertise in newspaper |
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define compulsory winding up |
S.464 wound up upon order to court by company, creditor, liquidator. court shall not make a winding up order unless court is satisfied that voluntary WU cannot be continued |
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grounds for compulsory winding up |
S.465 company has passed special resolution (75%) default of lodging statutory declaration does not commence business within 1 year from incorporation company has no member company is unable to pay its debts director acted for their own interests fixed term or event has expired court is of opinion that it is just and equitable to wind up company's financial services act license has expired company in breach of said license company being used for unlawful purpose upon minister's declaration |
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define inable to pay debts |
S.466 company fails to pay a debt after being served a statutory demand of amount prescribed by minister within 21 days, or if court is satisfied that company is unable to pay debts after taking into account contingent liabilities |
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disposition of asset during winding up |
S.472 disposition other than liquidator after petition is made is void unless court orders otherwise |
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legal proceedings during winding up |
S.470 cannot bring any legal proceedings against company after petition |
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FLC within 6 months of winding up |
S.529 void unless it is proven that at the time of creation, company is solvent |
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carrying on business during winding up |
S.442 not permitted unless if liquidator is in opinion that it is beneficial |
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disqualification of liquidator |
S.433 not an approved liquidator indebted > RM25,000 an officer or related person bankrupt convicted for fraud/ dishonesty punishable for > 3 months |
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duties of liquidator |
fiduciary duty realize assets to apply proceedings to creditor & SH take possession and protect assets maintain proper records report breaches to court |
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recovery of assets |
S.435 unpaid shares S.528 voidable preferences from creditor made within 6 months of winding up S.529 invalid FLC S.530 excess profits on sales to company if seller is a connected person and it took place within 2 years of WU |
