Advanced taxation 2011 (liquidation)
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Advanced taxation 2011 (liquidation)

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Liquidation in Malaysia

Liquidation in Malaysia

Presented by Undergraduate (Faculty of Business and Accountancy) in University of Malaya

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Advanced taxation 2011 (liquidation) Advanced taxation 2011 (liquidation) Presentation Transcript

  • Faculty of Business and Accountancy
    CTEA 3432 Advanced Taxation
    Title: LIQUIDATION
    Prepared by:
    Chan Yee Fei
    CEA 070025
    16 February 2011
  • LIQUIDATION
    Prepared by CHAN YEE FEI
  • Compulsory Winding-Up (2007 – Nov 2010)
    Source: Malaysia Department of Insolvency
    Prepared by CHAN YEE FEI
  • Compulsory Winding-Up (Nov 2010)
    * Total 334 days (From 1 Jan until 30 Nov 2010)
    1536 registered cases
    (Until Nov 2010)
    4.5988* companies per day
    Prepared by CHAN YEE FEI
  • OUTLINE
    5. Charges from Liquidation
    Definition and related law
    6. Defenced from Liquidation
    3. Date of commencement
    4. Process of Liquidation
    2. Type of Liquidation
    7. Effects of Liquidation on Directors
    Prepared by CHAN YEE FEI
  • CHAPTER 1:
    Definition and related law
    Prepared by CHAN YEE FEI
  • CHAPTER 1
    Definition of LIQUIDATION
    A method whereby the corporate structure of the company is dismantled and its property administered for the benefit of the creditors and members.
    Law governing LIQUIDATION exercise
    Companies Winding-Up Rules 1972
    Companies Act 1965
    Bankruptcy Act 1967
    Sales Tax Act 1972
    Service Tax Act 1975
    Prepared by CHAN YEE FEI
  • CHAPTER 2:
    Type of Liquidation
    Prepared by CHAN YEE FEI
  • CHAPTER 2
    Prepared by CHAN YEE FEI
  • CHAPTER 2
    Prepared by CHAN YEE FEI
  • CHAPTER 2
    Section 218(1) of CA 1965
    Insolvent company which is triggered by a court order on the application.
    Example of applications: ___________________________________
    It required the petitioner.
    Section 218 of CA 1965
    Solvent company which is triggered by a court order on the application.
    Example of situations: ______________________________________
    Prepared by CHAN YEE FEI
  • CHAPTER 2
    Prepared by CHAN YEE FEI
  • CHAPTER 2
    Members’ Voluntary Liduidation (MVL)
    Section 257 of CA 1965
    Liquidation of a solvent company.
    Director’s opinion.
    Company is able to pay debts within 12 months after the commencement.
    Creditors’ Voluntary Liduidation (CVL)
    Section 255 of CA 1965
    Liquidation of an insolvent company.
    Directors make declaration.
    Company do what?
    Meet their creditors
    Lodge to Registrar and Official Receiver (OR)
    Prepared by CHAN YEE FEI
  • CHAPTER 3:
    Date of commencement
    Prepared by CHAN YEE FEI
  • CHAPTER 3
    CWU
    Section 219 (2) of CA 1965
    Filling the petition
    VWU
    Section 255 (6) of CA 1965
    Lodgement of declaration;
    Passing the resolution.
    Prepared by CHAN YEE FEI
  • CHAPTER 4:
    Process of Liquidation
    Prepared by CHAN YEE FEI
  • CHAPTER 4
    Prepared by CHAN YEE FEI
  • CHAPTER 4
    Prepared by CHAN YEE FEI
  • CHAPTER 4
    Prepared by CHAN YEE FEI
  • CHAPTER 5:
    Charges on Liquidation
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    Pay me back my money!
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    Section 218 (1)(e) of CA 1965
    Section 218 (2) of CA 1965
    Malayan Plant (Pte) Ltd v Moscow Narodny Bank Ltd
    Court may make an order to winding-up a company when it is unable to pay its debts.
    Substantial wealth which cannot be realized immediately.
    Debt ≥ RM500.
    Period ≥ 3 weeks (21days) of the service of the notice
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    How to justify an authorized agent?
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    Section 218 of CA 1965
    Sri Hartamas Development SdnBhdv MBF Finance Bhd
    Notice of demand leave it at the registered office under his hand/hand of his agent lawfully authorized.
    Seal of the company is not required.
    Solicitor who signed the notice issued was duly appointed agent with authority.
    Section 350 of CA 1965
    WengWah Construction Co SdnBhdvYikFoong Development SdnBhd
    Actual physical delivery by postman was an effective service.
    Service can be done by registered post.
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    Old address? New address?
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    r 194C(WU)R 1972
    Valid
    It was not served to the current registered address of debtor company is due to the negligence of Registrar of Companies in not updating the record.
    Old address cannot be intended as a shield company
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    Principal? Interest? Costs?
    Prepared by CHAN YEE FEI
  • CHAPTER 5
    SungeiRinchingSdnBhdv Sri KeluargaSdnBhd
    Valid
    Sum and interest could be easily be ascertained
    Prepared by CHAN YEE FEI
  • CHAPTER 6:
    Defenced from Liquidation
    Prepared by CHAN YEE FEI
  • CHAPTER 6
    Lim TokChiow & Anor v Dian Tong Credit & Development SdnBhd
    Invalid
    It is merely in pending during the court, affidavit must be made in some course
    Cannot be verify where there are no existent at the time it was sworn
    Prepared by CHAN YEE FEI
  • CHAPTER 6
    r 24 of the Rules
    Re NKM Holdings SdnBhd
    Invalid
    Total 4 times in 2 local newspaper and 1 time at government gazette before 7 days from the date of hearing
    Purpose: to inform other creditord may have a stake in the affairs of the company
    Prepared by CHAN YEE FEI
  • CHAPTER 6
    r 194(1)of the Rules
    Court may cure any formal defects or irregularities unless there is substantial injustice caused which cannot be remedied by an order of court.
    E.g:
    Hong Leong Finance Bhd v Delta Derive (M) SdnBhd
    Ann Joo Metal SdnBhd v Pembenaan MY ChahayaSdnBhd
    Prepared by CHAN YEE FEI
  • CHAPTER 7:
    Effects of Liquidation on Directors
    Prepared by CHAN YEE FEI
  • CHAPTER 7
    Section 256(2)
    Section 256(1)
    Section 226(3)
    The power of the directors
    The company
    Any transfer of shares
    Legal action by directors against company
    Prepared by CHAN YEE FEI
  • End
    End of Presentation
    Prepared by CHAN YEE FEI