Close Down Business in Malaysia: A Step-by-Step Guide for Entrepreneurs

Every Beginning has an Ending

It’s always sad to see the business that you’ve put your soul and heart into it come to an end.

However, every start has an ending. This might be a difficult and emotional decision, but it is also crucial to understand the steps you will need to take to close down your business successfully.

If you’re unsure about the process, don’t worry as we will be providing a step-by-step guide on how to close down your business or company successfully in Malaysia.

Why Close Down a Business?

There are a huge amount of reasons why a businessman in Malaysia would want to choose to close down their business. These reasons may include financial difficulties, unforeseen changes in the industry to even personal reasons such as retirement and health issues. Regardless of the reasons, it is important to know the options you have when you want to close down your business or company.

Closing Down a Sole Proprietorship or Partnership Business

Closing down a business in Malaysia, whether it is a sole proprietorship or partnership, can be a straightforward process. You will just need to fill in this Form C and submit it to the SSM.

However, it is essential to follow the correct steps to ensure everything is done properly. Below is a step-by-step guide to help you navigate the process of closing down your business in Malaysia.

1. Notify the registrar of companies (SSM)

The first step in closing down your business in Malaysia is to notify the Registrar of Companies (SSM) that your business is ceasing operations. If you are the sole proprietor or one of the partners, you must inform the SSM within 30 days of the cessation of your business activities.

In the unfortunate event that the business owner passes away, it is the responsibility of the next-of-kin or an appointed representative to notify the SSM. In this case, the notice must be submitted within four months from the date of the owner’s death.

2. Complete and sign form C

Once you have notified the SSM, you will need to complete Form C – the Notice of Termination for Registered Business. This form must be signed by the business owner or all partners (in the case of a partnership). It is important to ensure that all information is accurate to avoid any delays or issues during the submission process.

3. Submit the application

After completing Form C, you must submit it to the SSM. You can submit the form via the SSM’s official website i.e. ezBiz Online, which is convenient and efficient.

4. Attach the required documents

In addition to Form C, several supporting documents must be submitted with your application. These include:

• A Latest Certificate of Registration / Certificate of Renewal of Registration of Business (Form D/E).
• If applicable, a death certificate or its certified copy should be provided if the business owner or partner has passed away.
• If the court ordered the termination, you must also provide the original document or a copy of the court order.
• In case of bankruptcy of the owner, relevant documents (original documents or certified copies) must be provided.

Closing Down a Sdn Bhd Company

Unlike closing down a business, closing down a Sdn Bhd company is slightly more complicated.

There are mainly two types of options to close down your company in Malaysia:

1. Strike Off / De-registration

Strike-off or de-registration is a company being removed from the registrar if the company is believed to not be carrying out any activities of business operation. This situation normally happens when a company is considered dormant and has no further intentions to do business.

2. Winding Up

Winding up is basically the process of dissolving a company in Malaysia. Winding up includes the termination of a company’s business operation and selling off all the assets to pay off the creditors according to the priorities. 

Compulsory Winding Up

Compulsory Voluntary or sometimes known as winding up by court. This option is typically used when a company is unable to pay its debts as they fall due. It is considered a lengthy and expensive process that can take up to several months to complete. 

Voluntary Winding Up

Voluntary Winding up is basically the process of dissolving a company initiated by either:

• Member’s Voluntary Winding Up (MVWU)
• Creditor’s Voluntary Winding Up (CVWU)

In a members' voluntary winding up, the directors will be tasked to make a declaration of solvency. The directors will be required to declare that the company will have sufficient ability to pay its debts fully within 12 months after the commencement of winding up. 

On the other hand, a creditor’s voluntary winding up happens when a company cannot meet its liabilities and will have to conduct a meeting with its creditors to come out with a solution or proposal for a voluntary winding up of the company.

Steps to Closing Down a Company in Malaysia

Closing down a business or company in Malaysia involves several key steps, including:

1. Board Resolution

The first step is to hold a board meeting and pass a resolution to close down the business or company. The resolution should specify the reason for the closure and appoint a liquidator if necessary.

2. Informing Creditors and Other Stakeholders

Once the board resolution is passed, the company must inform its creditors and other stakeholders of the closure. This includes customers, suppliers, employees, and any government agencies that the company is registered with.

3. Publication of Notice

The company must publish a notice of the closure in a local newspaper and the Government Gazette to inform the public.

4. Appointment of Liquidator

If the company is insolvent or unable to pay its debts, a liquidator must be appointed to manage the closure process. The liquidator will be responsible for selling the company's assets and distributing the proceeds to its creditors.

5. Settling Debts and Liabilities

The company must settle all outstanding debts and liabilities before it can be officially closed down.

6. Filing of Documents

The company must file the necessary documents with the Companies Commission of Malaysia (SSM) to inform them of the closure.

Every Ending has a New Beginning

Every business’s journey will come to an end, eventually. While it may be sad to walk separate ways from something that you have poured your heart and soul into, it is important to remember that every ending marks a new beginning. 

By following the steps outlined in this guide, you can ensure that the closure is conducted in a legal and professional manner. 

Ultimately, closing down your business or company is an opportunity to reflect and learn from your journey and experiences. And with everything you’ve learnt along the way, it will pave the way for new opportunities and adventures in the future.