Companies Act 8,Lawyer,Law Firm,Legal advice,peguam,solicitor,advocate,peguamcara,legal,firm,undang-undang,nasihat,peguambela,attorney,firma guaman,kuala lumpur, selangor, petaling jaya, pj,malaysia of 50

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(2) Notwithstanding subsection (1) the creditors may, if they

think fit, resolve that all or any of the persons so appointed by the

company ought not to be members of the committee of inspection

and, if the creditors so resolve, the persons mentioned in the

resolution shall not, unless the Court otherwise directs, be qualified

to act as members of the committee, and on any application to the

Court under this subsection the Court may, if it thinks fit, appoint

other persons to act as such members in place of the persons

mentioned in the resolution.

(3) Subject to this section and the rules the provisions of

Subdivision (3) of Division 2 relating to the proceedings of and

vacancies in committees of inspection shall apply with respect to

a committee of inspection appointed under this section.

Property and proceedings

263. (1) Any attachment, sequestration, distress or execution put

in force against the estate or effects of the company after the

commencement of a creditors' voluntary winding up shall be void.

(2) After the commencement of the winding up no action or

proceeding shall be proceeded with or commenced against the

company except by leave of the Court and subject to such terms

as the Court imposes.

Subdivision (4)--Provisions applicable to every

Voluntary Winding Up

Distribution of property of company

264. Subject to the provisions of this Act as to preferential payments

the property of a company shall, on its winding up, be applied pari

passu in satisfaction of its liabilities, and subject to that application

shall, unless the articles otherwise provide, be distributed among

the members according to their rights and interests in the company.

Appointment of liquidator

265. If from any cause there is no liquidator acting, the Court

may appoint a liquidator.

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Removal of liquidator

266. The Court may, on cause shown, remove a liquidator and

appoint another liquidator.

Review of liquidator's remuneration

267. (1) Any member or creditor or the liquidator may, at any

time before the dissolution of the company, apply to the Court to

review the amount of the remuneration of the liquidator, and the

decision of the Court shall be final and conclusive.

(2) Notwithstanding subsection 232(3), in the case of a company

which is an insurer, no person, other than Bank Negara Malaysia,

may apply to the Court to review the remuneration of the liquidator

and the Court shall determine the remuneration of the liquidator

on the recommendation of Bank Negara Malaysia.

Act of liquidator valid, etc.

268. (1) The acts of a liquidator shall be valid notwithstanding

any defects that may afterwards be discovered in his appointment

or qualification.

(2) Any conveyance, assignment, transfer, mortgage, charge or

other disposition of a company's property made by a liquidator

shall, notwithstanding any defect or irregularity affecting the validity

of the winding up or the appointment of the liquidator, be valid

in favour of any person taking such property bona fide and for

value and without notice of such defect or irregularity.

(3) Every person making or permitting any disposition of property

to any liquidator shall be protected and indemnified in so doing

notwithstanding any defect or irregularity affecting the validity of

the winding up or the appointment of the liquidator not then known

to such person.

(4) For the purposes of this section a disposition of property

shall be taken as including a payment of money.

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Powers and duties of liquidator

269. (1) The liquidator may--

(a) in the case of a members' voluntary winding up, with the

approval of a special resolution of the company and, in

the case of a creditors' voluntary winding up, with the

approval of the Court or the committee of inspection,

exercise any of the powers given by paragraphs 236(1)

(b), (c), (d) and (e) to a liquidator in a winding up by the

Court;

(b) exercise any of the other powers by this Act given to the

liquidator in a winding up by the Court;

(c) exercise the power of the Court under this Act of settling

a list of contributories, and the list of contributories shall

be prima facie evidence of the liability of the persons

named therein to be contributories;

(d) exercise the power of the Court of making calls; or

(e) summon general meetings of the company for the purpose

of obtaining the sanction of the company by special

resolution in respect of any matter or for any other purpose

he thinks fit.

(2) The liquidator shall pay the debts of the company and adjust

the rights of the contributories among themselves.

(3) When several liquidators are appointed, any power given by

this Act may be exercised by such one or more of them as is

determined at the time of their appointment, or in default of such

determination by any number not less than two.

Power of liquidator to accept shares, etc., as consideration for

sale of property of company

270. (1) Where it is proposed that the whole or part of the business

or property of a company (in this section called the "company")

be transferred or sold to another corporation (in this section called

the "corporation"), the liquidator of the company, may, with the

sanction of a special resolution of the company conferring either

a general authority on the liquidator or an authority in respect of

any particular arrangement, receive in compensation or part

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compensation for the transfer or sale shares, debentures, policies

or other like interests in the corporation for distribution among the

members of the company, or may enter into any other arrangement

whereby the members of the company may, in lieu of receiving

cash, shares, debentures, policies or other like interests or in addition

thereto, participate in the profits of or receive any other benefit

from the corporation, and any such transfer sale or arrangement

shall be binding on the members of the company.

(2) If any member of the company expresses his dissent therefrom

in writing addressed to the liquidator and left at the registered

office of the liquidator within seven days after the passing of the

resolution, he may require the liquidator either to abstain from

carrying the resolution into effect or to purchase his interest at a

price to be determined by agreement or by arbitration in manner

provided by this section.

(3) If the liquidator elects to purchase the member's interest,

the purchase money shall be paid before the company is dissolved

and be raised by the liquidator in such manner as is determined

by special resolution.

(4) A special resolution shall not be invalid for the purposes of

this section by reason that it is passed before or concurrently with

a resolution for voluntary winding up or for appointing liquidators,

but if an order for winding up the company by the Court is made

within a year after the passing of the resolution the resolution shall

not be valid unless sanctioned by the Court.

(5) For the purposes of an arbitration under this section the

Arbitration Act 1952 [Act 93], shall apply as if there were a

submission for reference to two arbitrators, one to be appointed

by each party; and the appointment of an arbitrator may be made

under the hand of the liquidator, of if there is more than one

liquidator then under the hands of any two or more of the liquidators;

and the Court may give any directions necessary for the initiation

and conduct of the arbitration and any such directions shall be

binding on the parties.

(6) In the case of a creditors' voluntary winding up the powers

of the liquidator under this section shall not be exercised except

with the approval of the Court or the committee of inspection.

*NOTE--The Arbitration Act 1952 [Act 93] has been repealed by the Arbitration Act 2005 [Act

646] with effect from 01-03-2006.

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Annual meeting of members and creditors

271. (1) If the winding up continues for more than one year, the

liquidator shall summon a general meeting of the company in the

case of a members' voluntary winding up, and of the company and

the creditors in the case of a creditors' voluntary winding up, at

the end of the first year from the commencement of the winding

up and of each succeeding year or not more than three months

thereafter, and shall lay before the meeting an account of his acts

and dealings and of the conduct of the winding up during the

preceding year.

(2) The liquidator shall cause the notices of the meeting of

creditors to be sent by post to the creditors simultaneously with

the sending of the notices of the meeting of the company.

(3) Every liquidator who fails to comply with this section shall

be guilty of an offence against this Act.

Penalty: *Two thousand ringgit. Default penalty.

Final meeting and dissolution

272. (1) As soon as the affairs of the company are fully wound

up the liquidator shall make up an account showing how the winding

up has been conducted and the property of the company has been

disposed of, and thereupon shall call a general meeting of the

company, or in the case of a creditor's voluntary winding up a

meeting of the company and the creditors, for the purpose of

laying before it the account and giving any explanation thereof.

(2) The meeting shall be called by advertisement published in

a newspaper circulating generally throughout Malaysia, which

advertisement shall specify the time, place and object of the meeting

and shall be published one month at least before the meeting.

(3) The liquidator shall, within seven days after the meeting,

lodge with the Registrar and the Official Receiver a return of the

holding of the meeting and of its date with a copy of the account

attached to such return, and if the return or copy of the account

is not so lodged the liquidator shall be guilty of an offence against

this Act.

Penalty: †One thousand ringgit. Default penalty.

*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].

†

NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986

[Act A657].

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(4) The quorum at a meeting of the company shall be two and

at a meeting of the company and the creditors shall be two members

and two creditors and if a quorum is not present at the meeting,

the liquidator shall in lieu of the return mentioned in subsection

(3) lodge a return (with account attached) that the meeting was

duly summoned and that no quorum was present thereat, and upon

such a return being lodged the provisions of subsection (3) as to

the lodging of the return shall be deemed to have been complied

with.

(5) On the expiration of three months after the lodging of the

return with the Registrar and with the Official Receiver the company

shall be dissolved.

(6) Notwithstanding subsection (5) the Court may, on the

application of the liquidator or of any other person who appears

to the Court to be interested, make an order deferring the date at

which the dissolution of the company is to take effect for such

time as the Court thinks fit.

(7) The person on whose application an order of the Court

under this section is made shall, within fourteen days after the

making of the order, lodge with the Registrar and with the Official

Receiver an office copy of the order, and if he fails so to do he

shall be guilty of an offence against this Act.

Penalty: *One thousand ringgit. Default penalty.

(8) If the liquidator fails to call a meeting as required by this

section he shall be guilty of an offence against this Act.

Penalty: †Two thousand ringgit. Default penalty.

Arrangement when binding on creditors

273. (1) Any arrangement entered into between a company about

to be or in the course of being wound up and its creditors shall,

subject to the right of appeal under this section, be binding on the

company if sanctioned by a special resolution, and on the creditors

if acceded to by three-fourths in value and one-half in number of

the creditors, every creditor for under fifty ringgit being reckoned

in value only.

*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986

[Act A657].

†

NOTE--Previously "five hundred ringgit "see Companies (Amendment) Act 1986 [Act A657].

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(2) A creditor shall be accounted a creditor for value for such

sum as upon an account fairly stated, after allowing the value of

security or liens held by him and the amount of any debt or set-

off owing by him to the debtor, appears to be the balance due to

him.

(3) Any dispute with regard to the value of any such security

or lien or the amount of such debt or set-off may be settled by the

Court on the application of the company, the liquidator, or the

creditor.

(4) Any creditor or contributory may, within three weeks from

the completion of the arrangement, appeal to the Court against it,

and the Court may thereupon as it thinks just amend, vary or

confirm the arrangement.

Application to Court to have questions determined or powers

exercised

274. (1) The liquidator or any contributory or creditor may apply

to the Court--

(a) to determine any question arising in the winding up of

a company; or

(b) to exercise all or any of the powers which the Court

might exercise if the company were being wound up by

the Court.

(2) The Court, if satisfied that the determination of the question

or the exercise of power will be just and beneficial, may accede

wholly or partially to any such application on such terms and

conditions as it thinks fit or may make such other order on the

application as it thinks just.

Costs

275. All proper costs, charges and expenses of and incidental to

the winding up including the remuneration of the liquidator shall

be payable out of the assets of the company in priority to all other

claims.

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Limitation on right to wind up voluntarily

276. Where a petition has been presented to the Court to wind

up a company on the ground that it is unable to pay its debts the

company shall not without the leave of the Court resolve that it

be wound up voluntarily.

DIVISION 4

PROVISIONS APPLICABLE TO EVERY MODE OF

WINDING UP

Subdivision (1)--General

Books to be kept by liquidator

277. (1) Every liquidator shall keep proper books in which he

shall cause to be made entries or minutes of proceedings at meetings

and of such other matters as are prescribed, and any creditor or

contributory may, subject to the control of the Court, personally

or by his agent inspect them.

Control of Court over liquidators

(2) The Court shall take cognizance of the conduct of liquidators,

and if a liquidator does not faithfully perform his duties and observe

the prescribed requirements or the requirements of the Court or if

any complaint is made to the Court by any creditor or contributory

or by the Official Receiver in regard thereto, the Court shall inquire

into the matter and take such action as it thinks fit.

(3) The Registrar or the Official Receiver may report to the

Court any matter which in his opinion is a misfeasance, neglect

or omission on the part of the liquidator and the Court may order

the liquidator to make good any loss which the estate of the

company has sustained thereby and make such other order as it

thinks fit.

(4) The Court may at any time require any liquidator to answer

any inquiry in relation to the winding up and may examine him

or any other person on oath concerning the winding up and may

direct an investigation to be made of the books and vouchers of

the liquidator.

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Delivery of property to liquidator

(5) The Court may require any contributory, trustee, receiver,

banker, agent or officer of the company to pay, deliver, convey,

surrender or transfer to the liquidator or provisional liquidator

forthwith or within such time as the Court directs any money,

property, books and papers in his hands to which the company is

prima facie entitled.

Powers of Official Receiver where no committee of inspection

278. (1) Where a person other than the Official Receiver is the

liquidator and there is no committee of inspection the Official

Receiver may, on the application of the liquidator, do any act or

thing or give any direction or permission which is by this Act

authorized or required to be done or given by the Committee.

(2) Where the Official Receiver is the liquidator and there is no

committee of inspection the Official Receiver may in his discretion

do any act or thing which is by this Act required to be done by,

or subject to any direction or permission given by the Committee.

Appeal against decision of liquidator

279. Any person aggrieved by any act or decision of the liquidator

may apply to the Court which may confirm, reverse or modify the

act or decision complained of and make such order as it thinks just.

Notice of appointment and address of liquidator or provisional

liquidator

280. (1) A liquidator or provisional liquidator shall, within fourteen

days after his appointment, lodge with the Registrar and with the

Official Receiver notice in the prescribed form of his appointment

and of the situation of his office and in the event of any change

in the situation of his office shall, within fourteen days after the

change, lodge with the Registrar and with the Official Receiver

notice in the prescribed form of the change.

(2) Service made by leaving any document at or sending it by

post addressed to the address of the office of the liquidator or

provisional liquidator given in any such notice lodged with the

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Registrar shall be deemed to be good service upon the liquidator

or provisional liquidator and upon the company.

(3) A liquidator or provisional liquidator shall, within fourteen

days after his resignation or removal from office, lodge with the

Registrar and with the Official Receiver notice thereof in the

prescribed form.

(4) If a liquidator or provisional liquidator fails to comply with

this section he shall be guilty of an offence against this Act.

Penalty: *One thousand ringgit. Default penalty.

Liquidator's accounts

281. (1) Every liquidator shall, within one month after the expiration

of the period of six months from the date of his appointment and

of every subsequent period of six months and in any case within

one month after he ceases to act as liquidator and forthwith after

obtaining an order of release, lodge with the Registrar and the

Official Receiver, and in the case of a company which is an insurer,

whether or not its licence under the Insurance Act 1996 is revoked,

Bank Negara Malaysia, in the prescribed form and verified by

statutory declaration an account of his receipts and payments and

a statement of the position in the winding up.

Penalty: *One thousand ringgit. Default penalty.

(2) The Official Receiver may cause the account of any liquidation

to be audited by an approved company auditor, and for the purpose

of the audit the liquidator shall furnish the auditor with such

vouchers and information as he requires, and the auditor may at

any time require the production of and inspect any books or accounts

kept by the liquidator.

(3) A copy of the account or, if audited, a copy of the audited

account shall be kept by the liquidator and the copy shall be open

to the inspection of any creditor or of any person interested at the

office of the liquidator.

(4) The liquidator shall--

(a) give notice that the account has been made up to every

creditor and contributory when next forwarding any report,

notice of meeting, notice of call or dividend; and

*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986

[Act A657].

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(b) in the notice inform creditors and contributories at what

address and between what hours the account may be

inspected.

(5) The costs of an audit under this section shall be fixed by

the Official Receiver and be part of the expenses of winding up.

Liquidator to make good defaults

282. (1) If any liquidator who has made any default in lodging

or making any application, return, account or other document, or

in giving any notice which he is by law required to lodge, make

or give, fails to make good the default within fourteen days after

the service on him of a notice requiring him to do so, the Court

may, on the application of any contributory or creditor of the

company or the Official Receiver, make an order directing the

liquidator to make good the default within such time as is specified

in the order.

(2) Any order made under subsection (1) may provide that all

costs of and incidental to the application shall be borne by the

liquidator.

(3) Nothing in subsection (1) shall prejudice the operation of

any written law imposing penalties on a liquidator in respect of

any such default.

Notification that a company is in liquidation

283. (1) Where a company is being wound up every invoice,

order for goods or business letter issued by or on behalf of the

company or a liquidator of the company or a receiver or manager

of the property of the company, being a document on or in which

the name of the company appears, shall have the words "in

liquidation" added after the name of the company where it first

appears therein.

(2) If default is made in complying with this section the company,

and every officer of the company or liquidator and every receiver

or manager who knowingly and wilfully authorizes or permits the

default shall be guilty of an offence against this Act.

Penalty: *Five hundred ringgit.

*NOTE--Previously "one hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].

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Books of company

284. (1) Where a company is being wound up all books and

papers of the company and of the liquidator that are relevant to

the affairs of the company at or subsequent to the commencement

of the winding up of the company shall, as between the contributories

of the company, be prima facie evidence of the truth of all matters

purporting to be therein recorded.

(2) When a company has been wound up the liquidator shall

retain the books and papers referred to in subsection (1) for a

period of five years from the date of dissolution of the company

and at the expiration of that period may destroy them.

Penalty: *Two thousand ringgit.

(3) Notwithstanding subsection (2), when a company has been

wound up the books and papers referred to in subsection (1) may

be destroyed within a period of five years after the dissolution of

the company--

(a) in the case of a winding up by the Court, in accordance

with the directions of the Court;

(b) in the case of a members' voluntary winding up, as the

company by resolution directs; and

(c) in the case of a creditors' voluntary winding up, as the

committee of inspection, or, if there is no such committee,

as the creditors of the company direct.

(4) No responsibility shall rest on the company or the liquidator

by reason of any such book or paper not being forthcoming to any

person claiming to be interested therein if the book or paper has

been destroyed in accordance with this section.

Investment of surplus funds on general account

285. (1) Whenever the cash balance standing to the credit of any

company in liquidation is in excess of the amount which, in the

opinion of the committee of inspection, or, if there is no committee

of inspection, of the liquidator, is required for the time being to

answer demands in respect of the estate of the company, the liquidator,

if so directed in writing by the committee of inspection, or, if there

is no committee of inspection, the liquidator himself, may, unless

*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].

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the Court on application by any creditor thinks fit to direct otherwise

and so orders, invest the sum or any part thereof in securities

issued by the Government of Malaysia or of any State of Malaysia

or place it on deposit at interest with any bank, and any interest

received in respect thereof shall form part of the assets of the

company.

(2) Whenever any part of the money so invested is, in the

opinion of the committee of inspection, or, if there is no committee

of inspection, of the liquidator, required to answer any demands

in respect of the company's estate, the committee of inspection

may direct, or, if there is no committee of inspection, the liquidator

may arrange for the sale or realization of such part of the said

securities as is necessary.

Unclaimed assets to be paid to receiver of revenue

286. (1) Where a liquidator has in his hands or under his control--

(a) any unclaimed dividend or other moneys which have

remained unclaimed for more than six months from the

date when the dividend or other moneys became payable;

(b) a f t e r making final distribution, any unclaimed or

undistributed moneys arising from the property of the

company,

he shall forthwith pay those moneys to the Official Receiver to be

placed to the credit of the Companies Liquidation Account and

shall be entitled to the prescribed certificate of receipt for the

moneys so paid and that certificate shall be an effectual discharge

to him in respect thereof.

(2) The Court may, at any time on the application of the Official

Receiver, order any liquidator to submit to it an account of any

unclaimed or undistributed funds, dividends or other moneys in

his hands or under his control verified by affidavit and may direct

an audit thereof and may direct him to pay those moneys to the

Official Receiver to be placed to the credit of the Companies

Liquidation Account.

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(3) The interest arising from the investment of the moneys

standing to the credit of the Companies Liquidation Account shall

be paid into the Consolidated Fund.

(4) For the purposes of this section the Court may exercise all

the powers conferred by this Act with respect to the discovery and

realization of the property of the company and the provisions of

this Act with respect thereto shall, with such adaptations as are

prescribed, apply to proceedings under this section.

(5) This section shall not, except as expressly declared in this

Act, deprive any person of any other right or remedy to which he

is entitled against the liquidator or any other person.

(6) If any claimant makes any demand for any money placed

to the credit of the Companies Liquidation Account, the Official

Receiver upon being satisfied that the claimant is the owner of the

money shall authorize payment thereof to be made to him out of

the Account or, if it has been paid into the Consolidated Fund, may

authorize payment of a like amount to be made to him out of

moneys made available by Parliament for the purpose.

(7) Any person dissatisfied with the decision of the Official

Receiver in respect of a claim made in pursuance of subsection (6)

may appeal to the Court which may confirm, disallow or vary the

decision.

(8) Where any unclaimed moneys paid to any claimant are

afterwards claimed by any other person, that other person shall not

be entitled to any payment out of the Account of the Fund, but may

have recourse against the claimant to whom the unclaimed moneys

have been paid.

(9) Any unclaimed moneys paid to the credit of the Companies

Liquidation Account to the extent to which the said moneys have

not been under this section paid out of the Account shall, on the

lapse of six years from the date of the payment of the moneys to

the credit of the Account, be paid into the Consolidated Fund.

Expenses of winding up where assets insufficient

287. (1) Unless expressly directed to do so by the Official Receiver,

a liquidator shall not be liable to incur any expense in relation to

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365

the winding up of a company unless there are sufficient available

assets.

(2) The Official Receiver may, on the application of a creditor

or a contributory, direct a liquidator to incur a particular expense

on condition that the creditor or contributory indemnifies the liquidator

in respect of the recovery of the amount expended and if the

Official Receiver so directs gives such security to secure the amount

of the indemnity as the Official Receiver thinks reasonable.

Resolutions passed at adjourned meetings of creditors and

contributories

288. Subject to subsection 260(9) where a resolution is passed

at an adjourned meeting of any creditors or contributories of a

company, the resolution shall for all purposes be treated as having

been passed on the date on which it was in fact passed and not

on any earlier date.

Meetings to ascertain wishes of creditors or contributories

289. (1) The Court may, as to all matters relating to the winding

up of a company, have regard to the wishes of the creditors or

contributories as proved to it by any sufficient evidence, and may,

if it thinks fit for the purpose of ascertaining those wishes, direct

meetings of the creditors or contributories to be called, held and

conducted in such manner as the Court directs, and may appoint

a person to act as chairman of any such meeting and to report the

result thereof to the Court.

(2) In the case of creditors regard shall be had to the value of

each creditor's debt.

(3) In the case of contributories regard shall be had to the

number of votes conferred on each contributory by this Act or the

articles.

Special commission for receiving evidence

290. (1) The Sessions Court Judges shall be commissioners for

the purpose of taking evidence under this Part, and the Court may

refer the whole or any part of the examination of any witnesses

under this Part to any person hereby appointed commissioner.

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(2) Every commissioner shall, in addition to any powers which

he might lawfully exercise as a Sessions Court Judge, have in the

matter so referred to him the same powers as the Court of summoning

and examining witnesses, of requiring the production or delivery

of documents, of punishing defaults by witnesses and of allowing

costs and expenses to witnesses.

(3) Unless otherwise ordered by the Court the taking of evidence

by commissioners shall be in open court and shall be open to the

public.

(4) The examination so taken shall be returned or reported to

the Court in such manner as the Court directs.

Subdivision (2)--Proof and Ranking of Claims

Proof of debts

291. (1) In every winding up, subject in the case of insolvent

companies to the application in accordance with this Act of the

law relating to bankruptcy, all debts payable on a contingency and

all claims against the company present or future, certain or contingent,

ascertained or sounding only in damages shall be admissible to

proof against the company, a just estimate being made so far as

possible of the value of such debts or claims as are subject to any

contingency or sound only in damages or for some other reason

do not bear a certain value.

(2) Subject to section 292, in the winding up of an insolvent

company the same rules shall prevail and be observed with regard

to the respective rights of secured and unsecured creditors and

debts provable and the valuation of annuities and future and contingent

liabilities as are in force for the time being under the law relating

to bankruptcy in relation to the estates of bankrupt persons, and

all persons who in any such case would be entitled to prove for

and receive dividends out of the assets of the company may come

in under the winding up and make such claims against the company

as they respectively are entitled to by virtue of this section.

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Priorities

292. (1) Subject to this Act, in a winding up there shall be paid

in priority to all other unsecured debts--

(a) firstly, the costs and expenses of the winding up including

the taxed costs of a petitioner payable under section 220,

the remuneration of the liquidator and the costs of any

audit carried out pursuant to section 281;

(b) secondly, all wages or salary (whether or not earned

wholly or in part by way of commission) including any

amount payable by way of allowance or reimbursement

under any contract of employment or award or agreement

regulating conditions of employment, of any employee

not exceeding one thousand five hundred ringgit or such

other amount as may be prescribed from time to time

whether for time or piecework in respect of services

rendered by him to the company within a period of four

months before the commencement of the winding up;

(c) thirdly, all amounts due in respect of worker's compensation

under any written law relating to worker's compensation

accrued before the commencement of the winding up;

(d) fourthly, all remuneration payable to any employee in

respect of vacation leave, or in the case of his death to

any other person in his right, accrued in respect of any

period before the commencement of the winding up;

(e) fifthly, all amounts due in respect of contributions payable

during the twelve months next before the commencement

of the winding up by the company as the employer of any

person under any written law relating to employees

superannuation or provident funds or under any scheme

of superannuation or retirement benefit which is an

approved scheme under the federal law relating to income

tax; and

(f) sixthly, the amount of all federal tax assessed under any

written law before the date of the commencement of the

winding up or assessed at any time before the time fixed

for the proving of debts has expired.

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(2) The debts in each class specified in subsection (1) shall rank

in the order therein specified but as between debts of the same

class shall rank equally between themselves, and shall be paid in

full, unless the property of the company is insufficient to meet

them, in which case they shall abate in equal proportions between

themselves.

(3) Where any payment has been made to any employee of the

company on account of wages, salary or vacation leave out of

money advanced by a person for that purpose, the person by whom

the money was advanced shall, in a winding up, have a right of

priority in respect of the money so advanced and paid, up to the

amount by which the sum in respect of which the employee would

have been entitled to priority in the winding up has been diminished

by reason of the payment, and shall have the same right of priority

in respect of that amount as the employee would have had if the

payment had not been made.

(4) So far as the assets of the company available for payment

of general creditors are insufficient to meet any preferential debts

specified in paragraphs (1)(b), (d) and (e) and any amount payable

in priority by virtue of subsection (3), those debts shall have

priority over the claims of the holders of debentures under any

floating charge created by the company, and shall be paid accordingly

out of any property comprised in or subject to that charge.

(5) Where the company is under a contract of insurance (entered

into before the commencement of the winding up) insured against

liability to third parties, then if any such liability is incurred by

the company (either before or after the commencement of the

winding up) and an amount in respect of that liability is or has

been received by the company or the liquidator from the insurer,

the amount shall, after deducting any expenses of or incidental to

getting in the amount, be paid by the liquidator to the third party

in respect of whom the liability was incurred to the extent necessary

to discharge that liability or any part of that liability remaining

undischarged in priority to all payments in respect of the debts

referred to in subsection (1).

(6) If the liability of the insurer to the company is less than the

liability of the company to the third party nothing in subsection

(5) shall limit the rights of the third party in respect of the balance.

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(7) Subsections (5) and (6) shall have effect notwithstanding

any agreement to the contrary entered into after the commencement

of this Act.

(8) Notwithstanding anything in subsection (1)--

(a) paragraph (c) of that subsection shall not apply in relation

to the winding up of a company in any case where the

company is being wound up voluntarily merely for the

purpose of reconstruction or of amalgamation with another

company and the right to the compensation has on the

reconstruction or amalgamation been preserved to the

person entitled thereto, or where the company has entered

into a contract with an insurer in respect of any liability

under any law relating to workers compensation; and

(b) where a company has given security for the payment or

repayment of any amount to which paragraph (f) of that

subsection relates, that paragraph shall apply only in

relation to the balance of any such amount remaining due

after deducting therefrom the net amount realized from

such security.

(9) Where in any winding up assets have been recovered under

an indemnity for costs of litigation given by certain creditors, or

have been protected or preserved by the payment of moneys or the

giving of indemnity by creditors, or where expenses in relation to

which a creditor has indemnified a liquidator, have been recovered

the Court may make such order as it deems just with respect to

the distribution of those assets and the amount of those expenses

so recovered with a view to giving those creditors an advantage

over others in consideration of the risk run by them in so doing.

Subdivision (3)--Effect on other Transactions

Undue preference

293. (1) Any transfer, mortgage, delivery of goods, payment,

execution or other act relating to property made or done by or

against a company which, had it been made or done by or against

an individual, would in his bankruptcy under the law of bankruptcy

be void or voidable shall, in the event of the company being wound

up, be void or voidable in like manner.

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(2) For the purposes of this section the date which corresponds

with the date of presentation of the bankruptcy petition in the case

of an individual shall be--

(a) in the case of a winding up by the Court--

(i) the date of the presentation of the petition; or

(ii) where before the presentation of the petition a

resolution has been passed by the company for

voluntary winding up the date upon which the

resolution to wind up the company voluntarily, is

passed,

whichever is the earlier; and

(b) in the case of a voluntary winding up the date upon

which the winding up is deemed by this Act to have

commenced.

(3) Any transfer or assignment by a company of all its property

to trustees for the benefit of all its creditors shall be void.

Effect of floating charge

294. A floating charge on the undertaking or property of the

company created within six months of the commencement of the

winding up shall, unless it is proved that the company immediately

after the creation of the charge was solvent, be invalid except to

the amount of any cash paid to the company at the time of or

subsequently to the creation of and in consideration for the charge

together with interest on that amount at the rate of five per centum

per annum.

Liquidator's right to recover in respect of certain sales to or

by company

295. (1) Where any property, business or undertaking has been

acquired by a company for a cash consideration within a period

of two years before the commencement of the winding up of the

company--

(a) from a person who was at the time of the acquisition a

director of the company; or

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(b) from a company of which, at the time of the acquisition,

a person was a director who was also a director of the

first-mentioned company,

the liquidator may recover from the person or company from

which the property, business or undertaking was acquired any

amount by which the cash consideration for the acquisition exceeded

the value of the property, business or undertaking at the time of

its acquisition.

(2) Where any property, business or undertaking has been sold

by a company for a cash consideration within a period of two years

before the commencement of the winding up of the company--

(a) to a person who was at the time of the sale a director of

the company; or

(b) to a company of which at the time of the sale a person

was a director who was also a director of the company

first mentioned in this subsection,

the liquidator may recover from the person or company to which

the property, business or undertaking was sold any amount by

which the value of the property, business or undertaking at the

time of the sale exceeded the cash consideration.

(3) For the purposes of this section the value of the property

business or undertaking includes the value of any goodwill or

profits which might have been made from the business or undertaking

or similar considerations.

(4) In this section "cash consideration" in relation to an acquisition

or sale by a company, means consideration for the acquisition or

sale payable otherwise than by the issue of shares in the company.

Disclaimer of onerous property

296. (1) Where any part of the property of a company consists

of--

(a) any estate or interest in land which is burdened with

onerous covenants;

(b) shares in corporations;

(c) unprofitable contracts; or

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(d) any other property that is unsaleable, or not readily saleable,

by reason of its binding the possessor thereof to the

performance of any onerous act, or to the payment of any

sum of money,

t h e liquidator of the company, notwithstanding that he has

endeavoured to sell or has taken possession of the property or

exercised any act of ownership in relation thereto, may, with the

leave of the Court or the committee of inspection and subject to

this section, by writing signed by him, at any time within twelve

months after the commencement of the winding up or such extended

period as is allowed by the Court, disclaim the property; but where

any such property has not come to the knowledge of the liquidator

within one month after the commencement of the winding up, the

power of disclaiming may be exercised at any time within twelve

months after he has become aware thereof or such extended period

as is allowed by the Court.

(2) The disclaimer shall operate to determine, as from the date

of disclaimer, the rights, interest and liabilities of the company and

the property of the company in or in respect of the property disclaimed,

but shall not, except so far as is necessary for the purpose of

releasing the company and the property of the company from

liability, affect the rights or liabilities of any other person.

(3) The Court or committee before or on granting leave to

disclaim may require such notices to be given to persons interested,

and impose such terms as a condition of granting leave, and make

such other order in the matter as the Court or committee thinks

just.

(4) The liquidator shall not be entitled to disclaim if an application

in writing has been made to him by any person interested in the

property requiring him to decide whether he will or will not disclaim,

and the liquidator has not, within a period of twenty-eight days

after the receipt of the application or such further period as is

allowed by the Court or the committee, given notice to the applicant

that he intends to apply to the Court or the committee for leave

to disclaim, and, in the case of a contract, if the liquidator after

such an application in writing does not within that period or further

period disclaim the contract the liquidator shall be deemed to have

adopted it.

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(5) The Court may, on the application of a person who is, as

against the liquidator, entitled to the benefit or subject to the

burden of a contract made with the company, make an order rescinding

the contract on such terms as to payment by or to either party of

damages for the non-performance of the contract, or otherwise as

the Court thinks just, and any damages payable under the order

to that person may be proved by him as a debt in the winding up.

(6) The Court may, on the application of a person who either

claims any interest in any disclaimed property or is under any

liability not discharged by this Act in respect of any disclaimed

property and on hearing such persons as it thinks fit, make an order

for the vesting of the property in or the delivery of the property

to any person entitled thereto, or to whom it seems just that the

property should be delivered by way of compensation for such

liability as aforesaid, or a trustee for him, and on such terms as

the Court thinks just, and on any such vesting order being made

and an office copy thereof being lodged with the Registrar and

with the Official Receiver and if the order relates to land with the

appropriate authority concerned with the recording or registration

of dealings in that land (as the case requires) the property comprised

therein shall vest accordingly in the person therein named in that

behalf without any further conveyance, transfer or assignment.

(7) Notwithstanding anything in subsection (6), where the property

disclaimed is of a leasehold nature the Court shall not make a

vesting order in favour of any person claiming under the company,

whether as under-lessee or as mortgagee, except upon the terms

of making that person--

(a) subject to the same liabilities and obligations as those to

which the company was subject under the lease in respect

of the property at the commencement of the winding up;

(b) if the Court thinks fit, subject only to the same liabilities

and obligations as if the lease had been assigned to that

person at that date,

and in either event, if the case so requires, as if the lease had

comprised only the property comprised in the vesting order, and

any mortgagee or under-lessee declining to accept a vesting order

upon those terms shall be excluded from all interest in and security

upon the property, and, if there is no person claiming under the

company who is willing to accept an order upon those terms, the

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Court may vest the estate and interest of the company in the

property in any person liable personally or in a representative

character and either alone or jointly with the company to perform

the lessee's covenants in the lease, freed and discharged from all

estates, incumbrances and interest created therein by the company.

(8) Any person injured by the operation of a disclaimer under

this section shall be deemed to be a creditor of the company to

the amount of the injury, and may accordingly prove the amount

as a debt in the winding up.

Interpretation

For the purposes of sections 298 and 299--

297.

"bailiff'" includes any officer charged with the execution of a

writ or other process;

"goods" includes all movable property.

Restriction of rights of creditor as to execution or attachment

298. (1) Where a creditor has issued execution against the goods

or land of a company or has attached any debt due to the company

and the company is subsequently wound up, he shall not be entitled

to retain the benefit of the execution or attachment against the

liquidator unless he has completed the execution or attachment

before the date of the commencement of the winding up, but--

(a) where any creditor has had notice of a meeting having

been called at which a resolution for voluntary winding

up is to be proposed, the date on which the creditor so

had notice shall for the purposes of this section be

substituted for the date of the commencement of the

winding up;

(b) a person who purchases in good faith under a sale by the

bailiff any goods of a company on which an execution

has been levied shall in all cases acquire a good title to

them against the liquidator; and

(c) the rights conferred by this subsection on the liquidator

may be set aside by the Court in favour of the creditor

to such extent and subject to such terms as the Court

thinks fit.

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(2) For the purposes of this section--

(a) an execution against goods is completed by seizure and

sale;

(b) an attachment of a debt is completed by receipt of the

debt; and

(c) an execution against land is completed by sale or, in the

case of an equitable interest, by the appointment of a

receiver.

Duties of bailiff as to goods taken in execution

299. (1) Subject to subsection (3) where any goods of a company

are taken in execution and, before the sale thereof or the completion

of the execution by the receipt or recovery of the full amount of

the levy, notice is served on the bailiff that a provisional liquidator

has been appointed or that a winding up order has been made or

that a resolution for voluntary winding up has been passed, the

bailiff shall, on being so required, deliver the goods and any

money seized or received in part satisfaction of the execution to

the liquidator, but the costs of the execution shall be a first charge

on the goods or moneys so delivered, and the liquidator may sell

the goods, or a sufficient part thereof, for the purpose of satisfying

that charge.

(2) Subject to subsection (3) where under an execution in respect

of a judgement for a sum exceeding one hundred ringgit the goods

of a company are sold or money is paid in order to avoid sale, the

bailiff shall deduct the costs of the execution from the proceeds

of the sale or the money paid and retain the balance for fourteen

days; and if within that time notice is served on him of a petition

for the winding up of the company having been presented or of

a meeting having been called at which there is to be proposed a

resolution for the voluntary winding up and an order is made or

a resolution is passed for the winding up, the bailiff shall pay the

balance to the liquidator who shall be entitled to retain it as against

the execution creditor.

(3) The rights conferred by this section on the liquidator may

be set aside by the Court in favour of the creditor to such extent

and subject to such terms as the Court thinks fit.

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Subdivision (4)--Offences

Offences by officers of companies in liquidation

300. (1) Every person who, being a past or present officer or a

contributory of a company which is being wound up--

(a) does not to the best of his knowledge and belief fully and

truly discover to the liquidator all the property movable

and immovable of the company, and how and to whom

and for what consideration and when the company disposed

of any part thereof, except such part as has been disposed

of in the ordinary way of the business of the company;

(b) does not deliver up to the liquidator, or as he directs--

(i) all the movable and immovable property of the

company in his custody or under his control and

which he is required by law to deliver up; or

(ii) all books and papers in his custody or under his

control belonging to the company and which he

is required by law to deliver up;

(c) within twelve months next before the commencement of

the winding up or at any time thereafter--

(i) has concealed any part of the property of the

company to the value of fifty ringgit or upwards,

or has concealed any debt due to or from the

company;

(ii) has fraudulently removed any part of the property

of the company to the value of fifty ringgit or

upwards;

(iii) has concealed, destroyed, mutilated or falsified,

or has been privy to the concealment, destruction,

mutilation or falsification of, any book or paper

affecting or relating to the property or affairs of

the company;

(iv) has made or has been privy to the making of any

false entry in any book or paper affecting or relating

to the property or affairs of the company;

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(v) has fraudulently parted with, altered or made any

omission in, or has been privy to fraudulent parting

with, altering or making any omission in, any

document affecting or relating to the property or

affairs of the company;

(vi) by any false representation or