The remit of Working Group D (Insolvency and Corporate Securities) of the Corporate Law Reform Committee (CLRC) is to consider the current law and practice relevant to corporate insolvency. The objective of the review of this area of the law is for the creation of a corporate insolvency framework:
This Consultation Paper focuses on the reform and restatement of the liquidation scheme. The laws and procedures on winding up are necessary parts in the operations of a company since the law and procedure will enable proper closure of a company which may not be able to continue its business. The review conducted by Working Group D of the CLRC in relation to the liquidation process starts on the premise that the law and procedures for company liquidation are well-known and familiar to practitioners. Thus, the gist of this structure will be retained. However, in line with simplification of the law, the review focuses on the following areas:
(a) Reform and restatement of the law on company liquidation – There are specific recommendations made in relation to the following:
(b) Reform and restatement of the liquidation process
(c) Reform and restatement on the law and procedure in relation to company charges.
In conducting the review, the CLRC is aware of views that there should be an Omnibus Insolvency Act which would combine both corporate and individual insolvency and operate as a separate legislation from the company legislation. However, even in jurisdictions that adopt this approach, there is still no total fusion between corporate and individual insolvency. The CLRC is of the view that the review exercise should focus on clarification and uniformity of the law and procedure on corporate insolvency in general and company liquidation in particular. Unity of the law on corporate and individual insolvency into a single legislation should not be the overriding concern. One of the means identified by the CLRC on achieving clarification and uniformity of the law is by reducing confusion in the application of the existing framework especially in relation to unnecessary and extensive cross-references to the Bankruptcy Act 1967.
We hope to receive views and comments on the recommendations stated in this Consultation Paper. Please reply to Puan Nor Azimah Abdul Aziz at the Companies Commission of Malaysia (CCM) by 14 June 2006.
Download consultation document “Company Liquidation – Reforms and Restatement of the Law” (.pdf)
Download “Responses on Company Liquidation – Reforms and Restatement of the Law”(.pdf)