ACT 125

COMPANIES ACT 1965 (REVISED - 1973)

PART X - WINDING UP

DIVISION 3 - VOLUNTARY WINDING UP

Subdivision (2) - Provisions applicable only to Members' Voluntary Winding up

Section 259. Duty of liquidator to call creditors' meeting in case of insolvency.

(1) If the liquidator is at any time of the opinion that the company will not be able to pay or provide for the payment of its debts in full within the period stated in the declaration made under section 257, he shall forthwith summon a meeting of the creditors and lay before the meeting a statement of the assets and liabilities of the company and the notice summoning the meeting shall draw the attention of the creditors to the right conferred upon them by subsection (2). (2) The creditors may, at the meeting summoned under subsection (1), appoint some other person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company instead of the liquidator appointed by the company. (3) If the creditors appoint some other person under subsection (2) the winding up shall thereafter proceed as if the winding up were a creditor's voluntary winding up. (4) Within seven days after a meeting has been held pursuant to subsection (1) the liquidator or if some other person has been appointed by the creditors to be the liquidator the person so appointed shall lodge with the Registrar and with the Official Receiver a notice in the prescribed form and if default is made in complying with this subsection the liquidator or the person so appointed (as the case requires) shall be guilty of an offence against this Act. Penalty: One thousand ringgit. Default penalty. Alternative provisions as to annual meetings in case of insolvency (5) Where the liquidator has convened a meeting under subsection (1) and the creditors do not appoint a liquidator instead of the liquidator appointed by the company the winding up shall thereafter proceed as if the winding up were a creditors' voluntary winding up; but the liquidator shall not be required to summon an annual meeting of creditors at the end of the first year from the commencement of the winding up if the meeting held under subsection (1) was held less than three months before the end of that year.