Appointment of liquidator
Qualification of liquidator
A person cannot be appointed as liquidator unless he/she has been given his/her prior written consent to act as one (Section 10(4)). A person cannot be a liquidator of a company if he/she is:
(a) not an approved liquidator
(b) indebted to the company for more than RM2,500
(c) an officer of the company, a partner, employer or employee of an officer of the company, a partner or employer of an employee of an officer of the company. A person is deemed to be an officer of a company if he/she is an officer of a related corporation and has within the preceding 24 months been an officer or promoter of the related corporations (Section 10(3))
(d) a bankrupt and has assigned his/her estate for the benefit of his/her creditors or makes an arrangement with his/her creditors under any law relating to bankruptcy
(e) convicted of an offence involving fraud or dishonesty punishable on conviction for three months or more.
Clauses (a) and (c) do not apply to a members’ voluntary winding up. Clauses (a) and (c) are also inapplicable to a creditors’ voluntary winding up, if by a resolution carried by a majority of the creditors at a meeting of which seven days’ notice has
been given, it has been determined that the clauses do not apply (Section 10(2)).
Appointment by the Court
In the winding up of a company by the court, the liquidator is appointed by the court. The liquidator must be either the Official Receiver or an approved company auditor (Section 8(3)). If a person other than the Official Receiver is an appointed liquidator, that person must, before acting as liquidator, inform the Registrar of his/her appointment and give security in the prescribed manner to the satisfaction of the Official Receiver. He/she must also give the Official Receiver information and access to the books and documents which are necessary to enable that officer to perform his/her duties (Section 228).
Appointment by the general meeting
In a members’ voluntary winding up the liquidator is appointed by the company in a general meeting. More than one liquidator may be appointed for the purpose of winding up the company’s affairs and distributing its assets (Section 258(1)). If any vacancy occurs in the office of the liquidator, for example by death or resignation, the company may in the general meeting fill the vacancy (Section 258(4)).
A liquidator in a voluntary winding up is not an officer of the court. On the voluntary liquidation of a listed company, no commission or fee shall be paid to a liquidator unless it has been approved by shareholders and the shareholders shall be notified of such amount at least seven days prior to the meeting to discuss this commission or fee (para 7.37 Bursa Malaysia Securities Listing Requirements).
Appointment by creditors
In a creditors’ voluntary winding up the creditors may, at the creditors’ meeting, nominate a person to be the liquidator. If the nominations relate to different persons, the person nominated by the creditors shall be the liquidator. If no person is nominated by the creditors, the person nominated by the company becomes the liquidator.
But, the court may, where different persons are nominated, appoint the person nominated by the company to act as the liquidator or jointly with the person nominated by the creditors.
The court may appoint some other person to be the liquidator instead of the person appointed by the creditors (Section 266).
Notification of appointment
The liquidator must within 14 days after his/her appointment deliver to the Registrar and the Official Receiver a notice of his/her appointment (Section 208).
Effect of appointment of liquidator on powers of directors
Upon the appointment of a liquidator in a members’ voluntary winding up, all powers of the directors cease except if the liquidator or company approves their continuance in a general meeting (Section 258(2)).
Upon the appointment of a liquidator in a creditors’ voluntary winding up, all powers of the directors cease except if the committee of inspection or, if there be no such committee, the creditors approve their continuance (Section 261(4)).
There are no similar statutory provisions for the directors’ powers in a winding up by order of the court. However, the rule is that once there has been an appointment by the court of a liquidator or provisional liquidator, the powers of the directors