228 Summary of Unit 4

You have learnt about the various parties who are involved in preparing the prospectus.

In addition, the application and process of reconstruction and amalgamations which is regulated by the Companies Act 1965 were discussed. The relevant Section 176 and Section 178 were also explained.

The process of winding up of a company was explained. Its proceedings and effects to note which relate to any convincing, transfer, mortgage, delivery of goods in relation to property of the company have been also advised. The relevant Section 304 was also explained.

A company may no longer carry on with any business or has ceased business and is no longer in operation is a defunct company. A Registrar has power under Section 308 of the Companies Act 1965 to strike the defunct companies off the register. Application Requirements for Striking Off in Practice Note No 6 of 2010 can be accessed on www.ssm.com.my. A debenture document gives the right to appoint not merely a receiver but a receiver/manager who may continue the business of the company while he/she seeks to get in the amount due. There is a distinction between a receiver per se, and a receiver who is also a manager. A company must notify appointment of a receiver to the Registrar of Companies in Form 59 and submit to the receiver a Statement of Affairs as per Form 61 duly filled and signed by one or more of its directors and secretary at least within 14 days of the appointment of the receiver or any longer period that the court has allowed. The Statement of Affairs would include the date of the receiver’s appointment, the particulars of the company’s assets, debts and liabilities, the names and addresses of all the company’s creditors, the securities held by them respectively and the dates when the securities were respectively given, and the Statement must be verified by affidavit (Section 189(2)) of one or more persons who were at the date of the receiver’s appointment, directors of the company and by the person who was at that date the secretary of the company.

The receiver’s remuneration, fees and disbursements are set out in the document appointing the receiver and usually it is to be paid by the person appointing the receiver out of the net proceeds of sale of the company’s assets by the receiver. Liquidation does not in itself terminate a receivership. A liquidator may be appointed as a receiver. The power to remove a receiver is generally given to the person who has the power of appointment by the instrument. A receiver whose office is terminated must notify the Registrar within seven days per Form 60.

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