The Minister of Domestic Trade and Consumer Affairs issued
the Prescription of Amount of Indebtedness of Company
under Paragraph 466(1)(a) (Gazette Notification No.
4159/2021) stating that the amount of
indebtedness for the purposes of section 466(1)(a) of the Companies
Act 2016 shall be an amount exceeding RM50,000 with effect from 1
April 2021.
This means that a creditor may only commence winding-up proceedings
against a debtor company for "inability to pay
debts" under section 466(1)(a) if the debtor
company fails to satisfy a debt exceeding RM50,000, or to secure or
compound the said sum with the creditor, within 21 days after a
notice of demand has been served upon the debtor company at its
registered office.
The minimum debt threshold of an amount exceeding RM50,000 is
identical to the threshold under the previous prescription order
issued by the Minister under Gazette Notification No. 21841 of
2020 which expired on 31 March 2021. Unlike
the previous prescription order, the current prescription order
does not have a sunset date and will
therefore remain in effect until it is amended or revoked by a
subsequent order.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.