A client once asked me, “Bro, can I strike off my Sdn Bhd? Got RM100,000 in the bank but got losses.”

The company was dormant, no liabilities, but still had RM100,000 in the bank. He thought strike off would be simple and cheap.

But under Section 550 of the Companies Act 2016, a company can only be struck off if it has no assets and no liabilities.

Then he asked, “Why not just declare dividend to clear the balance?”
Under Section 131, dividends can only be paid out of profits, and directors must ensure the company remains solvent after payment.

Declaring dividends when there’s no profit breaches the law and may expose directors to personal liability.

The correct closure method is Members’ Voluntary Winding Up (MVWU).
MVWU applies when the company is solvent … able to pay all debts within 12 months. The liquidator takes control, settles liabilities, obtains tax clearance, and distributes the remaining bank balance to shareholders as capital, not dividend.

If your company still has cash, don’t shortcut the process. MVWU is the right and legal way to close.

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