Many SME bosses believe one thing.
“Sdn Bhd means limited liability.”

The company owes money, that is the company’s problem.
The company closes down, gets wound up, and the director should be safe already.

Sorry.
When it comes to EPF, it may not be that simple.

In a Malaysian Federal Court case, Mohd Abdul Karim Abdullah & Ors v Lembaga Kumpulan Wang Simpanan Pekerja, a company failed to pay EPF contributions from September 2021 to July 2022.

Later, the company went into liquidation.
After that, the company was wound up.

The directors may have thought.
“The company is already gone. EPF should go after the company or the liquidator.”

But EPF did not sue the company.
EPF sued the directors directly.

Of course, the directors disagreed.
Their argument sounded quite reasonable.
“The company is the one owing EPF.”
“Why was the company not sued together, but the directors were made responsible?”

The High Court did not accept it.
The Court of Appeal did not accept it.
The Federal Court also did not allow them to continue with the appeal.

The reason was simple.
Section 46 of the EPF Act 1991 provides that when a company fails to pay EPF, the persons who were directors during the period when the contributions were due may be held liable together with the company.

And the liability is jointly and severally.

In simple SME language.
EPF can go after the company.
EPF can go after all the directors.
EPF may even go after only one director and demand the full amount from that person.

At that point, you may bring out the most famous company law sentence.
“Sdn Bhd is a separate legal entity.”

But that may not save you.
This is because the law places the liability directly on the director.

More importantly.
Resigning later does not mean your earlier liability also resigns.
The company being wound up later does not mean the EPF debt disappears together with the company.

The real question is not.
“Am I still a director now?”
The real question is.
“Was I a director during the months when the company failed to pay EPF?”

The boss thinks it is only the company’s cash flow problem.
Later, the boss discovers that it has become the director’s personal liability problem.
Sdn Bhd can protect a director from being automatically liable for normal company debts.

But the corporate veil is not bulletproof glass.
When EPF is involved, the law may open a door through that glass.

Then it tells you.
“Director, please come out and take personal responsibility.”

By then, you may no longer be dealing only with the company’s debt.
You may be dealing with a risk to your own assets.

Read the full content in our blog
https://www.ktp.com.my/blog/epf-sue-director/10june2026