Threshold for Filing Winding Up Petition Under S. 466(1)(a) Increased to More Than RM50,000 Until 31 March 2021

The amount of indebtedness for the purposes of “inability to pay debts” under section 466(1)(a) of the Companies Act 2016 has been increased to an amount exceeding RM50,000 from 1 January 2021 until 31 March 2021.1
This means that during the aforesaid period, 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The previous threshold of more than RM10,000 has been revoked with effect from 1 January 2021.2
Alert prepared by Rachel Ten (Senior Associate) of Skrine