Two Ways to Dissolve A Labuan Company
According to Labuan Companies Act 1990, there are two ways to dissolve a Labuan Company as follows:
A. Voluntary Winding Up Procedure (Under Section 131A of the Act)
Labuan Company can apply to Labuan FSA for the Declaration of Dissolution Notice accompany with the following documents :
1. A statutory declaration by the director or member
2. A copy of the advertisements one in local newspaper and one in international financial newspaper
3. A written notice from Inland Revenue Board that is has no objection to the Authority making a declaration of dissolution of the company
4. The Declaration of Dissolution intent notice were sent to all directors and all members
5. Fee of RM8,000 payable to Labuan FSA.
If there is no objection received from any objector of the above , Labuan FSA often approve the dissolution application within 1-2 week after 30 days notice ends. The Declaration of Dissolution Notice publication issued by Labuan FSA is valid for six (6) years.
For debts and liability not discharged, Labuan FSA or any creditor or person to be interested may apply to Court within the validity date of 6 years to revoke the dissolution. Any surplus of the Labuan Company is to be distributed subject to the Memorandum and Articles of Associations among its shareholders according to their respective rights and interest.
All fees including annual fee owed by the Labuan company to Labuan FSA is to be paid prior of the approval of the Declaration of Dissolution Notice and for company wound up prior to its first anniversary, the fee will be proportionately to the number of months, weeks and days of the Labuan company was in existence for that year. Our professional fee to assist the process will depends on the task involved, varies from case to case basis.
B. Default Annual Fee Payment with Labuan FSA (Under Section 151 of the Act)
All Labuan companies required to pay Labuan FSA annual fee within one month before the date of anniversary of the date of incorporation. The company who fail to pay Labuan FSA for its annual fee within 6 months after the due date, the penalty will be additional of 50% of the annual fee.
If the Labuan company further fail to pay the annual fee and 50% of the penalty within one month from the date of expiration of six (6) months given, Labuan FSA will send a written notice to Company Secretary that the name of the Labuan Company shall be struck off from the Labuan Authority’s register or if the annual fee not paid within one (1) month of the date of notice. Labuan Company may appeal to Labuan FSA to extend the period or nullify the strike off procedure.
After the name of the Labuan Company has been struck off from the register, the Labuan company:
a) shall not carry on any business, legal proceedings or any way deal with the assets of the company, act in any respect to the affairs of the company
b) any legal proceeding which commenced prior to the date of striking off, the Labuan can continue to carry out
c) shall remains liable for all claims, debts, liabilities and obligations and the striking off shall not affect the liability of any of its members, directors, officers or agents within 3 years
d) may apply to Labuan FSA for the Labuan company to be registered afresh.
The company which been struck off for continuously for a period of 3 years, the Labuan company is deemed to have fully dissolved. Once the company is struck off, the directors can apply to Inland Revenue to close the corporate tax file and all other tax files. During the strike off process, Labuan Company is liable to comply with yearly tax filing with Labuan Inland Revenue Board even when the company is dormant or inactive the final strike off notice is act.
For all Labuan companies intended to be strike off or dissolution, it is advisable to comply the following:
1. Closure of corporate tax file (LE) with IRB corporate division (Labuan Company) and Employer Return (E) with local IRB
2. Closure of personal tax file with IRB Personal Tax division
3. Immigration visa to terminate
For complete info on Labuan company strike off process, please refer here!
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