Corporate Recovery, Restructuring and Insolvency in Malaysia are guided by the provisions under the following Acts, depending on the scope of the insolvency work:
- Companies Act 2016 (CA)
- Companies (Winding-Up) Rules 1972
Under the previous Companies Act 1965, limited options were available to an insolvent company, namely receivership, winding up or entering into a scheme of arrangement with the creditors. To support better business sustainability, the new CA introduced new Corporate Rescue Mechanisms to help financially distressed companies. The rescue mechanisms aim at rehabilitating financial and business viability rather than winding up the distressed company.
The corporate rescue mechanisms are:
- corporate voluntary arrangement; and
- judicial management.
MIA members possess the requisite skills to provide insolvency advisory services to distressed companies. To be an approved liquidator, an individual has to obtain approval from the MOF under Section 433 of the CA 2016.