Closing or dissolving a Limited Liability Partnership (LLP) in Malaysia requires careful planning and adherence to legal requirements. Whether due to business restructuring, financial difficulties, or a strategic decision, business owners must follow the correct procedure to ensure a smooth dissolution.
Failing to properly close an LLP can result in penalties, liabilities, and compliance issues. This guide provides a step-by-step process for LLP closure, including legal requirements, compliance obligations, and penalties for non-compliance.
At Amaze Advisory, we specialize in corporate compliance and can assist you in winding up your LLP efficiently and legally.
1. Reasons for Closing an LLP in Malaysia
There are several reasons why business owners may decide to close an LLP:
- Business is no longer viable or financially sustainable.
- Partners decide to cease operations or move to a different business structure.
- Failure to comply with statutory requirements, leading to deregistration by authorities.
- Inactivity—LLPs that are no longer conducting business may voluntarily close.
Understanding the reason for closure helps determine the most appropriate method for dissolving an LLP.
2. Methods of Closing an LLP in Malaysia
There are two primary ways to close an LLP:
(A) Voluntary Winding Up
This applies when partners voluntarily decide to close the LLP.
Key Requirements:
- The LLP must have no outstanding debts or liabilities.
- All partners must agree to the closure.
- All tax filings, SST, and accounting records must be up to date.
(B) Strike-Off by the Registrar
This occurs when the Registrar of LLPs (Companies Commission of Malaysia – SSM) deems that the LLP is no longer operating and fails to comply with regulatory requirements.
Common Reasons for Strike-Off:
- Failure to lodge annual declarations with SSM.
- Failure to maintain a registered business address.
- Inactive or non-operational business.
Avoid legal complications by ensuring compliance before applying for voluntary winding-up. Amaze Advisory can help you assess your LLP status and take the necessary steps for closure.
3. Step-by-Step Guide to Closing an LLP in Malaysia
Step 1: Ensure All Debts and Liabilities Are Cleared
Before initiating closure, the LLP must settle all outstanding debts, including:
- Tax liabilities (corporate tax, SST, withholding tax).
- Employee contributions (EPF, SOCSO, EIS).
- Loans, supplier payments, and other business obligations.
Need help clearing your financial records? Amaze Advisory can assist with final tax submissions and compliance matters.
Step 2: Obtain Partner Consent for Closure
- All partners must unanimously agree to dissolve the LLP.
- A resolution must be signed by all partners confirming the decision to wind up.
Step 3: Submit the Notice of Cessation to SSM
To officially close an LLP, submit a Notice of Cessation (LLP Closure Form) to Suruhanjaya Syarikat Malaysia (SSM).
Documents Required:
- LLP Closure Form – Notice of cessation of LLP.
- Partners’ declaration confirming no outstanding liabilities.
- Supporting documents (e.g., proof of tax clearance, settlement of debts).
Step 4: Notify the Inland Revenue Board (LHDN)
- File the final tax returns and obtain tax clearance from LHDN.
- If applicable, deregister from Sales and Service Tax (SST) and other tax obligations.
Step 5: Close the LLP Bank Accounts
- Withdraw any remaining funds.
- Officially close all business bank accounts.
- Inform creditors, suppliers, and stakeholders about the closure.
Amaze Advisory can assist in preparing the necessary documents and notifications to ensure a smooth winding-up process.
4. Penalties for Failure to Close an LLP Properly
Failure to properly wind up an LLP can result in:
- Fines of up to RM50,000 for non-compliance with SSM regulations.
- Legal action against all partners and compliance officer if there are outstanding liabilities.
- Business restrictions, preventing partners from registering new companies.
Avoid unnecessary fines! Amaze Advisory ensures that your LLP closure meets all legal and regulatory requirements.
5. How Amaze Advisory Can Help
- Advisory on legal and financial matters related to LLP closure.
- Preparation and submission of Closure Form to SSM.
- Final tax clearance and submission of required documents to LDHN.
- Notifying banks, creditors, and regulatory bodies on LLP cessation.
- Ensuring full compliance to avoid penalties and liabilities.
Get Started with Amaze Advisory Today!
Phone: +6013-284 7678 / +6013-323 7678
Website: www.amazeadvisory.com
