Wednesday, 28 February 2024

3:00 pm – 4:00 pm Delays and Damages: LAD Insights and Updates for Developers

About this talk

As a developer, avoiding delays in the delivery of vacant possession and minimising the payment of liquidated damages or liquidated ascertained damages (LAD) to purchasers is critical to profitability and sustainability. Join us in this webinar as our speakers explain how the period for completion is calculated, and recent developments in case law on the delivery of vacant possession. This knowledge is essential for developers seeking to mitigate risks and ensure compliance.

This webinar addresses the critical aspects of timely vacant possession delivery, outlines legal exposures from delays, and reviews recent changes in LAD calculations under Malaysian law. Learn from case studies and understand the current legal environment to better navigate LAD implications for your projects. Essential for developers seeking to mitigate risks and ensure compliance.

The talk will be delivered over video conference using You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Effect of deposit payments on the date of completion
  • Validity of an extension of time given by the Controller of Housing
  • Delivery of vacant possession and the connection of utilities
  • Notice of vacant possession and the delivery of keys


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Past Seminars

Private aircraft deals can be complex and are subject to both civil aviation regulations and commercial contract law. That is why we have invited two well-versed professionals to chat: Cassandra Nicole Thomazios, who practises aviation law, and Nikesh Chahal, an experienced aviation consultant. They are here to share their knowledge and insights, making the world of aircraft sales a bit clearer for all of us.

Nikesh Chahal is the legal director at Chahal Aviation, a boutique consulting firm, that operates within the business aviation industry across Asia and international markets. Known for its specialized knowledge in aircraft transactions, financing, and maintenance engineering, Chahal Aviation offers a range of management and consulting services in both business and commercial aviation. Focusing on the intricate aspects of aircraft value and industry dynamics, Chahal Aviation plays a significant role in advising and guiding stakeholders through each step of the transaction process. The firm is recognized for its commitment to building strong, trust-based relationships with clients, emphasizing a deep understanding of the aviation industry’s evolving landscape.

Cassandra Nicole Thomazios is a partner at the law firm of MahWengKwai & Associates. In addition to her practice in aviation law, Cassandra heads the firm’s Corporate and M&A team. She primarily advises on corporate and commercial matters ranging from private limited companies, public listed companies to multinational companies and has been largely involved in corporate regulatory advice, drafting corporate documents, project agreements including advising and negotiating on M&A transactions. Cassandra has advised on and led several legal due diligence exercises in both corporate and aviation matters including the drafting of sale and purchase agreements.

Q: What are the initial steps both buyers and sellers should consider in a private aircraft transaction?

Nikesh Chahal: Before diving into a transaction, both buyers and sellers should conduct thorough research.

Buyers should identify their specific needs to determine the type of aircraft they require, including aircraft size and the number of passengers it intends to carry, its range based on its base, and performance specifications. It’s also essential to determine a budget, which can be narrowed down from the above specific needs identified. In addition, buyers will need to see whether this can be paid with cash or if financing is needed.

Sellers, on the other hand, should gather all relevant aircraft documentation, including maintenance records, logbooks, and any warranties. Establishing clear communication and setting expectations early on can pave the way for a smooth transaction process.

Q: What legal considerations are paramount at the outset of a private aircraft transaction?

Cassandra Nicole Thomazios: From the outset, ensuring that the aircraft’s title is clear and free from any liens or encumbrances is essential. Buyers should consider drafting a Letter of Intent (LOI) to outline preliminary terms and expectations. It is also prudent to be aware of any jurisdictional considerations, taxes, or duties that might apply, especially in cross-border transactions.

Engaging in proper due diligence can prevent potential legal complications down the road as well. A legal, technical, mechanical and financial due diligence should be carried out before purchasing or leasing an aircraft.

Legal due diligence encompasses the evaluation of an aircraft’s compliance with regulations established by the Civil Aviation Authority of Malaysia (CAAM) and the Malaysian Aviation Commission (MAVCOM). CAAM is responsible for regulating safety, maintenance, security, and enforcement, while MAVCOM oversees economic and commercial aspects of civil aviation in Malaysia. Certificates such as the Air Operating Certificate (AOC) from CAAM and Air Services License (ASL) or Air Services Permit (ASP) from MAVCOM are crucial regulatory compliance documents examined during this process. The identification of potential liabilities is also a key facet of legal due diligence.

Technical and mechanical due diligence involves a comprehensive assessment of an aircraft’s maintenance logbooks, airworthiness, and related technical aspects. Financial due diligence encompasses reviewing the aircraft’s financial history, including any outstanding loans or debts that might impose unforeseen financial liabilities for the purchaser.

It is crucial to compile and meticulously review all essential documents before proceeding to subsequent stages of the transaction to prevent potential issues that may arise further down the line. This precautionary approach aims to avert complications and ensure a smoother transactional experience.

Q: How should a prospective buyer assess the condition and value of a pre-owned private aircraft?

Nikesh Chahal: A buyer should always start with a visual inspection of the aircraft, which is usually done after the signing of the Letter of Intent (LOI). This inspection should review the aircraft’s maintenance history, current condition, damage history (if any), main base of operations and ensure its compliance with aviation standards. Also, cross-referencing the aircraft’s specifications, age, and market trends can provide a clearer picture of its value.

Thereafter, the buyer should proceed with a comprehensive pre-purchase inspection conducted by reputable professionals, such as from a Maintenance, Repair and Overhaul (MRO) company, which will determine any damage history, major repairs and modifications, worn parts, corrosion or any other discrepancies.

Q: What are the potential legal pitfalls during the assessment and valuation stage?

Cassandra Nicole Thomazios: During this stage, incomplete or inaccurate documentation can be a significant pitfall. Incomplete and inaccurate documentation may occur if title searches overlook crucial information about the aircraft’s ownership history or if the maintenance logbook of an aircraft is incomplete.

Overlooking potential encumbrances or liens can result in financial and legal complications. Additionally, any discrepancies between the aircraft’s physical condition and its records can potentially lead to legal disputes. The maintenance logbook’s significance lies in its consistency despite changes in ownership, so if it is discovered to be incomplete during the assessment stage, it significantly impacts the valuation of the aircraft purchase price, which relies heavily on these factors. Thus, ensuring clarity and transparency in the aircraft’s history and documentation is crucial.

Furthermore, there could be instances of non-compliance with regulations or occurrences of misrepresentation and fraud. Neglecting to adhere to CAAM regulations during the assessment phase may lead to complications during the transfer of ownership or registration procedures. Moreover, the provision of false or misleading information by the seller during this phase could potentially trigger legal issues and contractual disputes in the later stages of the transaction process.

Q: Could you elucidate the key considerations for financing and insurance in private aircraft transactions?

Nikesh Chahal: For financing, buyers should consider interest rates, loan terms, and the lender’s reputation, as well as the type of financing that is offered, such as an operational or finance lease. Lenders typically require a thorough inspection and valuation of the aircraft. Lenders will also look at the party that will be managing the aircraft, with a reputable manager giving more comfort to the financier.

When it comes to insurance, it is crucial to understand the coverage specifics, including liability limits, hull coverage, third-party liability, and any geographical restrictions. It is beneficial to work with specialized aviation insurance brokers to navigate these intricacies. In addition, buyers will have to look at considerations of insurance if there is an intention to charter the aircraft after the acquisition.

Q: How do legal regulations impact financing and insurance in these transactions?

Cassandra Nicole Thomazios: Legal regulations often dictate the terms and availability of financing. For instance, some jurisdictions have specific laws regarding the age or type of aircraft that can be financed. In Malaysia, there are no specific laws or regulations that explicitly restrict financing based on the age or type of aircraft. However, financial institutions and lenders may establish their own internal policies and criteria regarding the type of aircraft they are willing to finance.

While CAAM focuses on aviation safety rather than financing, its regulations indirectly impact the eligibility of aircraft for financing. Aircraft that meet CAAM’s airworthiness standards and are properly maintained are likely to be more attractive for financing purposes due to their perceived lower risk and higher residual value.

On the insurance front, regulatory compliance, such as licensing or adhering to airworthiness standards, can influence insurance premiums and coverage eligibility. Non-compliance can lead to higher costs or even policy denials. Besides that, insurance brokers would generally require all information regarding the purchased or leased aircraft as well before issuing an insurance quotation prepared by an underwriter.

For example, if the aircraft is purchased for commercial use, approval from MAVCOM and CAAM are required as well as certification of licences for insurance application purposes. However, for aircraft purchased or leased for private use, these specific approvals and certification of licences are not requisite in the insurance process.

Q: Can you highlight the essential elements to include in a sales or leasing contract for private aircraft?

Cassandra Nicole Thomazios: A robust contract should include a clear identification of the parties involved, a detailed description of the aircraft, the agreed-upon price, and payment terms. Provisions regarding inspection, acceptance, and delivery should be outlined, along with any warranties or representations made about the aircraft’s condition. Dispute resolution mechanisms and governing law clauses can also be crucial components of these contracts.

An essential element to include in a sale and purchase or leasing agreement for a private aircraft is a Condition Precedent clause. A Condition Precedent clause may specify compliance with all regulatory requirements and to obtain any necessary permits/licences before the transfer of ownership. Besides that, Condition Precedents may also include conditions related to specific deadlines or milestones for the purchaser to adhere to. If the Condition Precedent is not met within the specified timeframe, the agreement might become null and void. This means the parties are released from their obligations under that particular agreement. Overall, Condition Precedent clauses are used to ensure that both parties are protected by clearly outlining the conditions that must be met for the agreement to move forward.

A force majeure clause may also be essential. The force majeure clause addresses unforeseen circumstances or events beyond the control of the parties. This clause typically exempts one or both parties from fulfilling their contractual obligations when events occur such as natural disasters, acts of terrorism, war, governmental actions, or if a pandemic occurs. Indemnification and Remedies are also essential clauses detailing the remedies available to both parties in case of breaches. Indemnification clauses protect parties against losses due to specific occurrences.

Depending on the nature of the transaction, additional clauses tailored to specific circumstances might be necessary to ensure a comprehensive and enforceable agreement.

Q: What is the role of an aviation consultant in ensuring a smooth and legally compliant transaction?

Nikesh Chahal: An aviation consultant bridges the gap between the technical and commercial aspects of an aircraft transaction. We work on a client’s behalf to ensure that the aircraft meets all technical standards, advise on fair market value, and assist with inspections and evaluations. Our role is to provide expert advice on all aspects of the private aircraft acquisition, connecting reputable sellers with buyers and ensuring buyers make informed decisions so that transactions proceed without hitches. Our strong relationships with MRO’s in conducting pre-purchase inspections and subsequent maintenance also allows us to provide the buyer the best options available throughout the entire process of acquiring an aircraft.

Q: How can legal and aviation consulting expertise collaborate to resolve challenges in private aircraft transactions?

Cassandra Nicole Thomazios: From a legal standpoint, our role is to ensure that every transaction adheres to the relevant regulatory and contractual standards. By collaborating with aviation consultants, we gain invaluable insights into the nuanced intricacies of various aircraft models, their maintenance histories, airworthiness assessments, operational intricacies, and compliance specifics. This in turn helps us in drafting precise contracts, ensuring compliance, and addressing potential legal challenges proactively. This collaboration essentially allows us to offer comprehensive legal solutions that are informed by the intricate details of the aviation industry.

Nikesh Chahal: On the aviation front, our expertise centres around understanding the aircraft’s operational, maintenance, and market aspects. Partnering with legal experts ensures that our technical insights are translated into robust contractual terms, safeguarding both buyers and sellers. Essentially, our collaboration with legal professionals ensures that technical evaluations and assessments are grounded within a solid legal framework, making transactions smoother and more secure for all parties involved.

Wrapping up our chat, it is clear that when it comes to buying or selling private aircraft, having both legal and aviation know-how is key. Both Cassandra Nicole Thomazios and Nikesh Chahal have shown how their expertise comes together to guide a successful deal.

If you are thinking about stepping into the aircraft market, having experts like them by your side is a smart move. A big thank you to our guests for their valuable insights!


Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Wednesday, 21 February 2024

3:00 pm – 4:00 pm Navigating the Path from Unofficial Adoptions to Legal Adoptions

About this talk

Many well-intended parents have adopted children through unofficial or informal means, sometimes with birth certificates which refer to them as the birth parents. The initial years often go by without issue, but questions and problems arise when it is time to apply for a Malaysian Identity Card or to renew a passport as a teenager. Join our speakers to understand what difficulties might arise from unofficial adoptions, how to preempt or deal with these issues as they arise, and their impact on the citizenship of the child. Parents who are thinking about adopting a child will also benefit from understanding the legal adoption process.

The talk will be delivered over video conference using You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • The Problem With Unofficial Adoptions
  • Investigations By Government Officials
  • Options and Requirements For Legal Adoptions
  • Malaysian Citizenship For Adopted Children


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Past Seminars

In Malaysia’s Budget 2024, the government has introduced the proposed capital gains tax (CGT), which will be imposed on gains or profits derived from the disposal of unlisted shares or capital assets. The Finance (No. 2) Act 2023 was gazetted on 29 December 2023 and is effective from 1 January 2024. However, the Income Tax (Exemption) (No. 7) Order 2023 (“Exemption Order”) exempts companies, limited liability partnerships, co-operative societies, or trust bodies (“Chargeable Persons”) from capital gains tax on any gains or profits derived from the disposal of shares of a company incorporated in Malaysia not listed on the stock exchange that was made on or after 1 January 2024 to 29 February 2024. Individuals are not subject to capital gains tax for the disposal of unlisted shares or capital assets.

In this article, we will discuss the scope and applicability of capital gains tax, the exemptions under the Exemption Order, and the effect of capital gains tax on Real Property Gains Tax with respect to real property companies.

Capital Gains Tax and the Exemption Order

Beginning 1 January 2024, capital gains tax is imposed on all gains or profits received by a Chargeable Person derived from the following:

(a) Disposal of unlisted shares in companies incorporated in Malaysia;

(b) Disposal of shares of a controlled company incorporated outside Malaysia that owns real property situated in Malaysia or shares of another controlled company situated in Malaysia; and

(c) Disposal of capital assets situated outside Malaysia but gains or profits derived from such disposal is received in Malaysia.

However, the Government of Malaysia gazetted the Exemption Order on 29 December 2023, which provides Chargeable Persons with an exemption from incurring capital gains tax on the gains or profits deriving from the disposal of unlisted shares of a company incorporated in Malaysia made on or after 1 January to 29 February 2024. The Exemption Order was intended to provide Chargeable Persons with a grace period to make the necessary adjustments and preparations for the implementation of capital gains tax. Thus, the effective date of capital gains tax technically falls on 1 March 2024.

However, it must be noted that the Exemption Order does not apply to gains or profits considered as business income under Section 4(a) of the Income Tax Act 1967. Also, exemptions from capital gains tax may apply to internal group restructurings, initial public offerings approved by Bursa Malaysia, and venture capital investments subject to certain conditions, as announced during Budget 2024.

On 16 January 2024, it was announced by the Government of Malaysia that unit trusts will be exempted from capital gains tax and taxes on foreign-sourced income, with the exemption on foreign-sourced income being effective from 1 January 2024 until 31 December 2026, whilst the exemption on capital gains tax is effective from 1 January 2024 until 31 December 2028.

Date of Disposal

The date of disposal of unlisted shares or capital assets is subject to two factors: (1) whether there is a written agreement for the disposal of the unlisted shares or capital assets; and (2) whether the disposal or acquisition of such unlisted shares or capital assets requires any regulatory approval.

CGT Tax Rate

A Chargeable Person must provide details of the disposal of unlisted shares or capital assets and make payment of the applicable capital gains tax on the gains or profits derived from such disposal within 60 days from the date of disposal of the unlisted shares or capital asset. The capital gains tax rates are crucial elements to all Chargeable Persons, which are as follows:

In the event a Chargeable Person incurs an adjusted loss from disposing of unlisted shares or capital assets, the adjusted loss can be carried forward as a deduction against the Chargeable Person’s subsequent disposal of unlisted shares or capital assets for a period of ten consecutive years of assessment. Any residual amount at the end of this period will no longer be eligible for deductions.

Effect of Capital Gains Tax on Real Property Gains Tax

Before the introduction of capital gains tax in Malaysia, the disposal of real property or shares in a real property company generally attracted Real Property Gains Tax (RPGT). A real property company (RPC) can be determined as a controlled company that owns property or shares in another real property company, or both, and the defined value of its property or shares in another real property company, or both, is not less than 75% of the value of its total tangible assets.

The coming into force of capital gains tax has resulted in its replacement of real property gains tax with respect to the disposal of shares in a real property company by Chargeable Persons only. Meanwhile, gains or profits derived from the disposal of real property by Chargeable Persons continue to be subject to real property gains tax unless such gains or profits are treated as a revenue receipt, for example, disposals of real property by property developers, which would then be subject to income tax.

For reference, the current real property gains tax rates in Malaysia are provided below:

Please visit our article on Real Property Gains Tax to get a general overview and understanding of real property gains tax in Malaysia.


With the imposition of capital gains tax in Malaysia, the element of capital gains tax will be an added factor to be considered when parties strategize for and engage in negotiations and transactions with respect to acquiring and disposing of unlisted shares and capital assets. As the country begins its navigation through the implementation of capital gains tax, it is important for all businesses, entrepreneurs and investors to understand capital gains tax and its future developments.

If you would like to seek legal advice on strategising or structuring your disposal of unlisted shares or capital assets in light of capital gains tax having come into force, please reach out to us, and we will be pleased to assist you with your enquiry.

By Tommy Wong, Vinson Cheng and Sarah San


Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

In the dynamic employment landscape in Malaysia, facilitating and ensuring a positive and productive work environment is crucial for the success of any organisation. Employment law in Malaysia is mainly governed and regulated by the Employment Act 1955. Organisations generally implement standard operating procedures and other internal policies to ensure compliance with the various provisions of the Employment Act 1955. However, these can all be integrated into a single document, the Employee Handbook. Although there is no legal requirement for an organisation to adopt an Employee Handbook, it can serve as a valuable mechanism to communicate and implement the organisation’s expectations, policies and procedures whilst at the same time avoiding any ambiguity about supplementary employment terms and conditions that may not be expressly contained in employment contracts.

What is an Employee Handbook?

An Employee Handbook serves as a reference guide for the employer and employees. It outlines the rights and responsibilities of the employer and employees, the policies and procedures implemented by the organisation and the overall culture of the work environment. An Employee Handbook is usually prepared comprehensively and provides clarity on several aspects of supplementary employment terms and the division of roles within the organisation. Organisations that have an Employee Handbook in place typically require all employees to read and understand the contents of the Employee Handbook as part of its onboarding or training process to align the employees’ expectations with the organisation’s mission and objectives.

The contents that an Employee Handbook covers vary from organisation to organisation. Nevertheless, the following are some crucial points for an organisation to consider when preparing an Employee Handbook:

1.  About the Organisation

Employees should know and be familiar with the organisation’s inception, corporate structure, mission and objectives. It is good practice for employees to be aware of the significant milestones achieved by the organisation.

2.  Employment with the Organisation

The Employee Handbook should state the general terms of employment for each division of personnel, including roles and responsibilities, advancements, transfers, compensation and reimbursements, training opportunities, work hours and overtime. It is also important that the Employee Handbook sets out the rights of its employees.

3.  Procedures

The standard operating procedures of an organisation provide the methods by which the organisation executes an action. This serves as a reference for employers, employees and selected committees to observe and adhere to the implemented procedures for various matters, such as recruitment and hiring, onboarding, performance management, complaints and grievances, and termination of employment.

4.  Policies

The Employee Handbook should include all policies implemented and effected by the organisation. These policies provide employees with the necessary information on various aspects of employment within the organisation. Such policies may include a privacy policy, anti-bribery and corruption policy, anti-money laundering policy, whistleblowing policy, discrimination and harassment policy, disciplinary policy and employee disability policy.

5.  Code of Conduct

An employee code of conduct is essentially a set of guidelines and principles that outline the ethical standards and professional conduct expected from the organisation’s employees whilst maintaining and safeguarding the organisation’s values. A code of conduct will outline elements such as professionalism, ethical standards, integrity, diversity, office romance or relationships and compliance.

Benefits of an Employee Handbook

The adoption of an Employee Handbook can contribute in various ways to a positive work environment that is more effective, organised and transparent. There are various benefits to an Employee Handbook, some of which are as follows:

1.  Efficient Onboarding

An Employee Handbook contributes to an efficient onboarding process for incoming employees, with incoming employees enjoying a consistent onboarding experience. If employees fail to observe the expected standards and policies, they cannot give the excuse that they were not aware of them, as the expected standards and policies were pointed out to them during onboarding.

2.  Centralised and Standardised Information

An Employee Handbook is a centralised source of information that is standardised across the board. It also serves as a centralised source of communication between management and employees. All employees must be accountable for reading, understanding, and adhering to the Employee Handbook.

3.  Empowerment and Transparency

Employees are empowered with standardised and transparent information that is provided to them by their employers. Furthermore, if the Employee Handbook outlines training and career advancement and progression, the employees will be equipped with all necessary information to make informed decisions for their respective careers in the organisation.

4.  Legal Compliance and Mitigation

As a centralised source of information that comprises policies and standards, an Employee Handbook contributes to the organisation complying with the labour laws in Malaysia and outlining employees’ statutory rights, obligations and benefits. Such contributions can reduce the risk of potential legal issues or disputes, be it an issue of non-compliance or a dispute between the organisation and an employee.

5.  Management and Retention

An Employee Handbook ensures consistency in standards and policies, allowing the organisation’s management more time to address specific individual concerns that the Employee Handbook could not address. Effectively managing employees and addressing their concerns can contribute to employee satisfaction, resulting in higher employee retention.


The benefits of adopting an Employee Handbook extend far beyond legal compliance. The move to adopt an Employee Handbook can be an organisation’s strategy to achieve various objectives, such as employee retention and efficient overall management of employees. If prepared comprehensively, an Employee Handbook is valuable for any organisation and can significantly contribute to a positive and sustainable work environment. Although organisations don’t need to have an Employee Handbook under the laws of Malaysia, organisations are encouraged to prepare an Employee Handbook to safeguard their interests as well as the interests of their employees. This can ultimately lead to sustainable growth and success of the organisation.

If you would like to explore the strategic move of adopting an Employee Handbook or to gain a better understanding of the benefits and dynamics of an Employee Handbook, we invite you to reach out to our Employment and Industrial Relations Team. We are committed to assisting your organisation in achieving its objectives and growing its business continuously and successfully.

By Tommy Wong


Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Deciding to close down a business can be as significant as starting one. Closing down a company in Malaysia involves navigating a complex legal landscape, a task that is more challenging than starting a company. Whether due to a strategic pivot, financial considerations, or the natural conclusion of a successful venture, understanding the available choices and implications of closing a business is crucial for company directors and shareholders.

This article provides an overview of key options for shuttering a company, including members’ voluntary winding up, creditors’ winding up, and striking off a company. While each option carries distinct legal considerations, this article offers a starting point for understanding these processes. However, given the complexities involved, engaging professional legal advice is crucial to ensure compliance and strategic decision-making. As you consider the future of your company, we are here to provide the expertise and support needed for this significant transition.

Dissolution of a Company

A company may be dissolved by either the Registrar of the Companies Commission of Malaysia (“CCM”) or by its stakeholders, including its directors, shareholders, creditors or liquidators. Common reasons for dissolving or closing down a company include:

  • No business operations or the business has come to a halt, and the company remains dormant;
  • The company has no assets or liabilities;
  • The company is no longer profitable; or
  • The company owes outstanding debts to creditors.

In Malaysia, the Companies Act 2016 provides two general ways to dissolve a company: (i) by striking the company off from the CCM’s register; or (ii) by winding up the company.

Striking Off from the CCM’s register

Striking off a company is a fast, straightforward, and cost-effective method for dissolving a company. The guidelines for striking off a company have been succinctly addressed in our earlier article titled “Striking off of a company under section 549(a) and 550 of the Companies Act 2016” which can be found here.

Winding Up

The next method to dissolve a company is through winding up. In Malaysia, the winding up process of a company is governed by the Companies Act 2016 and the Companies (Winding-Up) Rules 1972, which involves the collection of a company’s assets to pay off its debts. After winding up, the company will be dissolved and cease to exist.

Under the Companies Act 2016, there are two methods by which a company may be wound up. The first method is by way of compulsory winding up, and the second method is by way of voluntary winding up. The main differentiating factor between the two winding up processes lies in whether the Court’s involvement is necessary.

The two winding up methods will be addressed below:

1. Compulsory Winding Up

A compulsory winding up occurs when the Court issues an order to wind up the company following the presentation of a petition in Court. According to Section 464 of the Companies Act 2016, the petitioner filing such an application can be the company, its creditors, the contributories, liquidator or the official receiver, or the Registrar of Companies.

Upon the petitioner obtaining a Court Order to wind up the company, the Court may appoint a liquidator to oversee the winding up of the company. If no liquidator is appointed, the Official Receiver will serve as the liquidator. The liquidator or official receiver will then assume control of the company’s operations and general affairs before the company can be dissolved.

2. Voluntary Winding Up

In voluntary winding up, the decision to wind up the company is made internally by its members or creditors, and a Court order is not required. Under the Companies Act 2016, there are two types of voluntary winding up, i.e. the members’ voluntary winding up and the creditors’ voluntary winding up. Both types of voluntary winding up involve the appointment of a liquidator to oversee the winding up process, but do not require the same level involvement as in a compulsory winding up.

Members’ Voluntary Winding Up

To opt for a members’ voluntary winding up, the company must be solvent. The commencement date of this process is the date the members pass a resolution to initiate the winding up of the company. To confirm the solvency of the company, the directors may issue a written declaration stating that they have made an inquiry into the company’s affairs and have formed the opinion that it will be capable of settling its debts for the next twelve months following the start of the winding up. Any director making a declaration without reasonable grounds for the opinion that the company can meet its debts commits an offence.

The company will then nominate one or more liquidators for the purpose of winding up the company’s affairs and the distribution of its assets. If the appointed liquidator is of the view that the company will not be able to settle its debts in full within the period specified in the directors’ written declaration, the liquidator will call a meeting of creditors. During this meeting, the creditors may appoint the liquidator or another person to take on the role. If the liquidator initiates and convenes a creditors’ meeting, the winding up process will proceed as if it were a creditors’ voluntary winding up.

Creditors’ Voluntary Winding Up

If a creditors’ voluntary winding up is initiated, the company must arrange for a meeting of its creditors to be convened on the same day or the following day on which the resolution for voluntary winding up is proposed. The notices of the meeting of creditors should be sent by post to the creditors concurrently with the notices of the meeting of the company proposing the voluntary winding up.

The meeting of creditors should be scheduled at a time and place convenient to the majority in value of the creditors. During the meeting, the creditors can appoint either one of their own or a director in attendance to preside over the meeting as a chairperson. The chairperson will determine whether the meeting has been held at a time and place convenient to the majority in value of the creditors. If the meeting is not considered convenient to the majority creditors, it will lapse, and the company must promptly convene another meeting. If the meeting is deemed fit to proceed, the company’s representative director, along with the company’s secretary, will then provide the creditors with information about the company’s current affairs.

At the creditors’ meeting, the company should nominate a person to be a liquidator, and the creditors may also nominate a person for the role. If the nominations from the company and creditors differ, the person nominated by the creditors will be appointed as the liquidator. In cases where the creditors do not nominate anyone, the person nominated by the company will be the liquidator. The appointed liquidator will then proceed with the winding up of the company’s affairs and the distribution of its assets.

Final Meeting Post Voluntary Winding Up

Once the company’s affairs are fully wound up, the liquidator is required to prepare an account detailing how the winding up process has been conducted and the disposition of the company’s property. Following this, the liquidator may convene a final meeting of the company’s members, or in the case of a creditors’ voluntary winding up, a final meeting of both members and creditors. The account prepared by the liquidator shall serve the purpose of providing explanations during the final meeting.

Following the final meeting’s conclusion, the liquidator is required to submit to the Registrar of Companies and the Official Receiver a return of the holding of the meeting, along with a copy of the liquidator’s account attached to the return. After a period of three months from the date of lodging the returns with the Registrar of Companies and Official Receiver, the company will be officially dissolved.


Closing down a company in Malaysia requires careful consideration of legal, financial, and strategic factors. This article highlights the options: members’ voluntary winding up, creditors’ winding up, and striking off, each suited to different business scenarios. Striking off is suitable for dormant companies, while winding up addresses more complex situations with creditors and assets.

Governed by the Companies Act 2016, the dissolution process demands strict adherence to legal requirements. For business owners and directors, it is crucial to approach this process with thoroughness to safeguard personal and professional interests. Considering the complexities, professional legal advice is essential. Our legal team is prepared to assist you through this critical phase, ensuring a compliant and efficient winding up process.

By Sebastian Liew and Aaron Liew


Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Wednesday, 31 January 2024

3:00 pm – 4:00 pm Enforcing Oral Agreements in Courts: Proving Your Case and Defending Your Rights

About this talk

Contrary to common belief, oral agreements are legally binding and enforceable in court. While proving the existence and terms of an oral agreement may be more challenging than that of a written agreement, it is certainly possible with oral testimony and documentary evidence. Join our online talk as we examine the legal position of oral agreements in Malaysia: what is required for a binding contract and how to prove an oral agreement.

The talk will be delivered over video conference using You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Elements of a Binding Contract
  • Evidence to Prove an Oral Agreement
  • Case Studies
  • Practical Tips


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Past Seminars

Wednesday, 10 January 2024

3:00 pm – 4:00 pm Understanding Stamp Duty on Property Transactions

About this talk

“Stamp Duty” – a term often heard, costs you money, but is not always understood. Is it the buyer or the seller that pays stamp duty? Why are some first-time buyers exempt from stamp duty while others are not? Are there stamp duty implications when gifting property to your children? Join our online talk to understand when stamp duty is imposed, how they are calculated, and when stamp duty exemptions apply.

The talk will be delivered over video conference using You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • What is Stamp Duty?
  • Calculating Stamp Duty
  • Stamp Duty on Property Investments and Joint Purchases
  • Stamp Duty Exemptions and Changes in 2024


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Past Seminars

MahWengKwai & Associates proudly supports the Human Rights Festival, a significant initiative organised by the Bar Council’s Human Rights Committee. This engagement reflects our firm’s dedication to corporate social responsibility (CSR) and environmental, social and governance (ESG) values. The festival is a beacon for human rights advocacy in Malaysia and is scheduled for 10 December 2023 at APW Bangsar.

About the Human Rights Festival

The festival is not just an event but a movement, fostering inclusivity and justice in society. It features booths from various NGOs, each spotlighting critical issues ranging from refugees and indigenous rights to disability and children’s rights. Engaging activities, performances, and games are planned to entertain and educate attendees of all ages.

Advocating Human Rights

This year, over 10 of our lawyers are actively volunteering to organise the festival, demonstrating their passion for social justice. They are involved in tasks like coordinating with NGOs, managing event logistics, and providing legal insights during discussions.

“Human rights are not mere legal doctrines confined to statutes, they are the inalienable rights of every individual, regardless of their background, identity, or circumstances. As lawyers, human rights should be the moral compass that guides our interactions, decisions, and advocacy in our everyday legal practice so that human rights will not be a “privilege” bestowed only upon a select few. Certainly, the Bar Council holds a unique responsibility to promote and safeguard human rights in Malaysia. However, it is important to recognize that the onus of advocating for human rights should not rest solely on the shoulders of legal institutions such as the Human Right Commission of Malaysia (“SUHAKAM”), KOMAS and Suara Rakyat Malaysia (“SUARAM”). Non-governmental organizations (“NGOs”) and civil society organizations (“CSOs”) play an equally crucial role in contributing to a world where every person is treated with respect and fairness. It is through collaboration and a shared commitment to justice that we can build societies where human rights are not just protected but actively promoted. Together, we can turn the concept of human rights from rhetoric into a tangible reality for everyone.”
-Dato Mah Weng Kwai, former Commissioner of The Human Right Commission of Malaysia (SUHAKAM) and Consultant of Messrs MahWengkwai & Associates

“The core of our professional ethos lies a deep-seated dedication to championing human rights, not merely as a corporate responsibility, but as an integral part of our daily work. As a lawyer, we embody the skills, network, platform and voice needed to advocate for and help underprivileged societies. I am proud to be part of a firm that doesn’t just talk about human rights but lives and breathes these values. I encourage young lawyers to actively participate in the Bar Council Human Rights Committee and its events to make positive change and use our voices as a vehicle for change and to empower the public in upholding human rights in Malaysia. It is important for organisations to remember that human rights work should not just be a checkbox or a public relations strategy; it is a fundamental aspect of who we are and what we strive to achieve for a better world.”
-Cassandra Nicole Thomazios, MWKA Partner & Co-Chair of the Human Rights Festival 2023

“Advocating for Human Rights can be anything from doing pro-bono work, speaking engagements on human rights causes, CSR work, donations to helping underprivileged communities on the ground. I believe that everyone can make a start and a difference no matter how small to give back to society. Human Rights are universal that affect everyone and it is everyone’s responsibility to advocate for it”
-Gan Chong Chieh, MWKA Partner

“A lifetime of service for something greater than ourselves is a shared goal of many: parents raising us, doctors saving lives, servicemen protecting nations, artists sharing their art and, gratefully, the list goes on! To me, especially as a lawyer, that lifetime of service means to always be intentional in being involved in as many CSR activities, pro bono work and anything where I can dedicate my time to something meaningful besides work. I am thankful that I am part of a team where such opportunities come by often and I believe that is a testament to the amazing people I have the privilege of working with, who spare no effort to be a light for the protection of human rights, for all. Currently we are happily devoting our time to organising the Human Rights Festival 2023 coming up soon and we hope to welcome all human rights defenders there!
– Anis Mohd Sohaimi, MWKA Senior Associate

“With gratitude for the past and anticipation for the future, I’ve been privileged to stand at the forefront of human rights advocacy. Each event, every committee served, becomes a testament to championing the rights of the oppressed. With my involvement in the Human Rights Festival 2023 committee, surrounded by individuals whose unwavering commitment echoes a symphony of change, I am deeply inspired by their dedication to this cause. As I traverse my journey in the legal field, I eagerly anticipate delving deeper into the heart of the human rights committee in Malaysia, knowing that each step forward is a beacon of hope for a fairer, more just world.”
– Sarah San, MWKA Pupil-in-Chambers

Past Contributions and Our Ongoing Commitment

Our commitment to human rights is longstanding. We have participated in events like the Human Rights Festival 2022 and the Responsible Business Exhibition in Kuala Lumpur 2023, organised by the Thomson Reuters Foundation. These events have been vital in strengthening our relationships with various agencies and underscoring our support for human rights in Malaysia. To read more about our other CSR work, click here.

The Malaysian Bar’s Human Rights Festival is more than an event; it’s a symbol of advocacy and a platform for NGOs to voice human rights concerns. Our ongoing participation in such events is a testament to our firm’s dedication to social justice and human rights.

Join Us in Making a Difference

We invite you to join us at the Human Rights Festival to experience this celebration of human rights and to learn more about how we can collectively contribute to a just and equitable society.

At MahWengKwai & Associates, we are committed to creating a positive impact and contributing to a society that upholds and respects the rights of all. Join us in this journey towards a more humane and just world.

By Raymond Mah and Cassandra Nicole Thomazios


Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

In mergers and acquisitions, the negotiation of the purchase price and its payment terms is key to a successful transaction. Typically, the purchase price is based on an agreed-upon valuation method. Buyers aim to acquire target companies at a value that reflects their investment criteria, while sellers seek to maximise the return on their equity. A common feature in these agreements is the inclusion of an earn-out payment provision. This provision allows for the adjustment and deferred payment of the purchase price, offering a balanced approach to finalising the purchase price.

Our previous article on mergers and acquisitions provided a general overview of these transactions. This article will focus specifically on earn-out payments, which are frequently used in private acquisitions. We will discuss the structure of earn-out payments, their role in transactions, and important considerations for both buyers and sellers.

Understanding earn-out payments is crucial for anyone involved in mergers and acquisitions. Properly structured, they can provide a flexible and efficient way to bridge valuation gaps between parties.

What is an Earn-Out Payment?

An earn-out payment is essentially a portion of the purchase price in a merger or acquisition that is deferred and contingent upon the future performance of the acquired company. This payment mechanism allows part of the purchase price to be paid later, based on specific performance metrics agreed upon in the definitive agreement.

For instance, the performance could be measured by the revenue or profits generated by the target company over a set number of years after the deal is completed. This approach helps align the interests of the buyer and seller: the seller is incentivized to ensure the continued success of the business, often by staying involved in operations, while the buyer mitigates the risk of overpaying for a company whose future performance is uncertain.

Typically, the total purchase price in an earn-out agreement is paid in tranches: an initial payment made at the execution of the definitive agreement, a subsequent payment at the completion of the deal, and then additional payments based on the agreed earn-out criteria by a certain date.

Earn-out agreements can vary widely. They might use different metrics to measure success, cover different time frames, or have various conditions attached. Understanding these nuances is critical for both buyers and sellers to negotiate a deal that accurately reflects the value and potential of the target company.

Incorporating an Earn-Out Payment

If parties agree to incorporate an earn-out payment in an acquisition deal, there are many factors that the parties should consider, such as:

  1. Employment and Retention: Will the sellers be employed or retained as directors or key management post-completion? What provisions exist if they or other key employees leave during the earn-out period?
  2. Payment Structure: What proportion of the purchase price is subject to the earn-out? Is it based on fixed revenue targets or an adjustable scale?
  3. Performance Metrics: What indicators or measures will determine the revenue targets? What accounting standards will be applied?
  4. Revenue Calculation: Will the revenue be calculated as gross or net?
  5. Payment Cap: Is there a maximum cap on the earn-out payment?
  6. Earn-Out Period: What is the duration for achieving the revenue targets, and is it reasonable?
  7. Payment Terms: How will the earn-out payment be processed upon determination of the amount?
  8. Set-off Rights: Are there any rights to set off against the earn-out payment?
  9. Acceleration Events: What events during the earn-out period may trigger accelerated payment of the maximum earn-out to the seller?

Understanding and addressing these factors in the definitive agreement is essential. A comprehensive agreement reduces the risk of future disputes and ensures both parties have a clear understanding of the earn-out’s structure, mechanisms, and terms. The ultimate goal is a mutually agreeable structure that reflects the parties’ interests and objectives

Illustration of an Earn-Out Scheme

For the ease of reference and understanding, the table below shows a simple illustration of an earn-out payment scheme:

Framework of the Earn-Out Scheme

The Assessment Scale for the Earn-Out Amount


Incorporating earn-out payments in acquisition transactions offers a strategic solution for aligning the interests of both purchasers and sellers. For purchasers, it provides a safeguard against overpaying, tying part of the purchase price to the future performance of the target company. Sellers, on the other hand, benefit from the potential to maximise their return through post-completion involvement in the company, steering it towards achieving specific profitability goals.

This arrangement is particularly advantageous when the future profitability of the target company is uncertain. It allows purchasers to mitigate risk while offering sellers an opportunity to prove the value of their company and earn accordingly.

To ensure clarity and fairness in these transactions, it is crucial to negotiate and potentially cap the earn-out amount. This approach establishes clear parameters for the final purchase price, providing certainty and setting realistic targets for both parties. We recommend that parties involved in M&A consider earn-out payments as a flexible tool for bridging valuation gaps. Proper negotiation and structuring of these payments can lead to successful, mutually beneficial transactions, balancing risk and reward for both buyers and sellers.

If you are entering into an M&A transaction and would like us to advise you on the transaction, feel free to contact us, and we will be pleased to assist you with your matter.

By Tommy Wong


Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Wednesday, 13 December 2023

3:00 pm – 4:00 pm Absenteeism and Abuse of Annual and Medical Leave

About this talk

Employee absenteeism and abuse of annual and medical leave are common problems faced by employers. This talk will explain the law on absenteeism and annual and medical leave, before exploring what sanctions employers may impose on employees in response to absenteeism, going on annual leave without prior approval, and abuse of medical leave. Practical tips will be provided to help employers avoid and deal with these issues more effectively.

The talk will be delivered over video conference using You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Employment Law on Absenteeism
  • Requirement for Annual Leave Approval
  • Employee’s Abuse of Medical Leave
  • Practical Tips for Employers


  • John Chan, Partner, Dispute Resolution Practice Group
  • Jasmine Wee, Associate, Dispute Resolution Practice Group
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Past Seminars

Fri, 10 May 2024

9:30 am – 1:30 pm Corporate Social Responsibility (CSR), Business and Human Rights

(Download pdf brochure)

RM450 per pax nett (Refreshments will be provided)

About This Seminar

Unlock the Power of Profitable Ethics! Dive into the seminar, where CSR meets business strategy. Discover how leading companies turn ethical practices into increased revenues, brand loyalty, and market differentiation. From risk management to talent retention, we will unveil the strategies that do not just do good—they are good for business. Do not just follow the trend, lead with Profitable Ethics!

The talk will be delivered in person at the Conference Room, MahWengKwai & Associates.

We are pleased to offer you a 20% discount (MWKA20) if you register 3 pax or more.

To claim this offer, just key in the discount code “MWKA20” into the Discount Voucher section during your checkout on our payment page.

Please join us and sign up!

*Note: Our registration closes on 26 April 2024, or when all slots have been taken up, whichever comes first.


Exploring the strategic alignment of CSR with core business objectives. Understanding how ethical practices can drive profitability and brand loyalty. Mastering the tools to integrate human rights considerations seamlessly into business operations.

Seminar Points

  • Understanding the legal implications of CSR integration in corporate strategy.
  • Grasping the immediate compliance benefits of adopting ethical practices.
  • Examining case studies that highlight legal successes and pitfalls in human rights integration.
  • Recognising how corporate sustainability can enhance legal standing and brand reputation.
  • Strategising risk management from both legal and sustainability perspectives

Learning Outcomes

In this 4-hour seminar, participants will delve into the legal framework underpinning CSR and its strategic implications. They will uncover the tangible legal advantages of embedding ethical standards in business, drawing from real-world human rights case studies. The seminar emphasizes the symbiotic relationship between corporate sustainability and legal positioning, equipping attendees with tools to formulate risk strategies that seamlessly blend these two crucial perspectives, ultimately enhancing brand value and corporate reputation.

Seminar features:

  • High Engagement
  • Small groups
  • Hands-on learning

Target Audience

  • Corporate Executives and Managers
  • Chief People Officer/ HR Director
  • Business Owners and Entrepreneurs
  • Chief Risk Officers (CRO)


Register Now

Wednesday, 29 November 2023

3:00 pm – 4:00 pm Money Laundering Offences: Understanding Risks and Compliance under AMLA 2001

About this talk

Navigating the details of money laundering laws is vital in today’s business landscape. Prepare your business with an in-depth understanding of the legal framework, penalties for non-compliance, and effective strategies for risk management and corporate safeguarding. This webinar is for business owners, directors, in house legal counsels, finance, risk and compliance officers seeking to deepen their knowledge and protect your organisation from the perils of money laundering and compliance failures under the Anti-Money Laundering, Anti-Terrorism Financing And Proceeds Of Unlawful Activities Act 2001.

The talk will be delivered over video conference using You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Understanding Money Laundering
  • Money Laundering Offences and Penalties
  • Risk and Compliance with AMLA 2001 and Other Laws
  • Client Due Diligence (CDD) and Suspicious Transaction Report (STR)


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Past Seminars

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