The start of a business is an exciting part that lasts a lifetime. The thrill of venturing to an unknown territory combined with the excitement of being able to accomplish such a major endeavor is truly a rare experience that not everybody can experience. Because of this, and the original intent to earn from something that comes from passion drives business owners to continue and plough on even in the face of incredible odds. That is a very admirable quality but like most things, there are times when even the strongest, the toughest or the most persevering is left with no choice but to throw the towel and admit defeat.
Unfortunately, this is also a part of the business, no matter how unwanted. Business closures are not at all uncommon but they are still an undesirable outcome especially for the owners. Practically speaking, in Malaysia, businesses are terminated with the Suruhanjaya Syarikat Malaysia or more commonly known as SSM, for the following reasons:
Cessation of business – In business terms, cessation of business happens when the company ceases to operate its normal course of business due to financial reasons or by virtue of the Board’s determination that the continuation of operation will only bring more financial trouble to the company by not being able to meet its liabilities. Using these definitions, cessation of business is an instance where a company finds itself unable to operate normally, thus the lesser evil of terminating is the best way to salvage what can be salvaged.
Bankruptcy – Simply put, bankruptcy is a legal procedure which the business undergoes when it is unable to pay its creditors. As a result, bankruptcy proceedings are done to give the creditors opportunity for repayment through the assessment of the businesses’ remaining assets. For these reasons, since the company will no longer possess any assets as all of these will be assessed to at least cover some of the liabilities, termination is a must.
Death of the owner – Mostly applicable to single proprietorships, the death of the owner will automatically mean the termination of the business. Once the business owner dies, the assets will become a part of the owner’s estate. In contrast, for partnerships and corporations, the death of a partner will not mean the termination of the business. Instead, deceased stocks will be transferred in accordance with the deceased’s will.
Pursuant to a court order – Arising from various circumstances, court orders ordering the closure of business are orders that leave the business without any choice but to follow the order for closure. In this instance, businesses will be terminated accordingly.
For all these closures, business owners are required by SSM to file necessary documents for the official closure of businesses. Termination of businesses like its registration requires compliances that should be submitted. Closing a business does not mean just leaving it as is, procedures are strictly followed to ensure that all processes are legal and binding. This is to avoid any future issues to register SSM and the company or business for closure.
