Section 443. Declaration of solvency

(1) Where it is proposed to wind up a company voluntarily, the director or in the case of a company having more than one director, the majority of the directors may—

(a) make a written declaration to the effect that the directors have made an inquiry into the affairs of the company; and

(b) at a meeting of directors, have formed the opinion that the company will be able to pay its debts in full within a period not exceeding twelve months after the commencement of the winding up.

(2) The declaration in subsection (1) shall be made by the directors before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out to the members of a company.

(3) A statement of affairs of the company shall be attached to the declaration containing the particulars made up to the latest practicable date before the making of the declaration as follows:

(a) the assets of the company, and the total amount expected to be realized;

(b) the liabilities of the company; and

(c) the estimated expenses of winding up.

(4) The declaration made by the directors shall have no effect for the purposes of this Act unless it is—

(a) made at the meeting of directors referred to in subsection (1);

(b) made within five weeks immediately preceding the passing of the resolution for voluntary winding up; and

(c) lodged with the Registrar before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out to members of the company.

(5) A director who makes a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period stated in the declaration commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or a fine not exceeding three million ringgit or to both and in the case of a continuing offence, to a further fine not exceeding five hundred ringgit for each day during which the offence continues after conviction.

(6) If the company is wound up under a resolution for voluntary winding up passed within a period of five weeks after the making of the declaration, but its debts are not paid or provided for in full within the period stated in the declaration, it shall be presumed until the contrary is shown that the director did not have reasonable grounds for his opinion.

(7) The company and every officer who contravene paragraph (4)(c) commit an offence and shall, on conviction, be liable to a fine not exceeding two hundred fifty thousand ringgit and in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.