From March 25, 2020, the Directorate of Investments and Companies Administration has announced that liquidation of companies will only be carried out in accordance with the Insolvency Law. According to Insolvency Law 2020, the winding up of a company registered may be either,

  1. Voluntary;
  2. by the Court.

A company may be wound up voluntarily in one of the following circumstances:

  •  where the constitution of the company fixes a period for the duration of the company and that period expires
  • provides that the company is to be dissolved upon the occurrence of an event and the event occurs
  • the company in general meeting has passed a resolution requiring the company to be wound up voluntarily.
  • If the company resolves by special resolution that the company be wound up voluntarily;

Members’ voluntary winding up
In a members’ voluntary winding up, the company in general meeting must appoint one or more liquidators for the purpose of winding up the company’s affairs and distributing its property. The declaration must be delivered to the Registrar after making a statutory declaration of the directors at a directors’ meeting that the company will be able to pay its debts in full, together with interest, within a period not exceeding one year from the commencement of the winding up. The winding up of a company commenced at the time that the resolution for winding up was passed.

Creditors’ voluntary winding up
In the case of the voluntary winding up of a company registered under the Myanmar Companies Law, the company:

  • must cause a meeting of its creditors to be summoned for the same day as the day on which there is to be held the company meeting at which the resolution for voluntary winding up is to be proposed;
  • must cause the notices of the creditors’ meeting to be sent by post to the creditors not less than 5 business days before the day on which that meeting is to be held;
  • the directors of the company must present a statement at the creditors’ meeting and appoint one of them to preside at that meeting as chair;
  • In a creditors voluntary winding up, the creditors of the company at their meeting must appoint one or more liquidators for the purpose of winding up the company’s affairs and distributing its assets. If no liquidator is appointed by the creditors at the meeting, the liquidator may be appointed by the company.

Winding up by the Court

The winding up of a company commence where the order was made at a time when a voluntary winding up was in progress, at the time the resolution for voluntary winding up was passed and otherwise, at the time of filing of the petition for the winding up of the company.
A company may be wound up by the Court if the company has by special resolution resolved, the company does not commence its business within a year from its incorporation or suspends its business for a whole year, the company is insolvent and the court is satisfied that it is just and equitable that the company should be wound up.
An application to the Court for the winding up of a company based on insolvency must be by petition presented by a director or directors, a creditor, contributory or the registrar.
The court may appoint a liquidator provisionally at any time after the presentation of a winding up petition, and before the making of a winding up order. Upon an order being made for the winding up of a company, the court must appoint an insolvency practitioner, a nominee of the applicant for the winding up order, the official receiver as liquidator.
The court may, on the application of the liquidator or of any creditor or contributory and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings.
After investigating the requirements of the company, the liquidator must present a report to the Registrar and such report is, in any proceedings, prima facie evidence of the facts stated in it. If the winding up of a company is not concluded within one year after its commencement, the liquidator must send to the Registrar a statement and a report must also be submitted annually until the winding up is concluded.

Finalization of liquidation and dissolution of the company

As soon as the company’s affairs are fully wound up, the liquidator must call a meeting of the creditors or a meeting of members if it is a members’ voluntary winding up, to give an explanation of an account of the winding up, showing how it has been conducted and the company’s property has been disposed of.
Within one week after the date of the meetings, the liquidator must send to the Registrar a copy of the account, and minutes of the meeting. The Registrar must immediately register the documents after receiving the information and on the anniversary of 3 months from the registration the company is deemed to be dissolved.
If a company is to be liquidated, it is recommended to carefully consider the method of liquidation and its consequences, and to consult with professionals and obtain good advice in order to use those methods properly.