All economic partnerships are governed by the Partnership Act 1961 in Malaysia.
Under Section 3 of the Partnership Act 1961, a partnership is “relation which subsists between persons carrying on business in common with a view of profit”. A partnership generally consists of 2 to 20 persons.
Establishing a partnership in a business may seem like a good deal as there will be more convenience in managing the business. However, conflicts and disagreements may arise during the business journey which may reduce cooperation among partners or worse, termination of the partnership as a whole.
There are several procedures that need to be followed in order to dissolve the partnership:
Reasons to Dissolve a Partnership
- Cessation of business
- Expiration of partnership term
- Notice given by a partner who intends to end the partnership
- Bankruptcy
- Death of partners
- Mandated by the court
Procedure
- The partners are required to complete the Notification of Termination for Registered Business (Form C), which may be obtained through the Suruhanjaya Syarikat Malaysia (SSM) official website.
- It is compulsory for all partners involved to sign the completed form accordingly.
- The form can be submitted directly over the counter at any SSM offices or submitted online at ezbiz.ssm.com.my.
- Along with the form, several supporting documents are also required upon submission which includes:
- Business registration certificate
- Clear copy of partners’ NRIC
- Clear copy of death certificate of partner (if any)
- Clear copy of court order termination (if any)
- Documents proving the owner was declared as bankrupt (if any)
General Guideline
1. Business Termination is to be registered within 30 days from the date of business termination.
2. Registered business that has not expired is allowed to submit Notice for Termination of Registered Business to dissolve the partnership.
3. Submit the Notification as a result of death within 4 months from the date of demise of partner/s.
4. Confirmation Letter on expired business can be requested from SSM with a payment of RM10.00.
5. Result of application can be obtained within 15 minutes from the time submission is made.
6. Any partner/s who fails to file a notice of termination where the business has been terminated would have committed an offence and shall be imposed a fine not more than RM10, 000.00 or imprisonment for no more than 1 year, or both.
