ON Aug 25, Parliament passed the Covid-19 Bill and the Insolvency (Amendment) Bill 2020, which are closely related to the issue of a moratorium on creditors’ actions against companies and individuals. The likelihood of creditors’ actions leading to bankruptcy of the business owner or the closure of the business has been hovering over businesses like a Damocles sword during the lockdown caused by the Covid-19 pandemic. The main challenge lies in managing revenue streams and addressing the ability to pay off debts and business loans.
Generally, section 465(1), Companies Act 2016 allows creditors to apply for winding up of a company in court if the total debt is RM10,000 or more. The Company is given a period of 21 days from the date of the notice of claim to pay off the debt. If it fails, the company can be wound up.
