Malaysia legislation
Section 55
Section 55
(2)
The redemption shall not be taken as reducing the amount of share capital of the company.
(3)
The shares shall not be redeemed unless they are fully paid up.
(3A)
The shares may be redeemed out of the profits or, subject to subsection (3B), out of the capital of the Labuan company.
(3B)
The shares shall not be redeemed out of the capital of the
Labuan company unless the directors declare by way of a solvency declaration—
(a)
that in their opinion, as regards the Labuan company’s situation at the date of the solvency declaration, there is no ground on which the Labuan company could then be found to be unable to pay its debts;
(b)
that in their opinion—
(i)
if there is an intention to commence winding up of the
Labuan company within the period of twelve months immediately following the date of the solvency declaration, that the Labuan company will be able to pay its debts in full within the period of twelve months beginning with the commencement of the winding up; or
(ii)
if there is no intention to commence winding up, that the Labuan company will be able to pay its debts as they fall due during the period of twelve months immediately following the date of the solvency declaration; and
(c)
that they have formed the opinion that the value of the
Labuan company’s assets is not less than the value of its liabilities (including contingent liabilities) and will not, after the proposed redemption, become less than the value of its liabilities (including contingent liabilities).
Labuan Companies 73
(3C)
The directors shall lodge a certified copy of the solvency declaration and notice of such redemption of share in the prescribed form within thirty days with the Authority, and on such lodgment the
Authority shall issue a certificate confirming the lodgment of the solvency declaration.
(4)
If default is made in complying with subsection (3C), the director of the Labuan company who is in default commits an offence under this Act.
Penalty: Fifty thousand ringgit or imprisonment for a term not exceeding three years or both.
(4)
(Deleted by Act A1367).
(5)
(Deleted by Act A1367).
(6)
(Deleted by Act A1367).
(7)
(Deleted by Act A1367).
(8)
(Deleted by Act A1367).