Section 35
of Limited Liability Partnerships Order, 2010
Section 35
(1)
The High Court may –
(a)
on the application of the Minister or the Official Receiver as provided for in subsection (11); and
(b)
on being satisfied as to the matters referred to in subsection (2), make an order (in this section referred to as a disqualification order) disqualifying the person named therein from being a manager of a limited liability partnership for the period specified in the order not exceeding 5 years from the date of the making of the order.
(2)
The High Court shall make a disqualification order under subsection (1) if it is satisfied that –
(a)
the person against whom the order is sought has been given not less than 14 days notice of the application for the order;
(b)
that person is or was a manager of a limited liability partnership which has gone into liquidation (whether while he was a manager or within 3 years of his ceasing to be a manager) and was insolvent at the date of its liquidation; and
Incorporating amendments until S 1/2016
(Cleancopy) NANI/Amiriah/fiqah/Karimah_as of 24th June2019
22
BLUV as at 14th January 2016
(c)
his conduct as a manager taken alone or taken together with his conduct as a manager of any other limited liability partnership or as a director of any other corporation makes him unfit to be a manager of a limited liability partnership.
(3)
If in the case of a person who is or was a manager of a limited liability partnership which is –
(a)
being wound-up by the High Court, it appears to the Official Receiver or to the liquidator, if he is not the Official Receiver;
(b)
being wound-up otherwise than by the High Court, it appears to the liquidator, that the conditions mentioned in subsections (2)(b) and (c) are satisfied as respects that person, the Official Receiver or the liquidator, as the case may be, shall immediately report the matter to the Minister.
(4)
The Minister may require the Official Receiver or the liquidator or the former liquidator of a limited liability partnership to –
(a)
furnish him with such information with respect to any person's conduct as a manager of the limited liability partnership; and
(b)
produce and permit inspection of such books, papers and other records relevant to that person’s conduct as such a manager, as the Minister may reasonably require for the purpose of exercising or determining whether to exercise any of his functions under this section.
(5)
If any person fails to comply with any requirement under subsection (4), the
High Court may, on the application of the Minister, make an order requiring that person to make good the default within such time as is specified in the order.
(6)
In this section –
(a)
the date of liquidation of a limited liability partnership shall be –
(i)
if the limited liability partnership is wound-up by the High
Court, the date of the filing of the winding-up application;
Incorporating amendments until S 1/2016
(Cleancopy) NANI/Amiriah/fiqah/Karimah_as of 24th June2019
23
BLUV as at 14th January 2016
(ii)
where a provisional liquidator was appointed under paragraph 37
of the Fourth Schedule, the date the declaration made under that paragraph was lodged with the Registrar;
(iii)
in any other case, the date of the passing of the resolution for winding-up;
(b)
a limited liability partnership shall be taken to be insolvent if it was unable to pay its debts, within the meaning of that expression in paragraph 3(2) of the
Fourth Schedule;
(c)
references to a person’s conduct as a manager of a limited liability partnership or a director of a corporation include, where any of those entities have become insolvent, references to that person’s conduct in relation to any matter connected with or arising out of the insolvency of that entity.
(7)
In deciding whether a person’s conduct as a manager of any particular limited liability partnership makes him unfit to be a manager of a limited liability partnership as is mentioned in subsection (2)(c), the High Court shall, in relation to his conduct as a manager of that limited liability partnership, have regard –
(a)
generally to the matters referred to in subsection (8); and
(b)
in particular, to the matters referred to in subsection (9), notwithstanding that the manager has not been convicted or may not be criminally liable in respect of any of these matters.
(8)
The matters referred to in subsection (7)(a) to which the High Court shall have regard generally are –
(a)
whether there has been any misfeasance or breach of any fiduciary or other duty by the manager in relation to the limited liability partnership;
(b)
whether there has been any misapplication or retention by the manager of, or any conduct by the manager giving rise to an obligation to account for, any money or other property of the partnership; and
(c)
the extent of the manager’s responsibility for any failure by the partnership to comply with this Order.
Incorporating amendments until S 1/2016
(Cleancopy) NANI/Amiriah/fiqah/Karimah_as of 24th June2019
24
BLUV as at 14th January 2016
(9)
The matters referred to in subsection (7)(b) to which the High Court shall have regard in particular are –
(a)
the extent of the manager’s responsibility for the causes of the limited liability partnership becoming insolvent;
(b)
the extent of the manager’s responsibility for any failure by the partnership to supply any goods or services which have been paid for, in whole or in part;
(c)
the extent of the manager’s responsibility for the partnership entering into any transaction liable to be made void under paragraph 8(1) of the Fourth Schedule;
and
(d)
whether the causes of the partnership becoming insolvent are attributable to its carrying on business in a particular area where the risk of insolvency is generally recognised to be higher.
(10)
The Minister may, with the approval of His Majesty the Sultan and Yang Di-Pertuan and by order published in the Gazette, amend the matters referred to in subsections (8)
and (9) and that order may contain such transitional provisions as may appear to the Minister to be necessary or expedient.
(11)
In the case of a person who is or was a manager of a limited liability partnership which has gone into liquidation and is being wound-up by the High Court, an application under this section shall be made by the Official Receiver, but in any other case the application shall be made by the Minister.
(12)
On the hearing of an application under this section –
(a)
the Minister or the Official Receiver, as the case may be, shall appear and call the attention of the High Court to any matter which appears to him to be relevant (and for this purpose the Minister may be represented by counsel) and may give evidence and call witnesses; and
(b)
the person against whom an order is sought may appear and himself give evidence and call witnesses.
Incorporating amendments until S 1/2016
(Cleancopy) NANI/Amiriah/fiqah/Karimah_as of 24th June2019
25
BLUV as at 14th January 2016
(13)
A person who acts as receiver or as receiver and manager shall not be liable to have a disqualification order made against him in respect of acts done in his capacity as receiver or as receiver and manager, as the case may be.
(14)
Nothing in this section shall prevent a person who is disqualified pursuant to an order made under subsection (1) from applying for leave of the High Court to be a manager of a limited liability partnership.
(15)
On the hearing of an application made under subsection (14), the Minister or the Official Receiver shall appear (and for this purpose the Minister may be represented by counsel) and call the attention of the High Court to any matter which appears to him to be relevant to the application and may give evidence or call witnesses.
(16)
Any person who contravenes a disqualification order made under this section is guilty of an offence and liable on conviction to a fine not exceeding $10,000, imprisonment for a term not exceeding 2 years or both.
Disqualification of manager of limited liability partnerships wound-up on grounds of national security or interest.