Insolvency Law Required to Be Used for Winding Up From Now OnNovember 29, 2021
The Insolvency Law is required be used from now on for winding up. The section on winding up under the MCL was replaced by the section in the Insolvency Law which came into effect on 25 March 2020. However, this section of the Insolvency Law has not been applied due to the lack of applicable forms and tools. On 19 November 2021, the Directorate of Investment and Company Administration (“DICA”) announced that insolvency proceedings, including winding up of companies, must be carried out under Section 418 of the Insolvency Law from the effective date of the law.
According to the DICA announcement, companies must state the relevant sections of the Insolvency Law from now on upon making a public announcement for liquidation. In addition, all companies must comply with the timeline set in the Insolvency Law and Rules for the winding up process.
Although it is not mentioned in the DICA announcement, DICA has verbally confirmed that the application J forms issued under the Myanmar Companies Law (“MCL”) are still used for filing cases in MyCO while DICA is working on the new application forms in accordance with the Insolvency Law.
In addition, companies will need to appoint an insolvency practitioner certified by the Myanmar Association as its liquidator. However, at present, the application process for insolvency practitioners has not been finalized by the association. Hence, companies are still able to appoint a liquidator to carry out the liquidation process in accordance with the MCL until the Myanmar Insolvency Practitioners’ Regulatory Council has approved a draft application for certification of the insolvency practitioner and the application has been published on MyCO.