CORPORATE RESCUE MECHANISMS FOR CO-OPERATIVE SOCIETIES IN MALAYSIA: A PROPOSAL
DOI:
https://doi.org/10.31436/iiumlj.v31iS1.878Keywords:
Corporate Rescue Mechanism, Insolvency Law, Co-Operative Society, Co-operative Societies Act 1993Abstract
Business organisation’s solvency status might shift to insolvency, thereby granting creditors the power to distribute assets of the debtor. For corporate entities governed by the Companies Act 2016, the statute offers various comprehensive corporate rescue mechanisms, such as Scheme of Arrangement (SA), Corporate Voluntary Agreement (CVA), and Judicial Management (JM), to help companies survive. However, there is no such rescue mechanism for co-operative society under the Co-operative Societies Act 1993. The absence of any similar mechanism has increased the vulnerability of co-operative societies in Malaysia when they are in a state of indebtedness. This article aims to explore the possibility of introducing a rescue mechanism for co-operative societies from being liquidated to promote their viability in Malaysia. This article employed a qualitative legal research method. Relevant legal documents, including textbooks, statutes and case law, were analysed using the content analysis approach. It is submitted that proposing corporate rescue mechanisms for co-operative societies in Malaysia falls under the principle of public interest. The implementation of these new rescue mechanisms is expected to enhance the appeal of co-operative societies in Malaysia to potential investors and enable them to remain competitive in the marketplace.
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