A company owes me money. Can I use a section 466 notice and winding up to get paid?

A company has ignored your invoices for months. You have heard that a "section 466 notice" can force it to pay. It can be effective, but it is a serious step aimed at insolvency, not an ordinary debt claim.

What section 466 says

A company is deemed unable to pay its debts if any of these applies (section 466(1)):

• (a) statutory demand: it owes a sum exceeding the amount prescribed by the Minister, a creditor has served a notice of demand by leaving it at the company's registered office, and the company has for 21 days neglected to pay the sum or to secure or compound for it to the creditor's satisfaction;
• (b) unsatisfied execution: execution on a judgment in the creditor's favour is returned unsatisfied in whole or in part; or
• (c) proved inability: the court is satisfied the company is unable to pay its debts, taking into account contingent and prospective liabilities.

Inability to pay debts is a ground for winding up (section 465(1)(e)), and a creditor may petition (section 464(1)(b)).

The six-month deadline

A winding-up petition based on the notice must be filed within six months from the expiry of the notice (section 466(2)). Missing it means starting again.

The prescribed amount

The minimum debt is set by ministerial order and has been changed over time. Check the current figure before relying on the notice; MDI and official gazette notices are the sources.

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When the route suits, and when it does not

Suits: a clear, liquidated debt, such as unpaid invoices for delivered goods that were never disputed, or a judgment debt.

Risky: where the company has raised a genuine dispute, for example about defects, set-off or the amount due. Courts can restrain a petition based on a debt that is bona fide disputed on substantial grounds, and may order costs against the creditor. In those cases, sue for the debt first; see summary judgment.

What a petition does to the company

Once a petition is presented, dispositions of the company's property are void unless the court orders otherwise (section 472(1)), and banks often freeze accounts in practice. This pressure is why companies often pay. It is also why misuse is treated seriously.

Practical steps

1. Confirm the debt is due and undisputed, and that it exceeds the prescribed amount.
2. Check the registered office address through an official company search.
3. Prepare the notice carefully: the amount, the basis, and the 21-day demand.
4. Leave it at the registered office and keep proof of service.
5. Diary the 21 days and the six-month limit.

Example

A Seberang Perai supplier is owed for machine parts delivered and accepted by a manufacturing company, with no complaints raised. After a letter of demand, it serves a section 466 notice at the registered office. The company pays within the 21 days.

Common mistakes

• Using a section 466 notice for a disputed claim.
• Serving at a business address instead of the registered office.
• Including interest or charges that are not clearly due.
• Letting the six-month period lapse.

When to speak to a lawyer

Before serving the notice, and before filing any petition. See civil litigation, our debt recovery guide or contact us.

Frequently asked questions

Can I use section 466 against an individual?

No. It applies to companies. Individuals are dealt with under bankruptcy law.

Do I need a judgment first?

Not for the notice route under section 466(1)(a). A judgment is needed for the unsatisfied execution route.

What if other creditors join in?

In a winding up, creditors generally share in the assets according to the statutory order of priority, so a petition does not mean you will be paid in full.

Sources & fact check

Legal points in this article were checked against the primary sources below. The law can change; this is general information, not legal advice.

1. Companies Act 2016 (Act 777), AGC Laws of Malaysia
2. Malaysian Department of Insolvency (MdI): Corporate insolvency and winding up (Companies Act 2016 s.466(1)(a))
3. Rules of Court 2012 (P.U.(A) 205/2012), text published by the Malaysian Bar, including Orders 12, 13, 18, 19 and 93

Fact-checked on 17 Oct 2026