He is a business owner from Penang.
His humble shop sold RM80,000 worth of industrial parts to a regular customer. Because the customer had always paid before, uncle never thought of asking for a personal guarantee. .
When payment was due, the customer’s company claimed “cashflow issues” and dragged it out for months.
Uncle gave more time out of kindness. But by the time uncle came to me, the debtor's company had already quietly wound down.
We did an up-to-date SSM Company Profile search which confirmed our greatest fear: that the company was already in Winding Up.
It also showed that the entity was basically an empty shell; with no financial audits done since 2020.
Uncle was understandably angry and disappointed in himself. He asked me desperately: “Can’t I go after the director personally?”
Unfortunately, in Malaysia, a Sdn Bhd company has its own legal personality.
Unless you protected yourself earlier through a personal guarantee, you’re usually stuck chasing a shell.
My sincere advice is: don’t trust past behaviour blindly. A good paymaster can easily turn into a bad debtor overnight.
1. Get it in writing early: a PG (personal guarantee) can make all the difference.
2. Do basic due diligence: spending a bit of money for a @ctos.digital search can save you thousands down the road.
Penang uncle's case is one of the many examples of why prevention is cheaper than cure.
Rudi Cheu (rudi@rulecolaw.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
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