Legal Dictionary

receiving order

Legal Definition of receiving order

Further reading

Bankruptcy in Malaysia

If a debtor has committed an act of bankruptcy, the court may on a bankruptcy petition being presented, either by creditor or by the debtor make an order for the protection of the estate, which order is called a receiving order.

Effect of receiving order

On the making of a receiving order the Director General of Insolvency (DGI) shall be thereby constituted receiver of the property of the debtor, and thereafter, no creditor to whom the debtor is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the debtor in respect of the debt, or shall proceed with or commence any action or other legal proceeding in respect of such debt unless with the leave of the court and on such terms as the court may impose.

On a receiving order being made against a debtor he shall, within twenty-four hours after such order has been served upon him file an affidavit in the office of the Director General of Insolvency (DGI), containing a true and correct statement of the names and residences of all the partners, if any, in his business and of his principal assets and liabilities.

Notice of every receiving order, stating the name, address and description of the debtor, the date of the order and the date of the petition, shall be gazetted and advertised in a local paper.

As soon as may be after the making of a receiving order against the debtor a general meeting of his creditors, referred to as the first meeting of creditors, shall be held for the purpose of considering whether a proposal for a composition or scheme of arrangement shall be entertained, or whether it is expedient that the debtor be adjudged bankrupt, and generally as to the mode of dealing the debtor's property.

Adjudication of bankruptcy

At the time of making a receiving order the court shall adjudge the debtor bankrupt unless the debtor can show to the satisfaction of the court that he is in position to offer a composition or make a scheme of arrangement satisfactory to his creditors; provided that when a receiving order is made against a firm in the firm's name the court shall not adjudge any person bankrupt as a member of the firm unless such person is proved to the satisfaction of the court to be a partner by his own admission or by evidence on oath.

Bankruptcy (Amendment) Act 2017

The new Bankruptcy (Amendment) Act 2017 [Act A1534] received the Royal Assent on 5 October 2017 and came into effect on 6 October 2017.

Under the new Bankruptcy Amendment Act:

  • the receiving order and adjudication order are replaced by a single bankruptcy order;
  • the minimum threshold for bankruptcy has been raised from RM30,000 to RM50,000;
  • a creditor's petition is not allowed to be presented against a social guarantor.

The High Courts of Malaysia now makes a Bankruptcy Order, instead of the previous Receiving Order and Adjudication Order, after a bankruptcy petition has been presented.


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