Mode of Winding Up
The Winding up of a company may be either
- By the court; or
Sub-Divisions of Voluntary Winding Up
- Members Voluntary Winding Up: wherein a declaration of solvency to pay debts is made
- Creditors Voluntary Winding Up: wherein a declaration of solvency is not made
- Subject to supervision of court: wherein a company has resolved to wind up voluntarily and the court makes an order on consideration of a petition by the member (s) or the creditor (s) that the Voluntary Winding up shall continue but subject to supervision of the court
2. Winding Up by the Court
- The Company or any creditor or creditors or the Registrar submits petition to the court for Winding up of the company by the court.
- Winding up of a company by the court is deemed to commence at the time of presentation of the petition for the Winding Up.
- The petitioner/the company files with the Registrar a copy of the Court order within thirty (30) days of the court order.
- The Registrar notifies in the official gazette that such a court order has been made.
- The court may, at any time after an order for Winding up, in consideration of an application of any creditor or contributor, make an order staying the Winding up proceedings either altogether or for limited time.
- The court may appoint other than the official receiver a person or persons as official liquidator or liquidators for the purpose of conducting the proceedings of winding up.
- The official liquidator files with the Registrar audited accounts.
- When the affairs of the company is completely wound up the official liquidator files with the Registrar court order of dissolution within fifteen (15) days of such an order.
3. Voluntary Winding Up
- A company may adopt resolution, special resolution or extraordinary resolution for Voluntary Winding up.
- A Voluntary Winding up is deemed to commence at the time of passing of the resolution.
- The company within ten (10) days of resolution notifies in the official gazette and in newspaper that such a resolution has been taken..
- Members Voluntary Winding up: In this case, prior to passing of the resolution of Voluntary Winding up, the directors at a meeting make a declaration of solvency that the company is capable to pay its debts within a period not exceeding three (3) years. The declaration is filed with the Registrar.
- Creditors Voluntary Winding up: In this case, a declaration to pay debts is not made.
- The company shall appoint one or more liquidators.
- As soon as the affairs of the company are fully wound up and final meeting held, the liquidator within one (1) week of the meeting files with the Registrar final accounts and returns of the final meeting.
- The company shall be deemed to be dissolved on expiration of three (3) months of registration of returns of the final meeting.
- The dissolution period may however be extended by the court on consideration of any petition.
- Winding up subject to supervision of court: At any stage of the Voluntary Winding up process, the court may make an order, on consideration of a petition by the member (s) or the creditor (s), that the Voluntary Winding up shall continue but subject to supervision of the court.