Who can order compulsory winding up of company?

Who can petition the court for a compulsory liquidation?

The petitioner is often a creditor of the company. However, the company itself, its directors and various other categories of people can seek to have a company put into compulsory liquidation (section 124, IA 1986).

What is a compulsory winding up order?

A winding up order is a court order that forces an insolvent company into compulsory liquidation – a process in which the court appoints an Official Receiver (OR) to liquidate all of the company’s assets in order to repay creditors.

Who pays for compulsory liquidation?

Compulsory liquidation is an expensive process: The court fee for presenting a winding up petition is currently £280. A creditor needs to pay a deposit to the Official Receiver of £1,600, which is intended to cover the costs and expenses of the Official Receiver immediately following a winding up of the company.

What is the process of compulsory liquidation?

Under compulsory liquidation, the consent of the company, its shareholders or directors is immaterial. Voluntary liquidation requires the process to be initiated by the corporate debtor itself, through its directors or partners, and it must be approved by both its shareholders (in the case of a company) and creditors.

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Under what circumstances will the court order a compulsory winding up of a company?

If a company is unable to pay its debts or the debts taken by the company is worth more than the assets it owns and no agreements have been made with the creditors, then the company is considered insolvent and is subjected to compulsory liquidation or compulsory winding up.

What are the grounds for compulsory winding up of a company?

Grounds for Compulsory Winding-up (Sec. 433):

  • A company may be wound-up by the Court under the following cases:
  • (i) Special Resolution of the Company:
  • (ii) Default:
  • (iii) Not commencing or suspending the Company:
  • (iv) Reduction of Members:
  • (v) Inability to pay Debts:
  • (vi) The Just and Equitable Clause:

When can a company be voluntarily wound up?

If two thirds in value of creditors of the company are of the opinion that it is in the interest of all parties to wind up the company, then the company can be wound up voluntarily. If the company cannot meet all its liabilities on winding up, then the Company must be wound up by a Tribunal.

Can you stop a company from winding up?

The recent Supreme Court of New South Wales decision in Re Avenue Investment Capital Pty Ltd (in liq) [2015] NSWSC 1919 is a useful reminder of the matters that a party seeking to stay or terminate the winding up of a company needs to establish in order to obtain an order staying or terminating a winding up.

Who can restrict the powers of board of directors?

It means that Board of Directors cannot exercise those powers on its own which are required to be exercised by the shareholders in general meeting, whether under this Act or any other act or by the memorandum or articles of the company or otherwise.

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Who may be appointed as director?

Only an Individual (living person) can be appointed as a Director in a Company. A body corporate or business entity cannot be appointed as a Director in a Company. A company can have a maximum of fifteen Directors – it can be increased further by passing a special resolution.