Professional Documents
Culture Documents
Compulsory liquidation
The parties who are entitled by law to petition for the
compulsory liquidation of a company vary from
jurisdiction to jurisdiction, but generally, a petition may
be lodged with the court for the compulsory liquidation
of a company by:
I.
II.
III.
IV.
V.
voluntary winding up
Voluntary winding up is whereby a company is wound
up:
A. when certain period of time was fixed for the
duration of the company by expiration of
Memorandum of Association (MOA) or Article of
Association (AOA);
B. when the MOA or AOA provide that the company is
to be dissolved on certain events;
C. when the company general meeting has passed a
resolution requiring the company to be wound up
voluntarily; or
D.by special resolution in extraordinary general
meeting.
Pari-Passu Section 292 Companies Act 1965
Subject to this Act, in a winding up there shall be paid in
priority to all other unsecured debts :
A. firstly, the cost and expenses of the winding up
including taxed costs of a petitioner, remuneration
of the liquidator and the costs of any audit carried
out;
B. secondly, all wages and salary;
C. thirdly, all amounts due in respect of worker's
compensation under any written law relating to
worker's compensation accrued;
If, at any time during the MVL, the liquidator forms the
view that the company is not going to be able to pay its
debts in full with statutory interest as set out in the
declaration of solvency, they must summon a meeting
Commencement Date of
Liquidation
In liquidation, it is important to pay attention to the
following dates:
Date of commencement of winding-up
Date of winding-up
Date when the liquidator takes over the affairs of the
company.
Each date related to winding-up will have different
implication towards winding-up company as follows:
Voluntary Winding-up
Section 219 of CA 1965 states that the commencement
of the winding-up of a company under voluntary
winding-up shall be deemed to have commenced at the
time of the passing of the resolution. In other cases the
winding-up shall be deemed to have commenced at the
time of the presentation of the petition of winding-up.
Compulsory Winding-up
The compulsory winding-up will only occur when the
court order is obtained. Therefore, the date of the
commencement of winding-up mentioned in Section
219 of CA 1965 will differ from the date that the court
DUTIES
In compulsory liquidation, the liquidator must assume
control of all property to which the company appears to
be entitled. The exercise of their powers is subject to
the supervision of the court. They may be compelled to
call a meeting of creditors or contributories when
requested to do so by those holding above the statutory
minimum.
MISCONDUCT
Where, during the investigation of the affairs of the
company, the liquidator uncovers wrongdoing on the
part of the management of the company, he may have
power to bring proceedings for wrongful trading or, in
extreme cases, for fraudulent trading.
REMOVAL
Depending upon the type of the liquidation, the
liquidator may be removed by the court, by a general
Act
S252
S237
S244
Provision
The court may delegate its power to the
liquidator.
Liquidator can hold and conduct meeting to
ascertain the wishes of the creditors and
contributories.
The liquidator has the power to settle the list of
contributories; to recify the register of member
and collect and apply the assets.
S247
S277(5)
S296