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Winding up Voluntarily

company, liquidator, court, resolution, wound, meeting and rights

WINDING UP VOLUNTARILY. A volun tar• winding up, or liquidation, is one which is brought about by the resolution of the company itself. Where a solvent company desires to reconstruct, or to amalgamate with another company, it may decide to wind up and appoint a liquidator to carry such resolution into effect ; but a volun tary liquidation is not confined merely to companies which are solvent.

The Companies (Consolidation) Act, 1908, provides : " 182. A company may be wound up voluntarily " (I) NN'hen the period (if any) fixed for the duration of the company by the articles expires, or the event (if any) occurs, on the occurrence of which the articles provide that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily : (2) If the company resolves by special resolution that the company be wound up voluntarily : " (3) If the company resolves by extra ordinary resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up.

" 183. A voluntary winding up shall be deemed to commence at the time of the passing of the resolution authorising the winding up.

" 184. When a company is wound up voluntarily the company shall, from the •commencement of the winding up, cease to •carry on its business, except so far as may be required for the beneficial winding up thereof : " Provided that the corporate state and •orporate powers of the company shall, not withstanding anything to the contrary in its articles, continue until it is dissolved.

" 185. When a company has resolved by special or extraordinary resolution to wind up voluntarily, it shall give notice of the resolution by advertisement in the Gazette.

Consequences of Ioluntary Il'inding Up.

" 186. The following consequences shall ensue on the voluntary winding up of a company : " (i) The property of the company shall be applied in satisfaction of its liabilities pan passit, and, subject thereto, shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company (ii) The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company, and may fix the remu neration to be paid to him or them : " (iii) On the appointment of a liquidator all the powers of the directors shall cease, except so far as the company in general meeting, or the liquidator, sanctions the continuance thereof : " (iv) The liquidator may, without the sanction of the Court, exercise all powers by this Act given to the liquidator in a winding up by the Court : " (v) The liquidator may exercise the powers of the Court under this Act of settling a list of contributories, and of making calls, and shall pay the debts of the company, and ad just the rights of the contributories among themselves : " (vi) The list of contributories shall be prima facie evidence of the liability of the persons named therein to be contributories : " (vii) When several liquidators are ap pointed, every power hereby given may be exercised by such one or more of them as may be determined at the time of their appointment, or in default of such determination by any number not less than two : " (viii) If from any cause whatever there is no liquidator acting, the Court may, on the application of a con tributory, appoint a liquidator : " (ix) The Court may, on cause shown, remove a liquidator, and appoint another liquidator."

The creditors have the right to apply to the Court for the appointment of a liquidator in the place of, or jointly with, the liquidator appointed by the company, or for the ap pointment of a committee of inspection.

As soon as the company's affairs are fully wound up, the liquidator shall lay an account of the winding up before a general meeting of the company. Within one week after the meeting the liquidator shall make a return to the registrar of companies of the holding of the meeting, and on the expiration of three months from the registration of the return the company shall be deemed to be dissolved, unless otherwise determined by the Court.

Saving for Rights of Creditors and butories.

" 197. The voluntary winding up of a com pany shall not bar the right of any creditor or contributory to have it wound up by the Court, if the Court is of opinion, in the case of an application by a creditor, that the rights of the creditor or, in the case of an application by a contributory, that the rights of the contributories will be pre judiced by a voluntary winding up." (See COMPANIES, WINDING Up.)