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Winding up by the Court

company, pay, debts and unable

WINDING UP BY THE COURT. A winding up by the Court is often called a compulsory liquidation.

Where the paid-up capital does not exceed l:,10,000 proceedings for a winding up may be taken in the County Court, unless the Lord Chancellor has excluded it from having jurisdiction. The Metropolitan County Courts are not included, as they have no jurisdiction in winding up. Where the capital exceeds ;10,000, proceedings must be taken in the High Court, or, if the regis tered office of the company is situated within the jurisdiction of the Chancery Courts of the Counties Palatine of Lancaster and Dur ham, in the Palatine Court or High Court.

Section 129 of the Companies (Con solidation) Act, 1908, details the circum stances in which a company may be wound up by the Court : " 129. A company may be wound up by the Court " (i) if the company has by special resolu tion resolved that the company be wound up by the Court : " (ii) if default is made in filing the statu tory report or in holding the statutory meeting : " (iii) if the company does not commence its business within a year from its incorporation, or suspends its busi ness for a whole year : " (iv) if the number of members is reduced, in the case of a private company, below two, or, in the case of any other company, below seven : " (v) if the company is unable to pay its debts : "(vi) if the Court is of opinion that it is just and equitable that the company should be wound up.

Company when Deemed Unable to Pay its Debts.

"130. A company shall be deemed to be unable to pay its debts " 231 " if a creditor, by assignment or other wise, to whom the company is indebted in a sum exceeding fifty pounds then due, has served on the company, by leaving the same at its registered office, a demand under his hand requiring the company to pay the sum so due, and the com pany has for three weeks there after neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor ; or " (ii) if, in England or Ireland, execution or other process issued on a judg ment decree or order of any Court in favour of a creditor of the com pany is returned unsatisfied in whole or in part ; or " (iii) if, in Scotland, the inducim of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest have expired without payment being made ; or " (iv) if it is proved to the satisfaction of the Court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the Court shall take into account the contin gent and prospective liabilities of the company." (See COMPANIES, WINDING 1:P.1