chapter 12 Flashcards
when a company may be wound up voluntarily?
A company may be wound up voluntarily
°If company in general meeting passes a resolution requiring voluntarily winding up:
-When period ,if any, fixed by articles expires; or
-where event, if any, occurs the occurrence of which AOA provides for dissolution;or
°if the company passes a special resolution that the company be wound up voluntarily
Winding up subject to supervision of court
°Where a company has passed resolution for voluntary winding up , court may make an order that it shall continue but under supervision of court with such terms and conditions as the court thinks just:
-of its own motion or
-on application of any person entitled to apply court for winding up
° Petition of continuance of voluntary winding up under supervision of court shall be deemed to be petition for winding up by court for purposes of legal proceedings
Petition to convert other modes to winding up by court
°Where a company is being wound up voluntarily or subject to the supervision of the court , a petition for its winding up by the Court may be presented by any person authorized to present petition of winding up by Court
°Court shall not make a winding up order unless it is satisfied that the voluntary winding up or winding up subject to the supervision of the Court cannot be continued for interests of the creditors or contributories or both or it is in the public interest to do so
Modes of winding up
The winding up of a company may be either
°By the court or
°Voluntary ; or
°Subject to supervision of the Court
definition of winding up
The proceedings by which a company is dissolved. The winding up of the company is also called liquidation of the company
Circumstances in which a company may be wound up by Court
CDDC ICICC SLAC CCCRM
A company may be wound up by the Court if:
° Company has, by special resolution, resolved to be wound up by the Court
° Default is made in holding statutory meeting or delivering statutory report to registrar
° Default is made in holding any 2 consecutive AGM
° Company has made a default in filing with registrar financial statements or annual returns for immediately preceding 2 consecutive financial years; or
°If number of members is reduced below 3 (public company) or 2 (private company)
° Company is unable to pay its debts; or
° It ceases to be a listed company, if was so.
° Court is of opinion that it is just and equitable that the company should be wound up; or
° Company ceases to have a member; or
° Sole business of the company is the licensed activity and the licence have been revoked
° Licence granted u/s 42 has been revoked or company has failed to comply requirements or
where liquidator of such a company has failed to complete the voluntary winding up
proceedings within 1 year from the date of commencement of winding up; or
° A listed company suspends its business for a whole year
° Company is
-Conceived, or brought forth for or carrying, unlawful or fraudulent activities; or
-Carrying on business prohibited or restricted by any law etc in force in Pakistan; or
-Conducting its business in a manner oppressive to the minority members (not less than
10% voting power) or persons concerned with formation or promotion of company; or
-Run and managed by persons who fail to maintain proper and true accounts, or commit
fraud, misfeasance or malfeasance in relation to the company; or
-Managed by persons who refuse to act according to requirements of MOA/AOA/this Act or failed to carry out directions of SECP/Registrar
Promotion or carrying on of which scheme shall be deemed to be unlawful
RAW
Promotion or carrying on of any of the following scheme shall be deemed to be unlawful
° Raising unauthorised deposits from general public, indulging in referral marketing, multi-level marketing (MLM), Pyramid and Ponzi Schemes, locally or internationally
°Any other business activity notified by SECP to be against public policy or a moral hazard
°Where in return of a deposit (in cash, coupons, certificates, tickets or other documents), a payment at future date or grant of property/right/benefit, determined by chance or lottery etc, is assured or promised
Company when deemed unable to pay its debts
III
° If a creditor, to whom the company is indebted in a sum exceeding Rs.100,000 has served a demand at registered office requiring company to pay amount; and company has neglected to pay/secure/compound it within 30 days to the satisfaction of creditor; or
° If court or any other competent authority orders in favour of creditor and still he remains unsatisfied (in full or in parts); or
° If, it is proved to the Court that company is unable to pay its debts, after considering the
contingent and prospective liabilities of the company.
