Chapter 13 - Introduction to Companies Winding Up

Question 1

COMPANIES WINDING UP

Overview

Answer 1

1) What is winding up
2) Types of winding up
3) Fighting winding up

Question 2

COMPANIES WINDING UP

What is winding up

Answer 2

• The winding-up of a company is the process in which the company is brought to an end.
• During the process, the assets of a company are liquidated (meaning they are likely sold off for money) and distributed to the company’s creditors.
• Shareholders would usually receive part of the company’s assets if at liquidation, the value of the company’s assets exceed the liabilities of the company.
• The effect of the winding up order is that the business of the company is terminated and all the affairs of the winding up company shall be governed by a Liquidator.

Question 3

COMPANIES WINDING UP

Types of winding up

Answer 3

1) Voluntary winding up, i.e. by creditors or members

2) Compulsory winding up / winding up by the court

Question 4

COMPANIES WINDING UP

Voluntary winding up - what & types

Answer 4

WHAT:

• Voluntary winding up/liquidation is a formal winding up process initiated by the director(s) and shareholder(s) of the company.
• This process does not involve the Court.

TYPES:

• Member’s voluntary winding up (MVW)
• Creditor’s voluntary winding up (CVW)

Question 5

COMPANIES WINDING UP

Compulsory winding up - what

Answer 5

• winding up by the court under certain circumstances lay down in S.465.

Question 6

COMPANIES WINDING UP

Fighting winding up - overview

Answer 6

1) Fortuna Injunction

2) Opposing winding up petition during hearing