STUDY UNIT 12 PART 2 & 3 Flashcards
SECURITY FOR COSTS:
a party applying for winding-up must give sufficient security for payment of all fees and charges.
MASTER’S REPORT:
-s346(4)
before presenting his application to the court, the applicant must serve a copy to the Master, who may report to the court any facts which he has ascertained which may justify postponing or dismissing the application.
NOTIFICATION OF CERTAIN INTERESTED PARTIES s346(4A)(a)(i)-(iv)
-every registered trade union representing the employees
-the employees
-SARS
-the company, unless the application was made by the company.
MEMBERS’ VOLUNTARY WINDING-UP:
can take place only if a company is able to pay its debts in full.
-in terms of s350(1), a resolution to proceed to a members’ voluntary winding-up is void unless, prior to the registration of the resolution, either:
-security is furnished to the Master’s satisfaction for the payment of the debts of the company within 12 months from the commencement of the winding-up
-the Master dispenses with the security on production of both an affidavit by the direction of the company that it has no debts, and a certificate from the auditor of the company, that to his best belief and knowledge, and according to the records of the company, it has no debts.
Winding-up establishes a…
winding-up establishes a concursus creditorum, which aims at ensuing that the company’s property is collected and distributed among the creditors in their order of preference.
NOTICE OF WINDING-UP:
the Master, must upon receipt of the winding-up order, give notice in the Government Gazette, and transmit copies to certain sheriffs and Registrars of deeds.
-a company that has passed a resolution for its voluntary winding-up must within 28 days after registration, give notice on the GG and lodge a certified copy of the resolution to the Master together:
-in the case of members’ voluntary winding-up: a certified copy of a passed resolution of the company nominating a liquidator.
-in a creditors’ voluntary resolution: two certified copies of the statement of affairs of the company.
WHAT IS A LIQUIDATOR:
A liquidator is a person who has legal authority to act on behalf of a company before it closes.
PERSON’S DISQUALIFIED FROM BEING A LIQUIDATOR:
-an insolvent
-a minor or any person under legal disability
-a person declared incapable of being a liquidator due to dishonesty
-a person removed from an office of trust by a court
-a person convicted of fraud, perjury, forgery whose imprisonment does not have the option of a fine or fine is exceeding R20
-a person who by reward induced any person to vote or nominate him
-a person who worked as a director, officer or auditor of the company 12 months prior to the winding-up
-a body corporate
-a person residing outside of South Africa
-an agent who is authorized to vote for or on behalf of a creditor in a meeting who acts under such authority.
APPOINTMENT OF LIQUIDATOR:
the Master must appoint a liquidator:
-in the case of a members’ voluntary winding-up, the person is nominated in the resolution
-in the case of a creditors’ voluntary winding-up and winding-up by a court, the person is nominated in the first meeting of creditors and initial meeting of members
the Master may decline to appoint a nominee who was:
-not properly nominated
-disqualified from being appointed
-who failed to give security timeously
REMOVAL OF THE LIQUIDATOR:
the Master may remove a liquidator if he:
-was not qualified or became disqualified.
-has not performed his duties satisfactorily
-his estate has become insolvent, or he has become mentally or physically incapable
-if majority in number and in value of the creditors or members, has requested the Master in writing
-if the Master is of the opinion that the liquidator is no longer suitable
DUTIES OF THE LIQUIDATOR:
- General function
- Providing information
- Keeping records
- Bank account and investment
- Exposure of offences
- Report to creditors
- Liquidation and distribution account
- Distribution of assets
GENERAL FUNCTIONS:
-The liquidator must take possession of all movable and immovable property of the company.
-The liquidator must realize the property in a prescribed manner
-The liquidator must fulfil the mandate received from a particular creditor
-The liquidator must, when administering the assets of the company, have regard to any directions given by the resolution of the creditors or members
-The liquidator must be seen detached, independent, impartial and even handed in his dealings with the parties interested in the winding-up
IMPEACHABLE TRANSACTIONS:
in terms o section 340(1) of the Companies Act,
-if a company is wound up and is unable to pay all its debts, every disposition by a company of its property may be set aside.
-if the disposition was made by an individual, who became insolvent, it may be set aside.
