- 5 Marks
Question
State FIVE (5) grounds that may lead to the winding up of a company pursuant to the provisions of Bodies Corporate (Official Liquidation Act, 1963, Act 180). (5 marks)
Answer
The following are grounds that may lead to the winding up of a company under the Bodies Corporate (Official Liquidations) Act, 1963, Act 180:
- Failure to Commence Business: Within one year from the date of incorporation, the company fails to carry on all of its authorized business.
- Suspension of Business: The company suspends any of its authorized business for a whole year.
- Lack of Members: The company has no members.
- Unlawful Business: The business or objects of the company are unlawful.
- Illegal Operation: The company is being operated for an illegal purpose. When a company carries on illegal activities, it is sometimes said to be engaged in fraudulent trading. A company formed or operating to defraud others may be wound up.
- Unauthorized Business: The business being carried on by the company is not authorized by its Regulations.
- Inability to Pay Debts: The company is unable to pay its debts. However, if the debt is genuinely disputed, the company may not be wound up.
- Just and Equitable Grounds: Finally, the court may issue a winding-up order if it is of the opinion that it is just and equitable that the company be wound up.
(Any 5 points @ 1 mark each = 5 marks)
- Tags: Company Law, Insolvency, Liquidation, Official Liquidation Act, Winding-up
- Level: Level 1
- Uploader: Dotse