The members can also appoint 5 more members to the Committee appointed by the creditors. If the winding up finished on or after 1 Julythe liquidator is not required to convene a final meeting but must lodge Form End of administration return within one month after the end of the winding up.
The declaration of solvency has to be registered with the Registrar before convening a general meeting for voluntary winding up of the company.
If the report reveals that the affairs of the company were not conducted in a manner prejudicial to the interests of the members or public, the company is deemed to be dissolved from the date of submission of the report.
A meeting of the creditors should also be conducted either on the same day fixed for the General Meeting or on the next day of the General Meeting.
Separate meetings of creditors and contributories may decide to nominate a person for the appointment of liquidator and possibly of supervisory liquidation committee. If the report, on the other hand, contains any adverse remarks, the National Company Law Tribunal must direct the Official Liquidator to make further investigation into the affairs of the company.
Many people believe that Winding Up and Liquidating a company are basically the same thing but they are actually quite separate steps in the process of closing a company.
Effect of Winding Up Once the winding up process has begun, a company can no longer pursue its business. On an application of the Liquidator or contributory or creditor, it may determine any question arising in the winding up of a company and it may exercise, as respects the enforcing of calls, the staying of suits or other legal proceedings or any other matter, or any of the powers which the Court might exercise if the company were being wound up by the Court.
The meeting shall be called by advertisement specifying the time, place and object of the meeting and published not less than one month before the meeting in the Official Gazette, and also in some newspaper circulating in the district where the registered office of the company is situate.
The notice of the meeting should be sent by post to each creditor simultaneously with the sending of the notice for the general meeting.
A Declaration of Solvency should be made by the Directors. The OL on receiving the account and the return would make a scrutiny of the books and papers of the Company to ascertain as to whether the affairs of the Company has not been carried on in a manner prejudicial to the interest of its members or public, and makes a report to the concerned Tribunal.
Click here to lodge an enquiry. The court may dismiss the application if the petitioner unreasonably refrains from an alternative course of action.
Steps to winding up a solvent company Step 1 — Company directors must make a declaration of solvency To begin winding up a solvent company, a majority of the directors must make a Declaration of solvency Form If the stakeholders decide the company will face insurmountable challenges, they may call for a resolution to dissolve the organization.
If the company cannot meet all its liabilities on winding up, then the Company must be wound up by a Tribunal. The ROC on receiving the account and either the return or the return shall register them.
Passing of a resolution that the company be wound up voluntarily. Should anything be deemed false on the declaration, the legal consequences can be quite severe.
The decision to liquidate is made by a board resolution, but instigated by the director s. This article shall examine voluntary winding up mode only.
Voluntary liquidation[ edit ] Voluntary liquidation occurs when the members of a company resolve to voluntarily wind up its affairs and dissolve. The liquidation may come about: However, the corporate state and corporate powers of the company shall continue to till it is dissolved.
If a quorum i. Publish the resolution for voluntary winding up in the Gazette or circulating newspaper within 14 days of its being passed. To voluntarily liquidate your solvent company, follow these steps: If the company is insolvent, the shareholders may trigger a winding up to avoid bankruptcy or, in some cases, personal liability for the company's debts.
Final Meeting of the Members As soon as the affairs of the company are fully wound up, the Liquidator should call for a meeting of the members by giving an advertisement in the Official Gazette and in some newspapers circulating in the district where the Registered Office is situated.
VOLUNTARY WINDING UP OF A COMPANY IN TANZANIA. In Tanzania a company incorporated or registered under the Companies Act No. 12 of may be dissolved or deregistered in different ways and for different reasons. It is already stated that in a members’ voluntary winding up, the directors should make a Declaration of Solvency before 5 weeks from the date of the General Meeting in which a resolution to the effect is to be passed.
If they are unable to make a Declaration of Solvency within the time, the winding up shall be a creditors’ voluntary winding up and the winding up. (2) Creditor's voluntary winding up: under which no declaration of the firm's solvency is made but the firm must hold a meeting of creditors and submit to them the statement of its assets and liabilities as on the latest practicable date.
Creditors voluntary winding up takes place only when the company is in an insolvent condition and so it is unable to discharge its liabilities in full. Time for voluntary winding up commences immediately after passing of the resolution for voluntary winding up by the company.
Members’ Voluntary Winding Up (Sec. ) This happens when the company is solvent and capable of paying its liabilities in full but resolves to voluntarily wind up its business. The voluntary winding up of a company shall not be a bar to the right of any creditor of such company to have the same wound up by the Court, if the Court is of opinion that the rights of such creditor will be prejudiced by a voluntary winding up.Voluntary winding up of company