1. Dissolution A Co. may be dissolved by, 1.Cancellation of registration,
2.Removal of name
3.Order of court without W-up
4.W-up

2. Company collapse

3. Inadequate capital

4. Inadequate control over working capital

5. fraud

6. Modes of winding up
267. (1) The winding up of a company may be either –
(a) by the court;
(b) voluntary; or
(c) subject to the supervision of the court.

7. Reasons for corporate collapse cont….
Management inexperienced and incompetence
Management shortcomings
Accountancy failings
Unable to respond to change

8. W-up, introduction
Winding – up is a terminal form of administration of the affairs of a company, for usually the winding – up of a company will lead to its dissolution, which is, effectively, the death of a company.

9. Winding – up is a process whereby the assets of a company are collected and realized, the resulting proceeds are applied in discharging all its debts and liabilities, and any balance is distributed among the members;
it is process which prepares the company for its death, which is known as dissolution.
In a broad sense, winding –up is the bankruptcy of a company.

10. W-up is Formal
Company cannot wind-up informally. The law governing liquidation is essentially the product of statutory enactment, that is the Companies Act No.07 of 2007, and winding – up can only proceed according to the terms of that Act

11. Reasons for winding-up
If the company is insolvent the creditors wish to have its assets applied in payment of debts that are due to them.
Sometimes the company is solvent and the members cause it to be wound up in order to realize the investment represented by their share or interest in the property of the company.
As a scheme for amalgamation with some other company or enterprise.
As a result of oppression or mismanagement in the affairs of the company

12. The Purposes of Winding
Providing a procedure that allows for an equitable and fair distribution of the debtor company amongst its creditors.
Winding-up serves the community at large as it is not good for society that companies who are insolvent are able to continue to trade.

13. Liquidation is designed to allow for an investigation of the company’s affairs by an independent and appropriately qualified person
Investigations during the winding-up may reveal improper or dishonest conduct by officers of the company and any unfair dispositions of property.
To prepare companies for the end of their existence by eventual dissolution.

14. In a w-up ,a liquidator is appointed,
He takes possession of the Co,s assets
He collects the assets
Pays the cost of the w-up and the creditors
And distribute any surplus among the members
The Co. is then dissolved until it is so dissolved its corporate state continues,
However the powers of directors ceased.

15. Powers of liquidator to enforce liability of shareholders and former shareholders
268. (1) The liquidator may –
(a) if a shareholder is liable to call, make calls on the shares held by that shareholder;
(b) if a shareholder or former shareholder is otherwise liable to the company, enforce that liability.

16. Modes of W-up 267. (1) The winding up of a company may be either –
(a) by the court;
(b) voluntary; or
(c) subject to the supervision of the court.

17. Compulsory W-up
An application for the winding up of a company shall be by petition presented (subject to the provisions) to the court

18. CASES WHICH COMPANY MAY BE WOUND UP BY THE COURT
(a) the company has by special resolution resolved that the company be wound up by the court;
(b) the company does not commence its business within a year from its incorporation or suspends it business for one year;
(c) if the number of the members falls below the minimum number required under subsection (2)of section 4 of this Act;

19. Ground for compulsory W-up Cont………
(d) the company has no directors;
(e) the company is unable to pay its debts; or
(f) the court is of opinion that it is just and equitable that the company should be wound up.

20. Just &equitable Where the objects of the co.are fraudulant
The co. is a babble
The company is in substance a partnership and there are grounds to dissolved partnership
Where thereis a dead lock in the co.

21. Inability to pay debts
If The co.is unable to settle a sum exceeding Rs. 50,000/=within 3 weeks of making such a demand by a creditor.
If a judgment is entered against the co,in favor of the creditor of the co. and the co. is unable to satisfy such judgment in whole or in part.
If it is proved to the satisfaction of court that the co. is unable to pay its debts.

22. Who may file a petition by the company
by any creditor or creditors (including any contingent or prospective creditor or creditors),
By any contributory or contributories, or by all or any of those parties, jointly or separately.
Registrar may present a winding-up petition in the case of a company referred to in subsection (3) of section 177.

23. contributory shall not be entitled to present a winding-up petition unless –
(i) the number of members falls below the minimum number required under subsection (2) of section 4 of this Act; or
(ii) the shares in respect of which he is a contributory or some of them, either were originally allotted to him or have been held by him and registered in his name, or at least six months during the eighteen months immediately preceding the date or commencement of the winding up or have developed on him through the death of a former holder

24. 273 Powers of court on hearing petition
the court may dismiss it or
Adjourn the hearing conditionally or unconditionally or
Make any interim order or any other order that it thinks fit,

25. Power to stay or restrain proceedings against a company
274. At any time after the presentation of a winding-up petition, and before a winding-up order has been make, the company or any creditor or contributory may make an application to the court having jurisdiction to wind up the company, to restrain further proceedings in such action or proceeding, and the court to which application is to make may, as the case may be, stay or restrain the proceedings accordingly on such terms as it thinks fit.

26. Avoidance of disposition of property & c
Avoidance of disposition of property & c. after commencement of winding up  
275. In a winding up by the court, any disposition of the property of the company, including things in action and any transfer of shares or alteration in the status of the members of the company made after the commencement of the winding up, shall unless the court otherwise orders, be void.

27. COMMENCEMENT OF WINDING UP
Where before the presentation of a petition for the winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution and unless the court, on proof of fraud or mistake thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.
In any other case, the winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up.

28. VOLUNTARY WINDING UP A company may be wound up voluntarily –
(a) when the period if any, fixed for the duration of the company by the articles expires or the event if any, occurs on the occurrence of which the articles provide that the company is to be dissolved, and the company at a general meeting has passed a ordinary resolution requiring the company to be wound up voluntarily
(b) where the company resolves by special resolution that the company be wound up voluntarily;
(c) when the company resolves by special resolution to the effect that it cannot by reason of its liabilities continue its business and that it is advisable to wind up.

29. 324.DECLARATION OF SOLVENCY
Where it is proposed to wind up a company voluntarily, the directors of the company or in the case of a company having more than two directors the majority of the directors may at a meeting of the directors, make a statutory declaration to the effect that they have made a full inquiry into the affairs of the company and that they are of the opinion that the company will be able to pay its debts in full within such period not exceeding twelve months, from the date of commencement of the winding up as may be specified in the declaration

30. a shareholders’/creditors’ voluntary winding up
A winding up in the case of which a declaration has been made and delivered in accordance with the provisions of this section, is in this Act referred to as “a shareholders’ voluntary winding up”, and a winding up in the case of which a declaration has not been so made and delivered, is in this Act referred to as “a creditors’ voluntary winding up”.

31. WINDING UP SUBJECT TO SUPERVISION OF COURT
351. When a company has passed a resolution for voluntary winding up, the court may make an order that the voluntary winding up shall continue but subject to such supervision of the court, and with such liberty for creditors, contributories or others to apply to the court, and generally on such terms and conditions as the court thinks just.

32. PROOF AND RANKING OF CLAIMS
Admissible claims
356. A debt liability present or future, certain or contingent, whether it is an ascertained debt or liability or a liability for damages, may be admitted as a claim against a company in liquidation.

33. Rights and duties of secured creditors
385 (1)

34. 385 (1) A secured creditor may
(a) seize, attach and realize, issue execution against or appoint a receive in respect of property subject to a charge, if entitled to do so;
(b) value the property subject to the charge and claim in the liquidation – (i) as a secured creditor for the amount of his claim, up to the value of the security; and (ii) as an unsecured creditor for the balance due, if any; or
(c) surrender the charge to the liquidator for the general benefit of creditors, and claim in the liquidation as an unsecured creditor for the whole debt.

35. Distribution of assests

36. Secured creditors with fix charge.
W-up cost (=remuneration of the liquidator)
Preferential debts
Creditors with floating charges
Unsecured creditors
Debts due to members as members
Repayment of paid up capital
Surplus to members