Court Winding Up

An action for the dissolution and winding up of a company may be filed in court for various reasons, such as in the case of insolvency. A Court Winding Up application may be filed by:

  1. The company itself following a decision of the General Meeting or the Board of Directors;
  2. A shareholder;
  3. A Creditor/s;
  4. The Registrar of Companies;
  5. The Official Receiver

A company MAY be dissolved and wound up by the Court:

  1. If an extraordinary resolution for Dissolution and consequent Winding Up by the Court is passed (Art 214(1)(a));
  2. If the business of the company is suspended for an uninterrupted period of twenty-four months (Art 214(2)(a)(i));
  3. If the company is unable to pay its debts (Art 214(2)(a)(ii))

A company SHALL be dissolved by the Court and wound up either voluntarily or by the Court:

  1. If there are less than 2 members for more than 6 months (does not apply to single member companies);
  2. If there are less than 2 Directors in public companies or 1 in private companies;
  3. If there are grounds of sufficient gravity;
  4. If the period fixed for the duration of the company expires

An application in terms of 1 above may be made by the company following a decision of the General Meeting, or by its board of Directors, or by any debenture holder, Creditor or Creditors, or by any contributory or contributories.

An application in terms of 2 to 7 may be made by the abovementioned and also by any shareholder or Director of the company.

An application in terms of 6 and 7 may be made by the abovementioned and also by the Registrar if it is expedient and in the public interest.

The court will consider the application, and in the process, it shall consider the views of all the interested parties. In the interim, before arriving at a decision whether to dissolve the company or otherwise, it may provide for  the appointment of a Provisional Administrator who would take over the overall administration of the company’s business, oversee and preserve the assets of the company and  prevent anyone from taking any unfair priority or advantage. The Court also has the authority, before deciding whether to dissolve the Company or otherwise, to stay any procedures against the company (Art 220 of the Companies Act). When the company is insolvent the Directors have an obligation towards creditors. Any prejudice to their rights may lead to serious consequences, including personal liability, fines and in cases where there is deliberate fraud, even imprisonment. Therefore, in brief during the Winding Up process, the Court will:

  • Consider any preliminary pleas;
  • Allow the parties to bring forward evidence in accordance with their application;
  • Allow the Directors, company secretary, contributories, or Creditors to make submissions upon their request;
  • Allow the lawyers to make final submissions;
  • Decide the case;
  • Appoint a liquidator;
  • Appoint sittings to monitor the Winding Up procedure;
  • Approve the scheme of distribution, if any;
  • Release the liquidator of his appointment as soon as the Court is satisfied that he has completed his task;
  • Order the Registrar to strike off the name of the company from the Register

Following an order by the Court for the Dissolution of the Company, the powers of the Directors cease and representation of the company becomes solely vested in the liquidator (Art 295 of the Companies Act).


This document does not purport to give legal, financial or any other advice. Please be directed to seek appropriate advice from warranted professionals. Do not hesitate to contact the Office of the Official Receiver for further information if necessary or for any clarification.

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