It can take account of personal relationships of mutual trust and confidence in small parties, particularly, for example, where there is a breach of an understanding that all of the members may participate in the business, or of an implied obligation to participate in management. Ī "just and equitable" winding-up enables the grounds to subject the strict legal rights of the shareholders to equitable considerations. Īn order will not generally be made if the purpose of the application is to enforce payment of a debt which is bona fide disputed. In practice, the vast majority of compulsory winding-up applications are made under one of the last two grounds. It is just and equitable to wind up the company, as for an example specified by an Insolvency Act.The company is unable to pay its debts as they fall due.The number of members has fallen below the minimum prescribed by statute.It has not commenced business within the statutorily prescribed time (normally one year) of its incorporation, or has not carried on business for a statutorily prescribed amount of time.one that has not re-registered as a public company or become a private company under more recent companies legislation requiring this)
DEFINE LIQUIDATION REGISTRATION
The company was incorporated as a corporation, and has not been issued with a trading certificate (or equivalent) within 12 months of registration.The grounds upon which an entity can apply to the court for an order of compulsory liquidation also vary between jurisdictions, but normally include: A government minister, usually the one responsible for competition and business.Contributories: Those shareholders be required to contribute to the company's assets on liquidation.Any creditor which establishes a prima facie case.The parties which are entitled by law to petition for the compulsory liquidation of a company vary from jurisdiction to jurisdiction, but generally, a petition may be lodged with the court for the compulsory liquidation of a company by: For efficiency's sake, it will often sell these at a discount to a company specializing in real estate liquidation instead of becoming involved in an area it may lack sufficient expertise in to operate with maximum profitability. For instance, a retail chain may wish to close some of its stores. The term "liquidation" is also sometimes used informally to describe a company seeking to divest of some of its assets.
Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation or receivership following bankruptcy, which may result in the court creating a "liquidation trust") or voluntary (sometimes referred to as a shareholders' liquidation, although some voluntary liquidations are controlled by the creditors). The process of liquidation also arises when customs, an authority or agency in a country responsible for collecting and safeguarding customs duties, determines the final computation or ascertainment of the duties or drawback accruing on an entry.
Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation. The assets and property of the company are redistributed. Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries.
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