Voluntary Winding Up
Voluntary winding up
Members’ Voluntary Winding up
This is when the shareholders of a company decide to put the company by way of a special resolution under liquidation and there are enough assets to pay all the debts i.e. the company is solvent.
• Declaration of solvency sworn by majority of the directors in the presence of a Commissioner of Oaths.
• Call a meeting and pass a special resolution for winding up and appointment of a liquidator within thirty days (30) from the date of filing Declaration of solvency.
• The liquidator must be a qualified Insolvency Practitioner. An insolvency practitioner is either a lawyer, an accountant or a chartered secretary who is a registered member of the relevant professional body.
• Register the special resolution with the Registrar within 7 days from date of passing and send a copy to the Official Receiver.
• Give notice of the resolution in the gazette and in a newspaper of wide circulation within 14 days of passing the resolution.
• File notice with the registrar and deliver copy to the Official receiver.
• Then the liquidator takes over; (see What the Liquidator does)
• After completion of Liquidation, the Liquidator shall;
1. Prepare a Final Report and account of the liquidation. See Form 26
2. Call for a general meeting to present the account and give any required explanation. The meeting shall be called thirty days before holding the meeting. He shall then File a copy of the account and make a return of the meeting and its date to the registrar within 14 days.
• Three months from the date of registration of the return, the company shall be deemed dissolved.
Effect of Liquidation
1. A company shall from the commencement of voluntary liquidation, cease to carry on business, except so far as may be required for the beneficial liquidation of the company.
2. Subject to the above provision, the corporate status and powers of the company shall, notwithstanding anything contrary in its articles, continue until dissolved.
3. Any transfers of shares, not being a transfer made to or with the sanction of the liquidator and any alteration in the status of the members of the company, made after the commencement of the voluntary liquidation is void.