Bankruptcy, Individual Voluntary Arrangement and Winding-up of Companies
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G. Grounds for making a winding-up order

What does the Court consider in deciding whether or not a winding up order should be made?

The usual circumstances under which the Court would make a winding-up order are:

  1. the company itself has, by a special resolution of the members (subscribers or shareholders), resolved that the company be wound up by the Court;
  2. the company does not commence its business within a year from its date of incorporation, or suspends its business for a whole year;
  3. the company has no subscriber or no shareholder;
  4. the company is unable to pay its debts;
  5. an event occurs on the occurrence of which the company's memorandum or articles of association provides that the company is to be dissolved; or
  6. the Court is of an opinion that it is just and equitable (reasonable) to do so. A winding-up order may also be made if it is proved that the affairs of the company have been conducted in a manner unfairly and prejudicial to the interest of some shareholders of the company, or its shareholders generally.

In considering these grounds, the Court will usually take into account the circumstances of the company including whether it is insolvent and whether there is an alternative solution to the dispute, such as buying out the shares of a disgruntled/dissatisfied shareholder.

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