Page 354 - DMGT407Corporate and Business Laws

Unit 14: Winding up and Dissolution of a Company

collected and liabilities paid as far as practicable); or (ii) the liquidator cannot proceed Notes
with the winding up for want of funds and assets or for any other reasons whatever; or
(iii) it is just and reasonable in the circumstance of the case that an order of dissolution of
the company should be made.
On making of the order of dissolution, the company shall be dissolved from the date of the
order [s. 48 (1)]. The official liquidator shall file a copy of the order of dissolution within
30 days of making of the order (s.497).

2. In case of members’ voluntary winding up (s.497): As soon as the official liquidator, after
scrutinizing the books, accounts and papers of the company, makes a report to the court
that the affairs of the company have not been conducted in a manner prejudicial to the
interest of its members or to public interest, then from the date of the submission of the
report to the court, the company shall be deemed to be dissolved. Where the liquidator
reports that, the affairs have not been so conducted, the court shall direct him to make
further investigation and submit his second report to the court and may order that the
company shall stand dissolved from a date specified in that order [s.497(b)].
3. In case of creditors voluntary winding up (s.509): Same as above [s.509(6)]. The court can,
however, declare the dissolution void within 2 years.
When a company has been dissolved according to due process of law, except when such dissolution
is under s.560, on the expiry of 5 years from the date of dissolution of the company, the name of
the company should be struck off the register of companies after noting against its name that it
has been dissolved. Thus in case of defunct companies, dissolution and extinction takes place at
the same time but in other cases extinction follows 5 years after.

Self Assessment

Fill in the blanks:
13. A ……………..company means a company which has never commenced business or which
is not carrying on business.
14. The company is kept, after dissolution, in ‘suspended animation’ for ……….years.
15. The official liquidator shall file a copy of the order of dissolution within ……….days of
making of the order

Case Study David Hughes v Seamus Duffy and Eugene Hanratty,
19 April 2005, High Court

Facts: This case was taken under Section 150 of the Companies Act 1990, by the Official
Liquidator of the Supreme Oil Company Limited. Section 150 provides for a prohibition
or restriction of persons acting as company directors for a period of five years.
The respondents sought to have the application dismissed or refused by reason of the
delay in bringing the application. The order winding the company up was made in
November 1991 but the application under Section 150 was not made until December 2003.
The High Court applied the principles set down by the Supreme Court in Duignan v
Carway [2001] 4 IR 550 in deciding whether to dismiss the application on grounds of
delay.
Contd...

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