Page 355 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes
Ms. Justice Finlay Geoghan stated that there were two separate circumstances in which the
court might determine that the balance of justice was against proceeding with an application
under Section 150, namely:

1. where the delay would put a just hearing at risk; and
2. where the delay would represent a breach of the respondent’s constitutional right to
fair procedures.

In examining the latter ground, the Judge gave consideration to the mandatory five year
restriction period under Section 150 and the shift in the onus of proof onto the respondent
directors.
Question
Do you agree to the justice of the court? Justify.

Source: http://www.hg.org/articles/article_1162.html, Published July 11, 2005 By: A&L Goodbody

14.6 Summary

The winding up or liquidation of a company is the process whereby its life is ended and its
property administrated for the benefit of its creditors and members.
The term contributory means every person liable to contribute to the assets of a company
in the event of its being wound up, and includes the holder of fully-paid up shares.

A company may be wound up in three ways which are Compulsory winding up under an
order of the court, Voluntary winding up and Voluntary winding up under the supervision
of the court.
In the event of winding up, certain payments are to rank in priority to others. The payments
to be so made first are called preferential payments.
The order of priority in paying off debts in a winding up shall be: (i) Workmen’s dues and
debts due to secured creditors, (ii) Costs and expenses of winding up, (iii) Preferential
debts, (iv) Floating charge; and (v) Unsecured creditors
In case of winding up of a company for realising and distributing assets among the debenture
holders, creditors, shareholders etc. somebody has to act as agent of company which is
called liquidator.
After the winding up procedure is completed, the company is dissolved.

A company is said to be dissolved when it ceases to exist as a corporate body.

14.7 Keywords

Contributory: It means any person who is liable to contribute to the assets of a company in the
event of its being would up.

Dissolution: A company is said to be dissolved when it ceases to exist as a corporate body for all
practical purposes.
Liquidator: In case of winding up of a company for realising and distributing assets among the
debenture holders, creditors, shareholders etc. somebody has to act as agent of company which
is called liquidator.

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