Grounds

Section 408 of the Companies and Allied Matters Act ("CAMA") provides that a Company may be wound up;

  1. If by a special resolution, the Company resolve to wind up the Company;
  2. Default in delivering statutory report to the Company's registry or holding a statutory meeting;
  3. The number of members of the Company reduce below 2;
  4. The Company is unable to pay its debts;
  5. The Court is of the Opinion that it is just and equitable to wind up the Company.

Procedure

The Petitioner shall file a winding up Petition. Rule 18 (1) of the Companies Rules provides that the Petitioner shall file an affidavit to verify the facts stated in the Petition within 4 days of filing the Petition. The affidavit shall be sufficient prima facie evidence of the statement in the Petition.

The Petitioner shall also file an application for advertisement of the Petition. Rule 4 of the Companies Rules provides that the application shall be by motion, notice of which shall be served on the persons which shall be served with the order within 5 days to the date of hearing of the application. 

Rules 20 of the Companies Rules provide that the Petition shall be advertised 15 clear days before the hearing of the Petition. The Court will direct that the Petition be advertised in the Gazette, in one national daily newspaper and one other newspaper circulating in the State of the principal place of business of the Company. After advertisement of the Petition and before the hearing date of the Petition, every contributory and creditor shall be furnished with a copy of the Petition.

Rules 21 of the Companies Rules provides that upon advertisement of the winding up Petition and upon filing an application by the creditor or contributory and affidavit of sufficient ground for the appointment of a Provisional Liquidator, the Court shall appoint a Provisional Liquidator and state the duty of the Liquidator.

Rules 23 and 24 of the Companies Rules provide that every person who intends to appear in the hearing of the Petition shall give notice of intention to the Petitioner. On the date of hearing, the Petitioner shall file a list of notice of intention of persons who desires to appear at the hearing of the Petition.

Rules 25 of the Companies Rules provide that persons who have issued notice of intention to appear on the hearing of the Petition shall file an affidavit in opposition to the Petition within 15 days after the Petition was advertised. The affidavit shall be served on the Petitioner or his Solicitor. The Petitioner shall file a reply to the affidavit in opposition to the Petition within 5 days of being served with the affidavit.

Rules 30 (1) of the Companies Rules provide that upon hearing of the Petition and affidavit in opposition to the Petition, the Court shall make an order within 28 days from the date of the hearing and the Petitioner shall advertise same in the Gazette and once in 2 national daily newspapers in which notice of Petition was previously advertised.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.