Effect of resolution-liquidation of companies, Financial Accounting

Effect of Resolution

The consequences of the resolution to wind up are:

1) The company must cease to carry on its business except so far as is necessary for the beneficial winding up thereof s.274

2) The corporate state and powers of the company continue until it is dissolved s.274,

3) A transfer of shares without the liquidators's sanction and any alteration in the status of the members is void s.275,

4) There is no automatic stay of proceedings against the company, but the court has a discretion to do so on the application of the liquidator or a creditor or contributory s.301

5) Invoices, letters, etc, must state that the company is being wound up s.329

6) The directors' powers cease, unless their continuance is sanctioned by the liquidator or the company in the case of a members' voluntary winding-up, or the creditors or the committee of inspection in the case of a creditors' voluntary winding-up ss.278, 290,

7) The company's employees are automatically dismissed if the company is insolvent (Fowler v Commercial Timber Co.); otherwise probably not.

Posted Date: 12/13/2012 2:39:24 AM | Location : United States

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