Effect of winding up order-liquidation of companies, Financial Accounting

Effect of Winding-up Order

The consequences of a winding-up order are:

1) Any disposition of the company's property and any transfer of shares is void, unless the court otherwise orders s.224: this provision "relates back" to the commencement of the winding up, i.e., the date of presentation of the petition, or, if the company has previously passed a resolution to wind up voluntarily, the date of that resolution s.226,

2) Any attachment, execution or distress against the property of the company after the commencement of the winding up is void s.225,

3) No legal proceedings may be begun or continued against the company without leave of the court s.228,

4) The O.R. becomes provisional liquidator (contrast provisional liquidator in note e above) until a liquidator is appointed s.236, and may apply to the court for the appointment of a special manager to carry on business of the company pending the appointment of a liquidator s.258,

5) Every invoice, order or business letter on which the company's name appears must state that the company is being wound up s.329,

6) The company's employees are automatically dismissed, and the director's powers are terminated.

Posted Date: 12/13/2012 2:20:15 AM | Location : United States

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