Compulsory Liquidation:

                                      A petition is presented to the High Court under s.218 of the Companies Act.  The petition will specify one of the seven grounds for compulsory winding up and be presented (usually) either by a creditor or by a member (called a "contributory" in the context of liquidation).

The seven standard grounds for compulsory winding up are listed in s.219 as follows-

(a)     the company has through special resolution resolved that it should be wound up by the court;

(b)     the company does not deliver the statutory report to the registrar or defaults in holding the statutory meeting;

(c)     the company has not originate its business within a year from its incorporation or has suspended its business for a whole year;

(d)    the company is unable to pay its debts; (see s.220).

(e)     the number of members of the company has reduced, in the case of a private company, under two or there may in the case of a public company, under seven;

(f)      the court considers that it is just and equitable to wind up the company. (see p.12).

(g)     so further in the case of a company incorporated outside Kenya and carrying on business in Kenya, liquidation proceedings have been commenced in respect of it in the country of its incorporation or territory in which it has established a place of business.