Consequences of Winding Up Essay Example for Free

Consequences of Winding Up EssayThe liquidator has no power to carry on vocation with a view to resuscitating the play along or making profits. The liquidator shall carry on the business of the comp whatever principally to enable the business to be sold off as a going concern. 2. A transfer of shares may be carried out only with the sanction of the liquidator. In effect, the membership of the follow is quick-frozen once twisting up commences. 3. The directors and certain other officers of the conjunction are under a employment to assist and cooperate with the liquidator. 4 4.Where the conjunction has either bought property from or sold property to a person who was at the cadence of the accomplishment a director of the comp any(prenominal) for cash consideration and the transaction occurred within 2 years before the commencement of the winding up, the lodge may recover any amount by which the property was overvalued or undervalued. 5. Where the company has gone into li quidation within 6 months of the existence of a floating charge, that charge is void except to cover the amount of cash advanced to the company at the time of creation or subsequently, together with interest at 5% per annum.The liquidator(s) appointed upon the winding up of the company to manage the affairs of the company for the purpose of the liquidation shall 1. investigate the affairs and assets of the company as well as the conduct of its directors and other related persons 2. recover and realise the companys assets at the best possible price and in a manner that is to the best advantage to the company and 3. adjudicate the claims of all creditors and to ensure an equitable distribution of the companys assets. Distribution of AssetsThe companys property is to be applied in satisfaction of its liabilities upon winding up, and the surplus distributed among the members according to their rights and interests in the company. Secured creditors consider not prove for their debts bu t can realise their security and obtain full satisfaction. Once the secured creditors eat up been paid out of the assets that comprise their securities, the remainder of the assets, if any, will be distributed among the preferred creditors. The order of priority is as follows . Costs and expenses of the winding up. 2. Wages and salaries of the employees of the company. 3. Retrenchment benefit or ex-gratia payment (if any) due to the employees of the company. 4. Compensation for injuries suffered in the course of employment under the Workmens Compensation Act (Cap 354). 5. Provident fund contributions payable in the 12 months next before, on or subsequently the commencement of the winding up under any written law or under any approved scheme of superannuation or loneliness benefits. . Remuneration payable in respect of vacation leave accrued before or after the commencement of the winding up. 7. All taxes assessed before the commencement of the winding up or before the time fixed for the proving of debts has expired. Any residue remaining after payment of the creditors is divisible among the members in accordance with the companys Memorandum and Articles of Association.