- This topic has 5 replies, 2 voices, and was last updated 5 years ago by
.
- Posts
Which one of the following is not a ground for the Court to order a compulsory winding-up against Marjorie plc?
two of the original three directors resigned seven months ago and the remaining director has been unsuccesful trying to find suitable replacements
Albert, the only surviving member of the company, has just celebrated his 60th birthday
Majorie plc has been unable since incorporation 2 years ago to complete an application for a trading certificate
Marjorie plc suspended business operations ago
———————–
Correct answer is two of the original three directors resigned.
I’m confused as I thought one remaining director in a plc would make that director personally responsible for the company only, and was not grounds for a compulsory winding up? In addition, I don’t understand why ‘Albert, the only surviving member of the company, has just celebrated his 60th birthday’ is a ground for a compulsory winding-up? A member is a shareholder, and the minimum shareholders of a plc is 1, so I do not see the problem? (clearly I have something wrong)
Thanks in advance!
The question asks for “What ISN’T a ground for a Court to grant a winding-up order” and Albert, being a sole member is not a problem – the Court will not order the liquidation of Marjorie plc just because Albert is now the only shareholder
A public company (this is a difference between public and private companies) needs 2 directors, so the Court WOULD likely deem that the company should be wound up where there is only one remaining director. Whereas this is not, in itself, a statutory ground, the Court would likely call upon the “just and equitable” statutory ground to grant a winding-up order
OK?
Thanks for the reply Mike, I really appreciate the response, but I’m still confused and I don’t think the answer to the question makes any sense. Please allow me to explain why.
The question asks which one of the following IS NOT a ground for a compulsory winding up. The test shows the correct answer is “two of the original three directors resigned seven months ago and the remaining director has been unsuccesful trying to find suitable replacements”.
To me, this indicates the other options ARE grounds for a winding up as they are not the option, If the question is which is not, and three answers are not selected, it stands they by must in fact be?
As such, it implies Albert being the member IS grounds for a winding up, and you’ve just explained this is not true?
You’re right – in fact my earlier response confirmed that you’re right
The correct choice should be Albert and not the two directors retiring
Thanks for pointing this out – where’s the question from? Is it chapter tests?
Thanks! I believe it was on the practice exam on OT. One of the questions that when I went back to review at the end I didn’t agree with.
I will post the location if I find this on the individual quizzes though.
- You must be logged in to reply to this topic.