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compulsory winding up

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › compulsory winding up

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by MikeLittle.
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  • January 5, 2022 at 8:59 am #645326
    MichelleJ
    Member
    • Topics: 26
    • Replies: 17
    • ☆

    Are these statements of mine is true:

    1) Shareholders can petition to have a company compulsorily wound up. (correct?)

    2) Members of the company cannot petition to have a company compulsorily wound up (correct?)

    January 13, 2022 at 9:09 am #645819
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22705
    • ☆☆☆☆☆

    There sounds to be a bit of confusion in your understanding here. For our intents and purposes, there really is no difference between ‘members’ and ‘shareholders’

    The simple answer to your question is, therefore, it’s not possible for BOTH statements to be correct since they are diametrically opposite in the availability of members / shareholders to make this petition

    Where a majority of not less than 75% of members pass a special resolution to the effect that the company should approach the Court and ask for a compulsory winding up order, then in that case, we can validly say that the members CAN petition the Court and, as I have stated above, if you accept that members and shareholders are effectively synonyms, then we can safely say y=that shareholders CAN petion the Court

    OK?

    January 13, 2022 at 11:28 am #645852
    MichelleJ
    Member
    • Topics: 26
    • Replies: 17
    • ☆

    There is two MCQ in the specimen exam which confused me related to my previous query above!

    Q1) Section 122 insolvency act 1986 specifically provides a distinct ground for applying to have a company wound up on the ground that it is just and equitable to do so.

    Which of the following parties may petition to have a company compulsorily wound up under that provision?

    a) Shareholders of the company
    b) Creditors of the company
    c) Debentureholders of the company
    d) The secretary of state

    Q2) Which of the following cannot petition for the compulsorily winding up of a company on the grounds of insolvency under 122 insolvency act 1986?

    a) The board of directors
    b) The members of the company
    c) The company’s creditors
    d) The secretary of state

    You can find this specimen exam using this link https://www.accaglobal.com/us/en/student/exam-support-resources/fundamentals-exams-study-resources/f4/lw-specimen-exams/eng-specimen-exam.html

    January 13, 2022 at 12:03 pm #645860
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22705
    • ☆☆☆☆☆

    Michelle, you’re missing two very important elements from your post!

    There is, within the first question, the specified situation of “on the ground that it is just and equitable to do so” and, in the second, there is the situation “on the grounds of insolvency”

    These two (out of 5 subsections of the Insolvency Act) identify those persons that are able and those that are precluded from initiating a winding-up petition

    OK

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