PART 3: PART 3: Winding Up
Section 1: Section 1: General
Article 56 - Alternative modes of winding up(1) The winding up of a
Companymay be either voluntary or by order of the QFC Court.(2) This Section relates to winding up generally, except where otherwise stated.
Article 57 - Powers of Liquidator(1) Any
Liquidatorappointed in a winding up shall have the powers set out in Schedule 1.(2) An officer of a Companywho:(A) fails to do whatever the Liquidatorreasonably requires the officer to do to assist in the winding up;(B) fails to comply with any reasonable direction given to the officer by the Liquidatorpursuant to his powers in Schedule 1; or(C) hinders or obstructs a Liquidatorin the performance of his powers or functionscommits a contravention and is liable to a financial penalty.(3) In this Article 57, an "officer" in relation to a Companymeans a person who is, or has been but is no longer, a director, a secretary, an employee involved in the management of the Company, an Administrator, a Supervisorin relation to an Arrangement, a Liquidatoror a provisional Liquidator.(4) A Liquidatormay exercise his powers under these Regulationsand other Regulationsin respect of any person in, or out of, the QFC.(5) In exercising such powers, the Liquidatorshall comply with local requirements relevant to the exercise of those powers including, where appropriate, informing or proceeding in collaboration with a local regulator or authority.
Section 2: Section 2: Voluntary Winding Up
Article 58 - Circumstances in which a Company may be wound up voluntarily
Companyshall be wound up voluntarily:(1) in such circumstances as may be provided for in the articles of the Company;(2) if the Companyresolves that it should be wound up voluntarily; or(3) if the Companyresolves that it cannot by reason of its liabilities continue its business, and that it is advisable to be wound up.
Article 59 - Notice of resolution to wind up
Companyhas passed a Resolution For Voluntary Winding Up, it shall, within 14 days after the passing of the resolution:(A) give notice of the resolution to the CROalong with a copy of the declaration of solvency prepared in accordance with Article 63; and(B) advertise the making of the resolution in a newspaper or newspapers, as the Liquidator thinks most appropriate, and this may include newspapers published outside the State.
Article 60 - Commencement of winding up
A voluntary winding up is deemed to commence at the time of the passing of the members'
Resolution For Voluntary Winding Up.
Article 61 - Effect on business and status of Company(1) In case of a voluntary winding up, the
Companyshall from the commencement of the winding up cease to carry on its business, except so far as may be required for its beneficial winding up.(2) However, the corporate state and corporate powers of the Company, notwithstanding anything to the contrary in its articles, continue until the Companyis dissolved.
Article 62 - Avoidance of share transfers and membership changes after winding up resolution
Any transfer of shares, not being a transfer made to or with the sanction of the
Liquidator, and any alteration in the status of the Company'smembers made after the commencement of a winding up, is void.
Article 63 - Declaration of solvency(1) Where it is proposed to wind up a
Companyvoluntarily, the directors (or, in the case of a Companyhaving more than two directors, the majority of them) may at a directors' meeting make a declaration to the effect that they have made a full inquiry into the Company'saffairs and that, having done so, they have formed the opinion that the Companywill be able to pay its debts in full within such period, not exceeding 12 months from the commencement of the winding up, as may be specified in the declaration.(2) Such a declaration must be made within the five weeks immediately preceding the date of the passing of the resolution for winding up, or on that date but before the passing of the resolution.(3) Where a director makes a declaration under this Article 63 without having reasonable grounds for the opinion that the Companywill be able to pay its debts in full, together with interest at the official rate, within the period specified, such director commits a contravention and is liable to a financial penalty.(4) If the Companyis wound up in pursuance of a resolution passed within five weeks after the making of the declaration, and its debts are not paid or provided for in full within the period specified, it is to be presumed (unless the contrary is shown) that the director did not have reasonable grounds for his opinion.
Article 64 - Distinction between 'Members' and 'Creditors' Voluntary Winding Up
A winding up in the case of which a directors' declaration under Article 63 has been made is a "
Members´ Voluntary Winding Up"; and a winding up in the case of which such a declaration has not been made is a " Creditors´ Voluntary Winding Up".
Section 2A: Section 2A: Members' Voluntary Winding Up
Article 64A - Application of this section
This section applies in relation to a Members' Voluntary Winding Up.
Article 65 - Appointment of Liquidator(1) In a Members' Voluntary Winding Up, the
Companyin general meeting shall appoint one or more Liquidatorsfor the purpose of winding up the Company'saffairs and distributing its assets.(2) On the appointment of a Liquidatorunder Article 65(1) all the powers of the directors cease, except so far as the Companyin general meeting or the Liquidatorsanctions their continuance.(3) In these Regulations:(A) a reference to the appointment of a Liquidatorincludes a reference to the appointment of a number of persons acting as the Liquidatorof a Company; and(B) if more than one person is acting as Liquidator, subject to an order of the QFC Courtto the contrary, all the functions of the Liquidatormay be exercised by any or all of persons appointed.
Article 66 - General Company meeting at each year's end(1) In the event of the winding up continuing for more than one year, the
Liquidatorshall summon a general meeting of the Companyat the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within three months from the end of the year or such longer period as the QFC Courtmay allow.(2) The Liquidatorshall lay before the meeting an account of his acts and dealings, and of the conduct of the winding up, during the preceding year.
Article 67 - Final meeting prior to dissolution(1) As soon as the
Company'saffairs are fully wound up, the Liquidatorshall make up an account of the winding up, showing how it has been conducted and the Company'sproperty has been disposed of, and thereupon shall call a general meeting of the Companyfor the purpose of laying before it the account, and giving an explanation of it.(2) The meeting shall be called by advertisement in such newspapers as the Liquidatorthinks most appropriate for ensuring that the meeting comes to the notice of the Company'screditors, which where appropriate may include newspapers published outside the State, specifying its time, place and object and published at least one month before the meeting.
Article 68 - Effect of Company's Insolvency(1) This Article applies where the
Liquidatoris of the opinion that the Companywill be unable to pay its debts in full within the period stated in the directors' declaration under Article 63.(2) The Liquidatorshall summon a meeting of creditors for a day not later than the 21st day after the day on which he formed that opinion, and send notices of the creditors' meeting to each creditor of whose address he is aware by post not less than 14 days before the day on which that meeting is to be held.(3) The Liquidatormust furnish creditors free of charge with such information concerning the affairs of the Companyas they may reasonably require, and the notice of the creditors' meeting shall state this duty.(4) The Liquidatorshall also make out a statement of the affairs of the Companyand lay that statement before the creditors' meeting.(5) The statement shall be verified by a statement of truth by the Liquidatorand shall show:(A) particulars of the Company'sassets, debts and liabilities;(B) the names and addresses of its creditors;(C) the Security Interestsheld by them respectively;(D) the dates when the Security Interestswere respectively given; and(E) such further or other information as may be prescribed.
Article 69 - Conversion to Creditors' Voluntary Winding Up
As from the day on which the creditors' meeting is held under Article 68 these
Regulationshave effect as if:(1) the directors' declaration under Article 63 had not been made; and(2) the creditors' meeting and the Companymeeting at which it was resolved that the Companybe wound up voluntarily were the meetings mentioned in Article 71
and accordingly the winding up becomes a
Creditors´ Voluntary Winding Up.
Section 3: Section 3: Creditors' Voluntary Winding Up
Article 70 - Application of this Section(1) Subject as follows, this Section applies in relation to a
Creditors´ Voluntary Winding Up.
Article 71 - Meeting of creditors(1) The
Companyshall:(A) cause a meeting of its creditors to be summoned for a day not later than the 21st day after the day on which there is to be held the Companymeeting at which the Resolution For Voluntary Winding Upis to be proposed;(B) cause the notices of the creditors' meeting to be distributed to the CRO, the QFC Authorityand all creditors of whose identity and address it is aware and published in an appropriate publication not less than seven days before the day on which that meeting is to be held; and(C) propose a person to act as Liquidatorof the Company.(2) The creditors may, at the creditors' meeting, nominate a person to be Liquidator.(3) In the case of different persons being nominated, the Liquidatorshall be the person nominated by the creditors.(4) The powers of the Liquidatornominated by the Companyshall not be exercised, except with the sanction of the QFC Court, during the period before the holding of the creditors' meeting.
Article 72 - Appointment of Creditors' Committee(1) The creditors at the meeting to be held under Article 71 or at any subsequent meeting may, if they think fit, appoint a committee of at least three and not more than five persons to exercise the functions conferred on it by or under these
Regulations.(2) If such a Creditors' Committeeis appointed, the Companymay, either at the meeting at which the Resolution For Voluntary Winding Upis passed or at any time subsequently in general meeting, appoint such number of persons, not exceeding five, as it thinks fit to act as members of the Creditors' Committee.(3) However, the creditors may, if they think fit, resolve that all or any of the persons so appointed by the Companyought not to be members of the Creditors' Committee; and if the creditors so resolve:(A) the persons mentioned in the resolution are not then, unless the QFC Courtotherwise directs, qualified to act as members of the Creditors' Committee; and(B) on any application to the QFC Courtunder this provision the QFC Courtmay, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.
Article 73 - Directors' powers
On the appointment of a
Liquidatorunder Article 71, all the powers of the directors cease, except so far as the Creditors' Committeeor, if no such committee was established, the creditors sanction their continuance.
Article 74 - Vacancy in office of Liquidator(1) If a vacancy occurs, by death, resignation or otherwise, in the office of a
Liquidator(other than a Liquidatorappointed by, or by the direction of, the QFC Court) the creditors may fill the vacancy.(2) A meeting of creditors to fill such vacancy may be convened by any creditor or, if there were more than one Liquidator, by the continuing Liquidators.
Article 75 - Progress report to the Company and creditors' at year's end(1) If the winding up continues for more than one year, the
Liquidatormust produce a progress report for a period of one year commencing on the date on which the Liquidator is appointed and every subsequent period of one year. The Liquidatormust send a copy of the progress report within two months of the end of the period covered by the report to the CRO, members of the Companyand each creditor of whose address the Liquidatoris aware.(2) The progress report shall contain the following information:(A) full details of the Company'sname, address of registered office and registered number;(B) full details of each Liquidator'sname and address and date of appointment, including any changes in office-holder;(C) details of the basis fixed for the remuneration of the Liquidator(or if not fixed at the date of the report, the steps taken during the period of the report to fix it);(D) if the basis of the remuneration has been fixed, a statement of (i) remuneration charged by the Liquidatorduring the period of the report and (ii) where the report is the first to be made after the basis has been fixed, the remuneration charged by the Liquidatorduring the periods covered by the previous periods, together with a description of the things done by the Liquidatorduring those periods in respect of which remuneration was charged, irrespective of whether payment was made during that period;(E) a statement of expenses incurred by the Liquidatorduring the period of the report, irrespective of whether payment was made during that period;(F) details of progress during the period of the report, including a receipts and payments account;(G) details of any assets that remain to be realised;(H) a statement of creditor's right to challenge the Liquidator's remuneration and expenses under Article 138; and(I) any other relevant information for creditors.(3) A progress report is not required for any period which ends after any meeting is called in accordance with Article 76.
Article 76 - Final meeting prior to dissolution
As soon as the
Company'saffairs are fully wound up, the Liquidatorshall make up an account of the winding up, showing how it has been conducted and the Company'sproperty has been disposed of, and thereupon shall call a general meeting of the Companyand a meeting of the creditors for the purpose of laying the account before the meetings and giving an explanation of it.
Section 4: Section 4: Compulsory Winding Up
Article 77 - Circumstances in which Company may be wound up by the QFC Court
Companymay be wound up by the QFC Courtif:(1) the Companyhas resolved that the Companybe wound up by the QFC Court;(2) the Companyis unable to pay its debts;(3) the Companydoes not commence its business within a year of its incorporation, or suspends its business for a whole year; or(4) the QFC Authoritymakes any application under Article 80 and the QFC Courtis of the opinion that it is just and equitable that the Companyshould be wound up.
Article 78 - Definition of inability to pay debts(1) A
Companyis deemed unable to pay its debts:(A) if a creditor to whom the Companyis indebted in a sum exceeding US$2,000.00 then due has served on the Companya written demand requiring the Companyto pay the sum so due and the Companyhas for three weeks thereafter neglected to pay the sum or to agree terms in relation to its payment to the reasonable satisfaction of the creditor; or(B) if it is proved to the satisfaction of the QFC Courtthat the Companyis unable to pay its debts as they fall due.(2) A Companyis also deemed unable to pay its debts if it is proved to the satisfaction of the QFC Courtthat the value of the Company'sassets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.
Article 79 - Application for winding up
Subject to any provision of or under
Regulationsto the contrary, an application to the QFC Courtfor the winding up of a Companymay be made by the Company, or all or a majority of the directors, or by any creditor or creditors (including any contingent or prospective creditor or creditors).
Article 80 - Application for winding up on grounds of interests of the QFC
Where it appears to the
QFC Authoritythat it is expedient in the interests of the QFCthat a Companyshould be wound up, it may make an application for the Companyto be wound up under Article 77(4).
Article 81 - Voiding of property dispositions and alteration of membership
In a winding up by the
QFC Court, any disposition of the Company'sproperty, and any transfer of shares, or alteration in the status of the Company'smembers, made after the commencement of the winding up is, unless the QFC Courtotherwise orders, void.
Article 82 - Consequences of winding-up order(1) When a winding-up order has been made, no action or proceeding shall be proceeded with or commenced against the
Companyor its property, except by leave of the QFC Courtand subject to such terms as the QFC Courtmay impose.(2) On the making of a winding-up order, a copy of the order must forthwith be forwarded to the CROby the Company.
Article 83 - Choice of Liquidator at meetings of creditors and contributories(1) Where the
QFC Courtorders that a Companybe wound up, the QFC Courtshall identify in the order the person who is to act as Liquidatorof the Company, and that person shall take office immediately upon the order being made. That person shall within 21 days summon meetings of the Company'screditors and contributories for the purpose of choosing a person to be Liquidatorof the Companyin his place.(2) The remuneration and any expenses properly incurred by the person appointed by the QFC Courtunder Article 83(1) shall be a first charge on and paid out of any property arising from the exercise of his functions as Liquidatorand which is in his custody or under his control at that time.(3) The creditors and the contributories at their respective meetings may nominate a person to be Liquidator.(4) The Liquidatorshall be the person nominated by the creditors or, where no person has been so nominated, the person (if any) nominated by the contributories.(5) In the case of different persons being nominated, any shareholder or other person liable to contribute to the assets of the Companyor creditor may, within seven days after the date on which the nomination was made by the creditors, apply to the QFC Courtfor an order either:(A) appointing the person nominated as Liquidatorby the contributories to be a Liquidatorinstead of, or jointly with, the person nominated by the creditors; or(B) appointing some other person to be Liquidatorinstead of the person nominated by the creditors.
Article 83A - Directors' powers
On the appointment of any
Liquidatorunder Article 83, all the powers of the directors cease, except so far as the Liquidatorsanctions their continuance.
Article 84 - Appointment of provisional Liquidator(1) The
QFC Courtmay, at any time after the making of a winding up application, and with a view to the preservation of the Company'sbusiness and assets, appoint a Liquidatorprovisionally and upon such terms as the QFC Courtsees fit. The powers of such a Liquidatormay be limited by the order appointing him.(2) The remuneration and any expenses properly incurred by a provisional Liquidatorshall be a first charge on and paid out of any property arising from the exercise of his functions as provisional Liquidatorand which is in his custody or under his control at that time.
Article 85 - Creditors Committee
The creditors at the meeting to be held under Article 83 or at any subsequent meeting may, if they think fit, appoint a
Creditors' Committeeof at least three and not more than five persons to exercise the functions conferred on it by or under these Regulations.
Article 86 - Power to stay winding up
QFC Courtmay at any time after an order for winding up, on the application either of the Liquidatoror any creditor or shareholder or other person liable to contribute to the assets of the Company, and on proof to the satisfaction of the QFC Courtthat all proceedings in the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the QFC Courtthinks fit.