• Section 4: Section 4: Compulsory Winding Up

    • Article 77 - Circumstances in which Company may be wound up by the QFC Court

      A Company may be wound up by the QFC Court if:

      (1) the Company has resolved that the Company be wound up by the QFC Court;
      (2) the Company is unable to pay its debts;
      (3) the Company does not commence its business within a year of its incorporation, or suspends its business for a whole year; or
      (4) the QFC Authority makes any application under Article 80 and the QFC Court is of the opinion that it is just and equitable that the Company should be wound up.

    • Article 78 - Definition of inability to pay debts

      (1) A Company is deemed unable to pay its debts:
      (A) if a creditor to whom the Company is indebted in a sum exceeding US$2,000.00 then due has served on the Company a written demand requiring the Company to pay the sum so due and the Company has 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 Court that the Company is unable to pay its debts as they fall due.
      (2) A Company is also deemed unable to pay its debts if it is proved to the satisfaction of the QFC Court that the value of the Company's assets 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 Regulations to the contrary, an application to the QFC Court for the winding up of a Company may 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 Authority that it is expedient in the interests of the QFC that a Company should be wound up, it may make an application for the Company to 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's property, and any transfer of shares, or alteration in the status of the Company's members, made after the commencement of the winding up is, unless the QFC Court otherwise 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 Company or its property, except by leave of the QFC Court and subject to such terms as the QFC Court may impose.
      (2) On the making of a winding-up order, a copy of the order must forthwith be forwarded to the CRO by the Company.

    • Article 83 - Choice of Liquidator at meetings of creditors and contributories

      (1) Where the QFC Court orders that a Company be wound up, the QFC Court shall identify in the order the person who is to act as Liquidator of 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's creditors and contributories for the purpose of choosing a person to be Liquidator of the Company in his place.
      (2) The remuneration and any expenses properly incurred by the person appointed by the QFC Court under Article 83(1) shall be a first charge on and paid out of any property arising from the exercise of his functions as Liquidator and 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 Liquidator shall 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 Company or creditor may, within seven days after the date on which the nomination was made by the creditors, apply to the QFC Court for an order either:
      (A) appointing the person nominated as Liquidator by the contributories to be a Liquidator instead of, or jointly with, the person nominated by the creditors; or
      (B) appointing some other person to be Liquidator instead of the person nominated by the creditors.

    • Article 83A - Directors' powers

      On the appointment of any Liquidator under Article 83, all the powers of the directors cease, except so far as the Liquidator sanctions their continuance.

    • Article 84 - Appointment of provisional Liquidator

      (1) The QFC Court may, at any time after the making of a winding up application, and with a view to the preservation of the Company's business and assets, appoint a Liquidator provisionally and upon such terms as the QFC Court sees fit. The powers of such a Liquidator may be limited by the order appointing him.
      (2) The remuneration and any expenses properly incurred by a provisional Liquidator shall be a first charge on and paid out of any property arising from the exercise of his functions as provisional Liquidator and 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' Committee of 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

      The QFC Court may at any time after an order for winding up, on the application either of the Liquidator or 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 Court that 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 Court thinks fit.