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Describe with the aid of examples, the authorities, representative bodies or persons that exercise some form of authority over the winding up process of a company in each of the type of winding up recognized by the Companies Act 1995.

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Describe with the aid of examples, the authorities, representative bodies or persons that exercise some form of authority over the winding up process of a company in each of the type of winding up recognized by the Companies Act 1995. Winding up is a term commonly associated with the ending of a company's existence1. The purpose of a winding up process is "to ensure that before the company's existence ceases, all its affairs are dealt with, which means removing the company from all its legal relationships. Its contracts must be completed, transferred or otherwise brought to an end; it must cease carrying on business; its liabilities must be met as far as possible and lastly the legal proceedings to which it is party must be determined2." On liquidation, the directors of the company lose all powers of management and any transactions undertaken by the company after the commencement of the liquidation are void. The company gives up its business, sells off its assets, pays its debts or if it is insolvent does so to the extent that its funds allow and distributes whatever surplus remains against its shareholders or otherwise as its memorandum and articles of association may provide. The process of winding up is placed in the hands of a liquidator. The different types of winding up 'Compulsory winding up' is a type of winding up done by the Court. The liquidation results from the Court making an order that the company shall be wound up. Upon the making up of a winding up order:- * the custody and control of all the property in action of the company are transferred from those persons who were entitled under the memorandum and articles to manage its affairs and on its behalf, to a liquidator charged with the legal duty of dealing with the company's assets in accordance with the statutory scheme. Any disposition of the property of the company otherwise than by the liquidator is void. ...read more.


Apart from those liquidations under the control of the Official Receiver, the liquidator is responsible for the entire process that ends with the striking-off of the company from the register. The persons eligible to act as liquidators are advocates, certified public accountants and auditors, and any person registered with the Registrar as fit and proper to exercise the functions of the liquidator. Liquidation provides the opportunity to examine and where appropriate, set aside transactions undertaken by the company shortly before liquidation. If for example, shortly before going into insolvent liquidation, the company paid only one creditor in full, that creditor will have benefited at the expense of the other unpaid creditors. In this case, the liquidator may have such transactions set aside to ensure equal treatment of all creditors, and where the company was conducted fraudulently or incompetently, he will be able to seek a contribution to the assets of the company from those responsible. Liquidators in a Winding Up by the Court Art.230 deals with the choice of a liquidator at the meetings of creditors and contributories summoned for that purpose. The creditors and the contributories hold separate meetings and each meeting may nominate a person to be a liquidator and the creditor's nomination prevails if different persons are nominated. If the creditors fail to nominate a person, the person nominated by the contributories shall be the liquidator. If neither creditors nor contributories nominate a liquidator, the official receiver will make an application to the Court for an appointment of a liquidator11. Art.231 (1) states that the liquidator has to fix the dates for the meetings of the creditors and the contributories and summon them. According to Art.235, where a person other than the official receiver is appointed liquidator, it is necessary for such person to notify the Registrar of his appointment in order for him to be capable of acting as liquidator. ...read more.


He must summon such meetings if he is at any time requested to do so by one-fourth in value of the company's creditors21. Art.234 (1) states that the official receiver shall before the first meeting, send to each creditor and each contributory, a summary of the statement of affairs, including the causes of the failure, any observations which the official receiver may think it fit to make. However, failure to send such summary, or failure of its being received before the meeting will not invalidate the proceedings at the meeting. In this assignment I only focused on the 'provisional administrator', the 'official receiver' and the 'liquidator' as the persons who in my opinion exercise the most authority in the winding up process. The creditors, contributories especially exercise some form of control in the liquidation process but due to limited space and time, I could not go into their powers. Reference: * Chapter 386 Laws of Malta; Companies Act, 1995. Theses: * Abela Christine, Dissolution and Winding Up of a Limited Liability Company, LL D 1995. * Chetcuti-Ganado Andrew, The Winding up of the Companies by the Court, LL D 1997. * Galea Monica, The Company Liquidator LL D 1999. 1 Galea Monica's thesis, pg. 1 2 Mayson, French & Ryan on Company law, 15th edition 1998/99, pg. 664. 3 Art.226 (1), Companies Act 4 Art.226 (2), Companies Act 5 Art.226 (3), Companies Act 6 Art.218 (4), Companies Act, 1995 7 Galea Monica's thesis, pg. 11 8 Abela Christine's thesis, pg.88 9 Galea Monica's thesis, introduction pg. C 10 Corte di Cassazione, 6.1.81, n.52. 11 Art.230 (4), Companies Act, 1995 12 Art.240, Companies Act 1995 13 Art.272 (1), Companies Act 1995 14 Art.272 (2), Companies Act 1995 15 Art.273, Companies Act 1995 16 Art.225 (1), Companies Act 17 Art.226 (1) & (2), Companies Act 18 Proviso to Art.260 (6), Companies act 1995. 19 Abela Christine's thesis, pg.88 20 Art.229 (3), Companies Act, 1995 21 Art.229 (4), Companies Act, 1995 ...read more.

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