• a22162

Creditors’ Voluntary Winding Up

Updated: Sep 30, 2019

A company may be wound up voluntarily if the company so resolves by special resolution.

A company shall —

(a) within 7 days after the passing of a resolution for voluntary winding up, lodge a copy of the resolution with the Registrar; and

(b) within 10 days after the passing of the resolution, give notice of the resolution in one or more newspapers circulating in Singapore.


Provisional liquidator


Where the directors of a company have made a statutory declaration which has been lodged with the Official Receiver and have lodged a declaration with the Registrar —

(a) that the company cannot by reason of its liabilities continue its business; and

(b) that meetings of the company and of its creditors have been summoned for a date within one month of the date of the declaration,

the directors shall immediately appoint an approved liquidator to be the provisional liquidator.


A provisional liquidator shall have and may exercise all the functions and powers of a liquidator in a creditors’ winding up.


The appointment of a provisional liquidator shall continue for one month from the date of his appointment or for such further period as the Official Receiver may allow in any particular case or until the appointment of a liquidator, whichever first occurs.


Notice of the appointment of a provisional liquidator together with a copy of the declaration lodged with the Official Receiver shall be advertised within 14 days of the appointment of the provisional liquidator in at least 4 local daily newspapers, one each published in the English, Malay, Chinese and Tamil languages.


A provisional liquidator shall be entitled to receive such salary or remuneration by way of percentage.

Commencement of voluntary winding up


A voluntary winding up shall commence —


(a) where a provisional liquidator has been appointed before the resolution for voluntary winding up was passed, at the time when the declaration was lodged with the Registrar; and


(b) in any other case, at the time of the passing of the resolution for voluntary winding up.


Effect of voluntary winding up


The company shall from the commencement of the winding up cease to carry on its business, except so far as is in the opinion of the liquidator required for the beneficial winding up thereof, but the corporate state and corporate powers of the company shall continue until it is dissolved.


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 members made after the commencement of the winding up, shall be void.


Meeting of creditors


The company shall cause a meeting of the creditors of the company to be summoned for the day, or the day next following the day, on which there is to be held the meeting at which the resolution for voluntary winding up is to be proposed, and shall cause the notices of the meeting of creditors to be sent by post to the creditors simultaneously with the sending of the notices of the meeting of the company.


The company shall convene the meeting at a time and place convenient to the majority in value of the creditors and shall —


(a) give to the creditors at least 7 clear days’ notice by post of the meeting; and


(b) send to each creditor with the notice, a statement showing the names of all creditors and the amounts of their claims.


The company shall cause notice of the meeting of the creditors to be advertised at least 7 days before the date of the meeting in a newspaper circulating in Singapore.


The directors of the company shall —


(a) cause a full statement of the company’s affairs showing in respect of assets the method and manner in which the valuation of the assets was arrived at, together with a list of the creditors and the estimated amount of their claims to be laid before the meeting of creditors; and


(b) appoint one of their number to attend the meeting.


The director so appointed and the secretary shall attend the meeting and disclose to the meeting the company’s affairs and the circumstances leading up to the proposed winding up.


If the winding up continues for more than one year, the liquidator shall summon a general meeting of the company and the creditors at the end of the first year from the commencement of the winding up and of each succeeding year or not more than 3 months thereafter, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year.


Liquidator


The company shall, and the creditors may at their respective meetings, nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company, and if the creditors and the company nominate different persons the person nominated by the creditors shall be liquidator, and if no person is nominated by the creditors the person nominated by the company shall be liquidator.


The creditors may fix the remuneration to be paid to the liquidator.


The liquidator shall cause the notices of the meeting of creditors to be sent by post to the creditors simultaneously with the sending of the notices of the meeting of the company.


On the appointment of a liquidator all the powers of the directors shall cease, except so far as the creditors approve the continuance.


Property and proceedings


Any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of a creditors’ voluntary winding up shall be void.

After the commencement of the winding up no action or proceeding shall be proceeded with or commenced against the company.


Distribution of property of company


Subject to the provisions as to preferential payments, the property of a company shall, on its winding up, be applied pari passu in satisfaction of its liabilities and shall be distributed among the members according to their rights and interests in the company.


Annual meeting of creditors


If the winding up continues for more than one year, the liquidator shall summon a general meeting of the company and the creditors at the end of the first year from the commencement of the winding up and of each succeeding year or not more than 3 months thereafter, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year.


The liquidator shall cause the notices of the meeting of creditors to be sent by post to the creditors simultaneously with the sending of the notices of the meeting of the company.


Final meeting and dissolution


As soon as the affairs of the company are fully wound up, the liquidator shall make up an account showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon shall call a meeting of the company and the creditors for the purpose of laying before it the account and giving any explanation.


The meeting shall be called by advertisement published in at least 4 local daily newspapers, one each in the English, Malay, Chinese and Tamil languages which advertisement shall specify the time, place and object of the meeting and shall be published at least one month before the meeting.


The liquidator shall within 7 days after the meeting lodge with the Registrar and the Official Receiver a return of the holding of the meeting and of its date with a copy of the account attached to such return.


The quorum at a meeting of the company and the creditors shall be 2 members and 2 creditors and if a quorum is not present at the meeting, the liquidator shall in lieu of the return lodge a return (with account attached) that the meeting was duly summoned and that no quorum was present, and upon such a return being lodged the lodging of the return shall be deemed to have been complied with.


On the expiration of 3 months after the lodging of the return with the Registrar and with the Official Receiver, the company shall be dissolved.


Arrangement when binding on creditors


Any arrangement entered into between a company about to be or in the course of being wound up and its creditors shall be binding on the company if sanctioned by a special resolution, and on the creditors if acceded to by 75% in value and 50% in number of the creditors, every creditor for under $50 being reckoned in value only.


A creditor shall be accounted a creditor for value for such sum as upon an account fairly stated, after allowing the value of security or liens held by him and the amount of any debt or set-off owing by him to the debtor, appears to be the balance due to him.


Costs


All proper costs, charges and expenses of and incidental to the winding up including the remuneration of the liquidator shall be payable out of the assets of the company in priority to all other claims.


Notice of appointment and address of liquidator


A liquidator shall, within 14 days after his appointment, lodge with the Registrar and with the Official Receiver notice of his appointment and of the situation of his office.


Liquidator’s accounts


Every liquidator shall, within one month after the expiration of a period of 6 months from the date of his appointment and of every subsequent period of 6 months, lodge with the Official Receiver and verified by statutory declaration an account of his receipts and payments and a statement of the position in the winding up.


The liquidator shall —


(a) give notice that the account has been made up to every creditor and contributory when next forwarding any report, notice of meeting, notice of call or dividend; and


(b) in such notice inform the creditors and contributories at what address and between what hours the account may be inspected.


Notification that a company is in liquidation


Where a company is being wound up every invoice, order for goods or business letter issued by or on behalf of the company or a liquidator of the company or a receiver or manager of the property of the company, being a document on or in which the name of the company appears, shall have the words “in liquidation” added after the name of the company where it first appears.


Books and papers of company and liquidator


When a company has been wound up the liquidator shall retain all the books and papers of the company and of the liquidator that are relevant to the affairs of the company for a period of 5 years from the date of dissolution of the company and at the expiration of that period may destroy them.


Expenses of winding up where assets insufficient


A liquidator shall not be liable to incur any expense in relation to the winding up of a company unless there are sufficient available assets.


The Official Receiver may, on the application of a creditor or a contributory, direct a liquidator to incur a particular expense on condition that the creditor or contributory indemnifies the liquidator in respect of the recovery of the amount expended and, if the Official Receiver so directs, gives such security to secure the amount of the indemnity as the Official Receiver thinks reasonable.




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