Circumstances 
in which com- 
pany may be 
wound up by 
court. 
Definition of in- 
ability to pay 
debts. 
Provisions as to 
applications for 
winding up. 
654 
SECRETARIAL PRACTICE 
Cases in which Company may be wound up by Court. 
168. A company may be wound up by the court if— 
(1) the company has by special resolution resolved that the 
company be wound up by the court: 
default is made in delivering the statutory report to the 
registrar or in holding the statutory meeting: 
the company does not commence its business within a year 
from its incorporation, or suspends its business for a whole 
year: 
the number of members is reduced, in the case of a private 
company, below two, or, in the case of any other company, 
below seven: 
(5) the company is unable to pay its debts: 
(6) the court is of opinion that it is just and equitable that 
the company should be wound up. 
169. A company shall be deemed to be unable to pay its debts— 
(1) if a creditor, by assignment or otherwise, to whom the 
company is indebted in a sum exceeding fifty pounds then 
due, has served on the company, by leaving it at the regis- 
tered office of the company, a demand under his hand 
requiring the company to pay the sum so due, and the 
company has for three weeks thereafter neglected to pay 
the sum, or to secure or compound for it to the reasonable 
satisfaction of the creditor; or 
if, in England or Northern Ireland, execution or other 
process issued on a judgment, decree or order of any court 
in favour of a creditor of the company is returned un- 
satisfied in whole or in part; or 
if, in Scotland, the inducie of a charge for payment on an 
extract decree, or an extract registered bond, or an extract 
registered protest have expired without payment being 
made; or 
if it is proved to the satisfaction of the court that the com- 
pany is unable to pay its debts, and, in determining whether 
a company is unable to pay its debts, the court shall take 
into account the contingent and prospective liabilities of 
the company. 
Petition for Winding Up and Effects thereof. 
~ 170.—(1) An application to the court for the winding up of a 
company shall be by petition, presented subject to the provisions 
of this section either by the company, or by any creditor or creditors 
(including any contingent or prospective creditor or creditors), 
contributory or contributories, or by all or any of those parties, 
together or separately: