WINDING UP

255

case of a company not being wound up, if there is due from
a shareholder to the company £100 in respect of calls, while
the company owes the shareholder [75 for goods supplied,
both transactions may properly be closed by the shareholder
paying £25 to the company. But in winding up the rule is
different. A contributory cannot set off a debt due to him
from the company against money due from him to the com-
pany in his capacity of contributory, e.g. for calls. He must
first pay what, as a contributory, he owes the company,
since the company’s assets must be realised, and then his
position will be that of a creditor of the company who is
entitled to be paid with the other creditors, in full if funds
permit, but otherwise to receive a dividend. Any other rule
would give preferential treatment to the contributory who,
by the accident of circumstances, is also a creditor of the
company. However, when the contributory is a bankrupt,
set-off is allowed. Thus, the liquidator, seeking to prove in
the bankruptcy for calls due, must first deduct from the
amount of the calls the amount owing from the company, and
prove for the balance. And conversely, where the debt due
from the company exceeds the amount of the calls, set-off is
allowed and the balance due to the bankrupt’s estate may be
proved for in the winding up. But when all the creditors of a
company are paid in full, any sum due to a contributory from
the company on any account whatever may be allowed to
him by way of set-off against any subsequent calls [s. 205 (3)].
A joint debt cannot be set off against a separate debt [In re
Pennington and Owen, Ltd. (1925), 41 T.L.R. 657].

Some of the incidental duties of the liquidator which he
may have been called upon to perform before all the assets
have been realised, require a passing notice. It may be
necessary or desirable for him to summon general meetings
of the company from time to time. S. 248 (1) of the Act em-
powers him to do so for the purpose of obtaining the sanction
of the company by special resolution or extraordinary resolu-
tion, or for any other purpose he may think fit. There may
often be important steps in the winding up upon which the
liquidator may deem it advisable to take the opinion of the
company before acting. When a meeting is to be called,
the liquidator will summon it in the usual way by notices
in writing stating the objects of the meeting. Ss. 235 and
244 make it incumbent upon the liquidator, in all cases where
the winding up continues for more than a year, to summon
a general meeting of the company at the end of the first and
of every subsequent year from the commencement of the
winding up; and at every such meeting he must lay before the

Meetings in
Liquidation.