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: