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Part XV 

Winding up of Companies

 

 

Chapter 1

Preliminary

 

 

Modes of Winding Up

 

 

401.    (1)         The winding up of a company may be effected -

 

(a)             by the court; or

 

(b)             voluntarily; or

 

(c)             subject to the supervision of the court.

 

  (2)          The provisions of this Decree with respect to winding up shall apply, unless the contrary appears, to the winding up of a company in any of those modes.

 

 

Contributories

 

 

402.         In the event of a company being wound up, every present and past member shall be liable to contribute to the assets of the company as provided in section 92 of this Decree.

 

403.         The term "contributory" means every person liable to contribute to the assets of a company in the event of its being wound up and for the purposes of all proceedings for determining and all proceedings prior to the final determination of the persons who are to be deemed contributories, the expression shall include any person alleged to be a contributory.

 

404.         The liability of a contributory shall create a debt of the nature of a specialty accruing and due from him the time when his liability commenced, but payable at the times when calls are made for enforcing the liability.

 

405.    (1)         If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives and his heirs and devises, shall be liable in due course of administration to contribute to the assets of the company in discharge of his liability and they shall be contributories accordingly.

 

  (2)          Where the personal representatives are placed on the list of contributories, the heirs or devisees need not be added; but they may be added as and when the court thinks fit.

 

  (3)          If the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the whole or any part of the estate of the deceased contributory, and for compelling payment out of it of the money due.

 

406.  (1)         If a contributory becomes bankrupt, either before or after he has been placed on the list of contributories, then-

 

(a)             his trustee in bankruptcy shall represent him for all the purposes of the winding up, and shall be a contributory accordingly, and may be called on to admit to proof against the estate of the bankrupt, or otherwise to allow to be paid out of his assets in due course of law, any money due from the bankrupt in respect of his liability to contribute to the assets of the company; and

 

(b)             there may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as already made.

 

  (2)          The provisions of this section shall extend and apply with all necessary changes to the case of an insolvent person.

 

 

Chapter 2 

Winding up by the Court

 

Jurisdiction

 

 

407.   (1)         The court having jurisdiction to wind up a company shall be the Federal High Court within whose area of jurisdiction the registered office or head office of the company is situate.

 

  (2)          For the purpose of this section, "registered office or head office" means the place which has longest been the registered office or head office of the company during the 6 months immediately preceding the presentation of the petition for winding up.

 

Cases in which company may be wound up by Court

 

408.         A company may be wound up by the court if -

 

(a)             the company has by special resolution resolved that the company be wound up by the court;

 

(b)             default is made in delivering the statutory report to the Commission or in holding the statutory meeting;

 

(c)             the number of members is reduced below two;

 

(d)             the company is unable to pay its debts;

 

(e)             the court is of opinion that it is just and equitable that the company should be wound up.

 

409.         A Company shall be deemed to be unable to pay its debts if -

 

(a)             a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding 2,000 then due has served on the company, by leaving it at its registered office or head office, 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

 

(b)             execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or

 

(c)             the court, after taking into account any contingent or prospective liability of the company is satisfied that the company is unable to pay its debts.

 

 

Petitions for winding up and effects thereof

 

 

410.   (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 -

 

(a)             the company;

 

(b)             a creditor, including a contingent or prospective creditor of the company;

 

(c)             the official receiver;

 

(d)             a contributory;

 

(e)             a trustee in bankruptcy to, or a personal representative of a creditor or contributory;

 

(f)             the Commission under section 323 of this Decree;

 

(g)             a receiver if authorised by the instrument under which he was appointed; or

 

(h)             by all or any of those parties, together or separately.

 

  (2)          Notwithstanding anything in subsection (1) of this section -

 

(a)             a contributory shall not be entitled to present a petition for winding up a company unless -

 

(i)             the number of members is reduced below two; or

 

(ii)             the shares in respect of which he is contributory or some of them, were originally allotted to him or have been held by him, and registered in his name, for at least 6 months during the eighteen months before the commencement of the winding up, or have devolved on him through the death of a former holder;

 

(b)             a winding up petition shall not, if the ground of the petition is default in delivering the statutory report to the Commission or in holding the statutory meeting, be presented by any person except a shareholder, or before the expiration of 14 days after the last day on which the meeting should have been held;

 

(c)             the court shall not hear a winding up petition presented by a contingent or prospective creditor until sufficient security for costs has been given, and a prima facie case for winding up has been established to its satisfaction;

 

(d)             in any case falling within section 320 or 321 of this Decree (proceedings on inspector's reports) or paragraph (e) of section 408 of this Decree, a winding up petition may be presented by the Commission with the approval of the Attorney-General of the Federation.

 

  (3)          Where a company is being wound up voluntarily or subject to supervision, a winding up petition may be presented by the official receiver attached to the court, as well as by any other person authorised in that behalf under the other provisions of this section; but the court shall not make a winding up order on any such petition unless it is satisfied that the voluntary winding up or winding up subject to supervision cannot be continued with due regard to the interests of the creditors or contributories.

 

  (4)          A contributory shall be entitled to present a winding up petition notwithstanding that there may not be assets available on the winding up for distribution to contributories.

 

411.    (1)         On hearing a winding up petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other order that it thinks fit; but the court shall not refuse to make a winding up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.

 

  (2)          Unless it appears to the court that some other remedy is available and that the petitioners are acting unreasonably in seeking a winding up order instead of pursuing that remedy, the court, on hearing a petition by contributory members of a company for relief by winding up on the ground that it would be just and equitable so to do, shall make the order as prayed if of opinion that the petitioners are entitled to the relief sought.

 

  (3)          Where a petition is presented on the ground of default in delivering the statutory report to the Commission or in holding the statutory meeting, the court instead of making a winding up order, may direct the delivery of the statutory report or the holding of a meeting as the case may require, and order the costs to be paid by the persons who, ion the opinion of the court, are responsible for the default.

 

412.         Where a winding up petition has been presented and an action or other proceeding against a company is instituted or pending in any court (in this section referred to as "the court concerned"), the company or any creditor or contributory may, before the making of the winding up order, apply to the court concerned for an order staying proceedings; and the court concerned may, with or without imposing terms, stay or restrain proceedings, or if it thinks fit, refer the case to the court hearing the winding up petition.

 

413.         In a winding up by the court, any disposition of the property of the company, including things in action and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding up shall, unless the court otherwise orders, be void.

 

414.         Where a company is being wound up by the court, any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of the winding up shall be void.

 

 

Commencement of Winding up

 

 

415.    (1)         Where, before the presentation of a petition for the winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and unless the court, on proof of fraud or mistake, thinks fit otherwise to direct, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.

 

  (2)          In any other case, the winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up.

 

 

Consequences of Winding up order

 

 

416.         On the making of a winding up order, a copy of the order shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Commission which shall make a minute thereof in its books relating to the Company.

 

417.         If a winding up order is made or a provisional liquidator is appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court given on such terms as the Court may impose.

 

418.         An order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if made on the joint petition of a creditor and of a contributory.

 

 

Official Receiver

 

 

419.   (1)          For the purpose of this Decree and so far as it relates to the winding up of companies by the court, "official receiver" means the deputy Chief Registrar of the Federal High Court or an officer designated for the purpose by the Chief Judge of the Court.

 

  (2)          Any such officer shall, for the purpose of his duties under this Decree, be styled "the official receiver".

 

420.    (1)         Where the court has made a winding up order or appointed a provisional liquidator there shall, unless the court thinks fit to order otherwise and so orders, be made out and submitted to the official receiver statement as to the affairs of the company in the prescribed form, verified by affidavit, and showing the particulars of its assets, debts and liabilities, the names, residences and occupations of its creditors the securities held by them respectively, the dates when the securities were respectively given the list of members and the list of charges and such further or other information as may be prescribed or as the official receiver may require.

 

  (2)          The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and the person who as at that date the secretary of the company, or by such of the persons mentioned in this subsection as the official receiver, subject to the direction of the court, may require to submit and verify the statement, that is to say persons who-

 

(a)         are or have been officers of the company;

 

(b)         have taken part in the formation of the company at any time within one year before the relevant date;

 

(c)         have been or are in the employment of the company within the said year, and are in the opinion of the official receiver capable of giving the information required;

 

(d)         are or have been within the said year officers of or in the employment of a company which is, or within the said year was, an officer of the company to which the statement relates.

 

  (3)          The statement shall be submitted within 14 days from the relevant date or within such extended time as the official receiver or the court may for special reasons appoint.

 

  (4)          Any person making or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the official receiver or provisional liquidator, as the case may be, out of the assets of the company such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the official receiver may consider reasonable, subject to an appeal to the Court.

 

  (5)          If any person without reasonable excuse, makes default in complying with the requirements of this section, he shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.

 

  (6)          Any person stating himself in writing to be a creditor or contributory of the company shall be entitled by himself or by his agent at all reasonable times, on a payment of the prescribed fee to inspect the statement submitted in pursuance of this section, and to a copy of or extract from it.

 

  (7)          Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of contempt of court and shall, on the application of the liquidator or of the official receiver, be punishable accordingly.

 

  (8)          In this section, the expression "the relevant date" means, in a case where a provisional liquidator is appointed, the date of his appointment and in a case where no such appointment is made, the date of the winding up order.

 

421.    (1)         If a winding up order is made, the official receiver shall as soon as practicable after receipt of the statement to be submitted under section 420 of this Decree or where the court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the court -

 

(a)             as to the amount of capital issued, subscribed and paid up, and the estimated amount of assets and liabilities; and

 

(b)             if the company has failed, as to the causes of the failure; and

 

(c)             whether, in his opinion, further inquiry is desirable as to any matter relating to the promotion, formation or failure of the company.

 

  (2)          The official receiver may if he thinks fit, make further reports, stating the manner in which the company was formed and whether in his opinion fraud has been committed by any person in its promotion or formation, or by any officer of the company in relation to the company since its formation and the reports may include any other matters which, in his opinion, it is desirable to bring to the notice of the court.

 

  (3)          If any further report under this section indicates the commission of fraud, the court shall have the further powers provided in section 450 of this Decree (which confers authority to order public examination of certain officials).

 

 

Liquidators

 

 

422.    (1)         The court may appoint a liquidator or liquidators for the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the court may impose and where there is a vacancy, the official receiver shall by virtue of his office, act as liquidator until such time as the vacancy is filled.

 

  (2)          At any time after the presentation of a petition and before the making of a winding up order, the appointment shall be provisional and the court making the appointment may limit and restrict the powers of the liquidator by the order appointing him.

 

  (3)          In the application of the foregoing provisions of this section -

 

(a)             if a provisional liquidator is to be appointed before the making of a winding up order, the official receiver or any other fit person may be so appointed;

 

(b)             on the making of a winding up order, if no liquidator is appointed, the official receiver shall by virtue of his office become the liquidator;

 

(c)             the official receiver in his capacity as provisional liquidator shall, and in any other case may, summon meetings of creditors and contributories of the company to be held separately for the purpose of determining whether or not an application is to be made to the court for appointing a liquidator in place of the official receiver;

 

(d)             if a person other than the official receiver is appointed liquidator he shall not be capable of acting in that capacity until he has notified his appointment to the Commission and given security in the prescribed manner to the satisfaction of the court.

 

  (4)          If more than one liquidator of a company is appointed by the court, the court shall declare whether anything by this Decree required or authorised to be done by a liquidator is to be done by all or any one or more of them.

 

  (5)          A liquidator appointed by the court may resign, or, on cause shown be removed by the court; and any vacancy in the office of a liquidator so appointed shall be filled by the court.

 

  (6)          Where a person other than the official receiver is appointed a liquidator, he shall receive salary in an amount, or remuneration by way of percentage or otherwise, as the court may direct; and, if more such persons than one are appointed liquidators, their remuneration shall be distributed among them in such proportions as the court directs.

 

  (7)          Where a liquidator of a company is appointed, he shall, after his individual name -

 

(a)             if he is the official receiver be described as "official receiver and liquidator of (add here name of the company)" and

 

(b)             in any other case be described as "liquidator of (add here name of the company)".

 

  (8)          The acts of a liquidator shall be valid notwithstanding any defects that may afterwards be discovered in his appointment or qualification.

 

  (9)          If a liquidator is appointed under this section, all the powers of the directors shall cease, except so far as the court may by order sanction the continuance thereof.

 

423.         In a winding up by the court the liquidator shall take into his custody, or under his control, all the property and choses in action to which the company is or appears to be entitled.

 

424.         Where a company is being wound up by the court, the court may on the application of the liquidator by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name, and thereupon, but subject to the requirements or registration under any particular enactment, the property to which the order relates shall vest accordingly; and the liquidator may, after giving such indemnity if any, as the court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.

 

425.    (1)         The liquidator in a winding up by the court shall have power, with the sanction either of the court or of the committee of inspection, to -

 

(a)             bring or defend any action or other legal proceeding in the name and on behalf of the company;

 

(b)             carry on the business of the company so far as may be necessary for its beneficial winding up;

 

(c)             appoint a legal practitioner or any other relevant professionals to assist him in the performance of his duties;

 

(d)             pay any classes of creditors in full;

 

(e)             make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;

 

(f)             compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect thereof.

 

  (2)          The liquidator in winding up by the court shall have power to -

 

(a)             sell the property of the company of whatever nature by public auction or private contract, with power to transfer the whole thereof to any person or company or to sell the same in parcels;

 

(b)             do all acts and to execute, in the name and on behalf of the company, all deeds, receipts and other documents, and for that purpose to use, when necessary, the company's seal;

 

(c)             prove, rank and claim in the bankruptcy, insolvency or sequestration of any contributory for any balance against his estate, and to receive dividends in the bankruptcy, insolvency or sequestration in respect of that balance as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors;

 

(d)             draw, accept, make and indorse any bill of exchange or promissory note in the name and on behalf of the company with the same effect with respect to the liability of the company as if the bill or note had been drawn, accepted, made or indorsed by or on behalf of the company in the course of its business;

 

(e)             raise on the security of the assets of the company any money requisite;

 

(f)             take out in his official name letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases the money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the liquidator himself;

 

(g)             appoint an agent to do any business which the liquidator is unable to do himself;

 

(h)             do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.

 

  (3)          The exercise by the liquidator in a winding up by the court of the powers conferred by this section shall be subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of those powers.

 

426.         If during the winding up of a company by the court a person other than the official receiver is appointed liquidator, he shall give the official receiver such information and access to and facilities for inspecting the books and documents of the company, and generally any aid requisite or necessary for enabling that officer to perform his duties under this Decree.

 

427.    (1)         Subject to the provisions of this Decree, the liquidator of a company being wound up by the court shall, in the administration and distribution of the assets of the company among its creditors, have regard to directions given by resolution of the creditors or contributories at any general meeting, or by the committee of inspection; so however that directions given by the creditors or contributories at any general meeting shall, in case of conflict, override directions given by the committee of inspection.

 

  (2)          The liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors or contributories by resolution either at the meeting appointing the liquidator or otherwise, may direct, or whenever requested in writing to do so by one tenth in value of the creditors or contributories as the case may be.

 

  (3)          The liquidator may apply to the court in the manner prescribed for directions in relation to any particular matter arising under the winding up.

 

  (4)          Subject to the provisions of this Decree, the liquidator shall use his own discretion in the management of the estate and its distribution among the creditors.

 

  (5)          Any persons aggrieved by an act or decision of the liquidator may apply to the court for such order in the premises as it thinks just; and the court may confirm, reverse, or modify the act or decision.

 

428.    (1)         Every liquidator of a company being wound up by the court shall, in such manner and at such times as the Commission directs, pay moneys received by him into the public fund of the Federation kept by the Commission under and for the purposes of this Decree and known as "the Companies liquidation Account", and the Accountant-General of the Federation shall furnish him with a certificate of receipt for the money so paid.

 

Provided that, if the committee of inspection satisfies the Commission that for the purpose of carrying on the business of the company or of obtaining advances, or for any other reason, it is for the advantage of the creditors or contributories that the liquidator should have an account with any bank, the Commission shall, on the application of the committee of inspection, authorise the liquidator to make his payments into and out of such bank, in Nigeria as the committee may select, and thereupon those payments shall be made in the prescribed manner.

 

  (2)          If the liquidator of a company being wound up as aforesaid, at any time retains for more than ten days an amount in excess of either 500 or, in any particular case, such other amount as the Commission may approve, and fails to satisfy the Commission as to the need for the retention beyond that time, the liquidator shall pay interest on the amount so retained in excess, at the rate of twenty per cent per annum, and shall be liable to -

 

(a)             disallowance of the whole or such part of his remuneration as the Commission thinks fit; and

 

(b)             removal from office,

 

and in addition, he shall be liable to pay any expenses occasioned by the retention.

 

  (3)          A liquidator of a company which is being wound up by the court shall not pay any sums received by him as liquidator into his private banking account.

 

429.    (1)         Every liquidator of a company being wound up by the court shall, at such times as may be prescribed but not less than twice in each year during his tenure of office, send to the Commission an account of his receipts and payments as liquidator.

 

  (2)          The account shall be in duplicate in the prescribed form, and shall be verified by a statutory declaration in the prescribed form.

 

  (3)          The Commission shall cause the account to be audited, and for the purpose of the audit the liquidator shall furnish the Commission with such vouchers and information as the Commission may require, and the Commission may at any time require the production of, and may inspect, any books or accounts kept by the liquidator.

 

  (4)          When the account has been audited, one copy shall be filed and kept by the Commission, and the other copy shall be with the court and each shall be open to inspection by any creditor or other person interested, on payment of the prescribed fee.

 

  (5)          The Commission shall cause the account when audited or a summary thereof to be printed, and shall send a printed copy of the account or summary by post to every creditor and contributory.

 

430.         Every liquidator of a company which is being wound up by the court shall, in the manner prescribed, keep proper books in which he shall cause to be made entries or minutes of proceedings at meetings, and of such other matters as may be prescribed, and any creditor or contributory may subject to the control of the court, personally or by his agent inspect any such books.

 

431.    (1)         Where the liquidator of a company being wound up by the court has realised all the property of the company, or so much of it as may, in his opinion, be realised without needlessly protracting the liquidation and has distributed a final dividend, if any, to the creditors, and adjusted the rights of the contributories among themselves, and made a final return, if any, to the contributories, or has resigned, or has been removed from his office, the Commission shall, on the application of the liquidator, cause a report on the accounts of the liquidator to be prepared.

 

  (2)          The Commission shall consider the report referred to in subsection (1) of this section together with any objection that may be raised by any creditor, or contributory, or person interested against the release of the liquidator, and may grant or withhold the release as it deems fit subject nevertheless to an appeal to the court.

 

  (3)          If the release of a liquidator is withheld, the court may, on the application of any creditor, or contributory, or person interested make such order as it thinks just, charging the liquidator with the consequences of any act or default which he may have done or made contrary to his duty.

 

  (4)          An order of the Commission releasing the liquidator shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the company, or otherwise in relation to his conduct as liquidator; but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.

 

  (5)          Where the liquidator has not previously resigned or been removed, his release shall operate as a removal of him from his office.

 

432.    (1)         The Commission shall take cognizance of the conduct of liquidators of companies which are being wound up by the court and if a liquidator does not faithfully perform his duties and duly observe all the requirement imposed on him by any enactment, or otherwise with respect to the performance of his duties, or if any complaint is made to the Commission by any creditor or contributory in regard thereto, the Commission shall inquire into the matter, and may take such action thereon as it thinks fit, including the direction of a local investigation of the books and vouchers of the liquidator.

 

  (2)          The Commission may at any time require the liquidator of a company being wound up by the court to answer any inquiry in relation to any winding up in which he is engaged and if the Commission thinks fit, it may apply to the court to examine the liquidator or any other person on oath concerning the winding up.

 

 

Committee of inspection, special manager, etc.

 

 

433.    (1)         Where a winding up order is made by the court, it shall be the business of the separate meetings of creditors and contributories summoned for the purpose of determining whether or not to apply to the court for an order appointing a liquidator in place of the official receiver, to determine whether or not application should be made to the court for the appointment of a committee of inspection to act with the liquidator, and who are to be members of the committee, if the appointment is made.

 

  (2)          The court may make any appointment and order required to give effect to any determination under this section and if there is a difference between the determinations of the meetings of the creditors and contributories in respect of the matters aforesaid, the court shall decide the difference and make any order it thinks necessary.

 

434.    (1)         A committee of inspection appointed under this Decree shall consist of creditors and contributories of the company or persons holding general powers of attorney from creditors or contributories in such proportions as may be agreed on by the meetings of creditors and contributories or as, in case of difference, may be determined by the court.

 

  (2)          A committee of inspection shall meet at the time or times appointed, so however that there shall be a meeting at least once in every month during its existence; but the liquidator or any member of the committee may convene a meeting as and when necessary.

 

  (3)          A meeting of a committee of inspection shall be deemed convened if a majority of members are present; but at any such meeting the committee may act by a majority of the members present.

 

  (4)          A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.

 

  (5)          If a member of the committee becomes bankrupt or compounds or arranges with his creditors or is absent from five consecutive meetings of the committee without leave of those members who together with himself represent the creditors or contributories, as the case may be, his office shall thereupon become vacant.

 

  (6)          A member of the committee may be removed by an ordinary resolution at a meeting of creditors, if he represents creditors, or of contributories, if he represents contributories, of which seven days notice has been given, stating the object of the meeting.

 

  (7)          On a vacancy occurring in the committee the liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, to fill the vacancy, and the meeting may, by resolution, reappoint the same or appoint another creditor or contributory to fill the vacancy:

 

Provided that if the liquidator, having regard to the position in the winding up, is of the opinion that it is unnecessary for the vacancy to be filled he may apply to the court and the court may make an order that the vacancy shall not be filled, or shall not be filled except in such circumstances as may be specified in the order.

 

  (8)          The continuing members of the committee, if not less than two, may act notwithstanding any vacancy in the committee.

 

435.         Where in the case of winding up there is no committee of inspection, the Commission may, on the application of the liquidator, if he thinks fit, do any act or thing or give any direction or permission which is by this Decree authorised or required to be done or given by the committee.

 

436.    (1)         Where the official receiver becomes the liquidator of a company, whether provisionally or otherwise, he may, if satisfied that the nature of the estate or business of the company, or the interests of the creditors or contributories generally, require the appointment of a special manager of the estate or business of the company other than himself, apply to the court for an order appointing a special manager to act during such time as the court may direct, with such powers, including those of a receiver or manager, as may be entrusted to him by the court, and the court may make any order necessary.

 

  (2)          A special manager appointed under this section shall receive remuneration as fixed by the court, and shall give security and account in such manner as the Commission directs.

 

437.         It is hereby declared that where application is made to the Court to appoint a receiver on behalf of the debenture holders or other creditors of a company being wound up by the court, the official receiver may be so appointed.

 

 

General powers of court in case of winding up by Court

 

 

438.    (1)         The court may at any time after an order for winding up, on the application either of a liquidator or the official receiver or any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings either altogether or for a limited time, on such terms and conditions as the court thinks fit.

 

  (2)          The court may, at any time after an order for winding up, on the application either of the liquidator or a creditor, and after having regard to the wishes of the creditors and contributories, make an order directing that the winding up, ordered by the court, shall be conducted as a creditors voluntary winding up and if the court does so the winding up shall be so conducted.

 

  (3)          On any application under this section, the court may, before making an order, require the official receiver to furnish to the court a report with respect to any facts or matters which are in his opinion relevant to the application.

 

  (4)          A copy of every order made under this section shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Commission, which shall make a minute of the order in its books relating to the company.

 

  (5)          If default is made in lodging a copy of an order made under this section with the Commission as required by subsection (4) of this section, every officer of the company or other person who knowingly authorises or permits the default shall be guilty of an offence punishable by a daily default fine of 25.

 

439.    (1)         As soon as may be after making a winding up order, the court shall settle a list of contributories, and may rectify the register of members in all cases where rectification is required in pursuance of this Decree, and the court shall cause the assets of the company to be collected, and applied in discharge of its liabilities:

 

Provided that where it appears to the court that it will not be necessary to make calls on or adjust the rights of contributories, the court may dispense with the settlement of a list of contributories.

 

  (2)          In settling the list of contributories, the Court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.

 

440.         The court may, at any time after making a winding up order require any contributory for the time being on the list of contributories and any trustee, receiver, banker, agent, or officer of the company to pay, deliver, convey, surrender or transfer forthwith, or within such time as the court directs, to the liquidator any money, property, or books and papers in his hands, to which the company is prima facie entitled.

 

441.    (1)         The court may, at any time after making a winding up order make an order on any contributory for the time being on the list of contributories to pay, in the manner directed by the order; any money due from him or from the estate of the person whom he represents to the company, exclusive of any money payable by him or the estate by virtue of any call in pursuance of this Decree.

 

  (2)          The court making an order under this section -

 

(a)             in the case of an unlimited company, may allow to the contributory by way of set-off any money due to him or to the estate which he represents from the company of any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit;

 

(b)             in the case of a limited company, may make to any director or manager whose liability is unlimited or to his estate, the like allowance as in paragraph (a) of this subsection.

 

  (3)          In the case of any company, limited or unlimited, when all the creditors are paid in full, the money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.

 

442.    (1)         The court may, at any time after making a winding up order, and either before or after it has ascertained the sufficiency of the assets of the company, make calls on all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the court considers necessary to satisfy the debts and liabilities of the company, and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, and make an order for payment of any calls so made.

 

  (2)          In making a call under this section, the court shall take into consideration the probability that some of the contributories may fail, wholly or partially, to pay the call.

 

443.    (1)         The court may order any contributory, purchaser or other person from whom money is due to the company to pay it into the company's liquidation account referred to in section 428 of this Decree to the account of the liquidator instead of direct to the liquidator and any such order may be enforced in the same manner as if it had directed payment to the liquidator.

 

  (2)          Moneys and securities paid or delivered into the company's liquidation account in the event of a winding up by the court shall be subject in all respects to any relevant order of the court.

 

444.    (1)         An order made by the court on a contributory shall, subject to any right of appeal, be conclusive evidence that money, if any thereby appearing to be due or ordered to be paid, is due.

 

  (2)          All other pertinent matters stated in the order shall be taken to be truly stated as against all persons and in all proceedings, except proceedings against the land of a deceased contributory, when the order shall be only prima facie evidence for the purpose of charging his land, unless his heirs or devises were on the list of contributories at the time the order was made.

 

445.         The court may fix a time or times within which creditors are to prove their debts or claims, or be excluded from the benefit of any distribution made before those debts are proved.

 

446.         The court shall adjust the rights of the contributories among themselves, and distribute any surplus among the persons entitled thereto.

 

447.    (1)         The court may, at any time after making a winding up order, make such order for inspection of the books and papers of the company by creditors and contributories as the court thinks just, and any books and papers in the possession of the company may be inspected by creditors or contributories accordingly, but not further or otherwise.

 

  (2)          Nothing on this section shall be taken as excluding or restricting any statutory rights of a government department or person acting under the authority of a government department.

 

448.         The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the costs, charges and expenses incurred in the winding up in such order of priority as the court thinks just.

 

449.    (1)         The Court may, at any time after the appointment of a provisional liquidator or the making of a winding up order, summon before it any officer of the company or person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or any person who the court deems capable of giving information concerning the promotion, formation, trade, dealings, affairs or property of the company.

 

  (2)          The court may examine on oath any person so summoned concerning the matters aforesaid either by word of mouth or on written interrogatories, and may reduce his answers to writing and require him to sing them.

 

  (3)          The court may require any person summoned under subsection (1) of this section, to produce books and papers in his custody or power relating to the company; but, where any such person claims a lien on books or papers produced by him, the production shall be without prejudice to the lien, and the court shall have jurisdiction in the winding up to determine all questions relating to that lien.

 

  (4)          If any person so summoned as aforesaid after being tendered a reasonable sum for his expenses, refuses to come before the court at the time appointed, not having lawful impediment (make known to the court at the time of its sitting and allowed by it), the court may cause him to be apprehended and brought before the court for examination.

 

450.    (1)         Where an order is made for winding up a company by the court and the official receiver makes a further report under this Decree stating that in his opinion a fraud has been committed by any person in the promotion or formation, of the company, or by any director or other officer of the company in relation to the company since its formation, the court may, after consideration of the report, direct that any person who has taken any part in the promotion or formation of the company, or has been a director or officer of the company, shall attend before the court on a day appointed by the court for that purpose, and be publicly examined as to the promotion or formation or the conduct of the business of the company, or as to his conduct and dealing as director or officer thereof.

 

  (2)          The official receiver shall take part in the examination, and for that purpose may, if specially authorised by the Commission in that behalf, employ a legal practitioner.

 

  (3)          The liquidator, where the official receiver is not the liquidator and any creditor or contributory, may also take part in the examination either personally or by a legal practitioner.

 

  (4)          The court may put such questions to the person examined as the court thinks fit.

 

  (5)          The person examined shall be examined on oath, and shall answer all such questions as the court may put or allow to be put to them.

 

  (6)          A person ordered to be examined under this section shall at his own cost, before his examination be furnished with a copy of the official receiver's report, and may at his own cost employ a legal practitioner who shall be at liberty to put to him such questions as the court may deem just for the purpose of enabling him to explain or qualify any answers given by him:

 

Provided that if any such person applies to the court to be exculpated from any charges made or suggested against him, it shall be the duty of the official receiver to appear on the hearing of the application and call the attention of the court to any matters which appear to the official receiver to be relevant, and if the court after hearing any evidence given or witnesses called by the official receiver, grants the application, the court may allow the applicant such costs as in its discretion it may think fit.

 

 (7)          Notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined, and may thereafter be used in evidence against him, and shall be open to the inspection of any creditor or contributory at all reasonable times.

 

  (8)          The Court may, if it thinks fit adjourn the examination from time to time.

 

  (9)          An examination under this section may, if the court so directs, and subject to general rules made under section 453 of this Decree, be held before any magistrate, and the powers of the court under this section as to the conduct of the examination but not as to costs, may be exercised by the magistrate before whom the examination is held.

 

451.         The court, at any time either before or after making a winding up order, on proof of probable cause for believing that a contributory is about to quit Nigeria or otherwise to abscond, or to remove or conceal any of his property for the purpose of evading payment of calls, or of avoiding examination respecting the affairs of the company, may cause the contributory to be arrested, and his books and papers and movable personal property, to be seized, and him and them to be safely kept until such time as the court may order.

 

452.         Any powers by this Decree conferred on the court shall be in addition to and not in restriction of any existing powers of instituting proceedings against any contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.

 

453.    (1)         Provision may be made by rules for enabling or requiring all or any of the powers and duties conferred and imposed on the court by this Decree, in respect of the matters following, to be exercised or performed by the liquidator as an officer of the court, and subject to the control of the court, that is to say, the powers and duties of the court in respect of -

 

(a)             the holding and conducting of meetings to ascertain the wishes of creditors and contributories;

 

(b)             the settling of lists of contributories and the rectifying of the register of members where required, and the collecting and applying of the assets;

 

(c)             requiring delivery of property or documents to the liquidator;

 

(d)             the making of calls;

 

(e)             the fixing of a time within which debts and claims shall be proved.

 

  (2)          Nothing in this section shall authorise the liquidator, without the special leave of the court, to rectify the register of members, or, without either the special leave of the court or the sanction of the committee of inspection, to make any call.

 

454.    (1)         If the affairs of a company have been fully wound up and the liquidator makes an application in that behalf, the Court shall order the dissolution of the company and the company shall be dissolved accordingly from the date of the order.

 

  (2)          A copy of the order shall, within 14 days from the date when made, be forwarded by the liquidator to the Commission who shall make in its books a minute of the dissolution of the company.

 

  (3)          If the liquidator makes default in complying with the requirements of this section, he shall be of guilty of an offence and liable to a fine of 25 for every day during which he is in default.

 

 

Enforcement of and appeals from orders

 

 

455.         An order made by a court under this Decree may be enforced in the same manner as orders made in any action pending therein.

 

456.         Subject to rules of court, an appeal from any order or decision made or given in the winding up of a company by the court under this Decree shall lie in the same manner and subject to the same conditions as an appeal from any order or decision of the court in cases within its ordinary jurisdiction.

 

 

Chapter  3

Voluntary Winding- up

 

 

Resolutions for and commencement of voluntary winding up

 

 

457.         Any company may be wound up voluntarily -

 

(a)             when the period, if any, fixed for the duration of the company by the articles expires, or the event, if any, occurs, on occurrence of which the articles provided that the company is to be dissolved and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily;

 

(b)             if the company resolves by special resolution that the company be wound up voluntarily;

 

and references in this Decree to a "resolution for voluntary winding up" means a resolution passed under any of the paragraphs of this section.

 

458.    (1)         If a company passes a resolution for voluntary winding up it shall, within 14 days after the passing of the resolution give notice of the resolution by advertisement in the Gazette or two daily newspapers and to the Commission.

 

  (2)          If default is made in complying with this section, the company and every officer of the company who is in default shall be liable to a fine of 500 and for the purposes of this subsection the liquidator of the company shall be deemed to be an officer of the company.

 

459.         A voluntary winding up shall be deemed to commence at the time of the passing of the resolution for voluntary winding up.

 

 

Consequences of voluntary winding- up

 

 

460.         In case of voluntary winding up, the company shall, from the commencement of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up thereof:

 

Provided that the corporate state and corporate powers of the company shall, notwithstanding anything to the contrary in its articles, continue until it is dissolved.

 

461.         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 of the company, made after the commencement of a voluntary winding up, shall be void.

 

 

Declaration of solvency

 

 

462.    (1)         Where on or after the commencement of this Decree, it is proposed to wind up a company voluntarily, the directors of the company or, in the case of a company having more than two directors, the majority of the directors, may at a meeting of the directors make a statutory declaration, to the effect that they have made a full inquiry into the affairs of the company and that, having so done, they have formed the opinion that the company will be able to pay its debts in full within such period, not exceeding 12 months from the commencement of the winding up, as is specified in the declaration.

 

  (2)          A declaration made as aforesaid shall have no effect for the purposes of this Decree unless-

 

(a)             it is made within the 5 weeks immediately preceding the date of the passing of the resolution for winding up the company and is delivered to the Commission for registration before that date; and

 

(b)             it embodies a statement of the company's assets and liabilities as at the latest practicable date before the making of the declaration.

 

  (3)          Any director of a company making a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period specified in the declaration, shall be guilty of an offence and liable on conviction to a fine of 1,500 or to imprisonment for a term of 3 months, or to both; and if the company is wound up in pursuance of a resolution passed within the period of five weeks after the making of the declaration, but its debts are not paid or provided for in full within the period stated in the declaration, it shall be presumed until the contrary is shown that the director did not have reasonable grounds for his opinion.

 

  (4)          A winding up in any case where a declaration has been made and delivered in accordance with this section, shall in this Decree be referred to as "a members' voluntary winding up" and a winding up in any case where a declaration has not been made and delivered as aforesaid shall in this Decree referred to as "a creditors' voluntary winding up".

 

  (5)          Subsections (1) to (3) of this section shall not apply to a winding up commenced before the commencement of this Decree.

 

 

Provisions applicable to a members' voluntary winding up

 

 

463.         The provisions following that is to say, sections 464 to 470 of this Decree shall, subject to the alternative provision in section 469 of this Decree apply in relation to a members' voluntary winding up.

 

464.    (1)         The company in general meeting shall appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the company, and may fix the remuneration to be paid to him or them.

 

   (2)          If a liquidator is appointed under this section, all the powers of the directors shall cease, except so far as the company in general meeting or the liquidator sanctions the continuance thereof.

 

465.    (1)         If a vacancy occurs by death, resignation or otherwise in the office of liquidator appointed by the company, the company in general meeting may, subject to any arrangement with its creditors, fill the vacancy; and for that purpose a general meeting may be convened by any contributory or, if there were more liquidators than one, by the continuing liquidators.

 

  (2)          The general meeting shall be held in the manner provided by this Decree or by the articles; or in such manner as may, on application by any contributory or by the continuing liquidators, be determined by the court.

 

466.    (1)         If, in the case of a winding up commenced after the commencement of this Decree, the liquidator is at any time of opinion that the company will not be able to pay its debts in full within the period stated in the declaration under section 462 of this Decree, he shall forthwith summon a meeting of the creditors, and lay before the meeting a statement of the assets and liabilities of the company.

 

  (2)          If the liquidator fails to company with this section, he shall be guilty of an offence and liable to a fine of 500.

 

467.    (1)         Subject to the provisions of section 469 of this Decree, in the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year or such longer period as the Commission may allow, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the proceeding year.

 

  (2)          If the liquidator fails to comply with this section, he shall be guilty of an offence and liable to a fine of 50.

 

468.    (1)         Subject to the provisions of section 469 of this Decree, as soon as the affairs of the company are fully wound up, the liquidator shall prepare an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of; and when the account is prepared, he shall call a general meeting of the company for the purpose of laying before it the account, and giving any explanation thereof.

 

  (2)          The meeting shall be called by notice published in the Gazette and in some newspaper printed in Nigeria and circulating in the locality where the meeting is being called, specifying the time, place and object thereof, and published one month at least before the meeting.

 

  (3)          Within 7 days after the meeting, the liquidator shall send to the Commission a copy of the account, and shall make a return to it of the holding of the meeting and of its date and if the copy is not sent or the return is not made in accordance with this subsection, the liquidator shall be guilty of an offence and liable to fine of 15 for every day during which the default continues: Provided that, if a quorum is not present at the meeting, the liquidator shall in lieu of the return hereinbefore mentioned, make a return that the meeting was duly summoned and that no quorum was present thereat, and upon such a return being made, the provisions of this subsection as to the making of the return shall be deemed to have been complied with.

 

  (4)          The Commission on receiving the account and the appropriate return shall forthwith register them, and on the expiration of 3 months from the registration of the return the company shall be deemed to be dissolved:

 

Provided that the court may, on the application of the liquidator or of any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.

 

  (5)          It shall be the duty of the person on whose application an order of the court under this section is made, within seven days after the making of the order, to deliver to the Commission an office copy of the order for registration, and if that person fails so to do he shall be liable to a fine of 20 for every day during which the default continues.

 

  (6)          If the liquidator fails to call a general meeting of the company as required by this section, he shall be guilty of an offence liable to a fine of 50.

 

469.         Where section 466 of this Decree has effect, sections 477 and 478 thereof shall apply to the winding up to the execution of the two last foregoing sections, as if the winding up were a creditors' voluntary winding up and not a members' voluntary winding up:

 

Provided that the liquidator shall not be required to summon a meeting of creditors under section 477 of this Decree at the end of the first year from the commencement of the winding up, unless the meeting held under section 466 of this Decree is held more than 3 months before the end of that year.

 

470.    (1)         The liquidator in a members' voluntary winding up shall keep proper records and books of account with respect to his acts and dealings and of the conduct of the winding up and of all receipts and payments by him and so long as he carries on the business of the company, shall keep a distinct account of the trading.

 

  (2)          In the event of the winding up continuing for more than a year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up and of each succeeding year, or at the first convenient date within 3 months of the end of the year or such longer period as the Commission may allow, and shall lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the proceeding year and of the trading during such time as the business of the company has been carried on, and within 28 days thereafter shall send a copy of such accounts to the Commission for registration.

 

  (3)          So soon as the affairs of the company are fully wound up, the liquidator shall prepare and send to every member of the company final accounts of the winding up showing how the winding up has been conducted, the result of the trading during such time as the business of the company has been carried on, and how the property of the company has been disposed of, and thereupon shall convene a general meeting of the company for the purpose of laying before it such accounts and of giving an explanation thereof.

 

  (4)          Within 28 days after the meeting referred to in the immediately preceding subsection, the liquidator shall send to the Commission for registration copies of the accounts laid before the meeting and a statement of the holding of the meeting and of its date:

 

Provided that if a quorum was not present at the meeting the liquidator, in lieu of the statement herein before mentioned, shall send a statement that the meeting was duly convened and that no quorum was present thereat.

 

  (5)          The records, books and accounts referred to in this section shall be in such form if any, as the Commission may from time to time prescribe and shall give a true and fair view of the matters therein recorded and of the administration of the company's affairs and of the winding up.

 

  (6)          The accounts referred to in subsections (2) and (3) of this section, shall be audited by the auditor of the company prior to being laid before the company in general meeting in accordance with such subsections and the auditors shall state in a report annexed thereto whether, in their opinion and to the best of their information -

 

(a)             they have obtained all the information and explanations necessary for the purpose of their audit;

 

(b)             proper books and records have been maintained by the liquidator in accordance with this Decree, and such accounts are in accordance with the books and records and give all the information required by this Decree in the manner therein required and give a true and fair view of the matters stated in such accounts:

 

Provided that such audit and auditors' report shall not be required if -

 

(i)             the liquidator, or one of the liquidators if more than one, is duly qualified under the provisions of this Decree for appointment as auditor of a public company; and

 

(ii)             on or after his appointment as liquidator, the company resolved by special resolution that the accounts shall not be audited in accordance with this subsection.

 

  (7)          Meetings required to be convened under this section or the immediately foregoing section shall be convened and held, so far as may be, in accordance with the provisions of this Decree and the regulations of the company relating to general meetings.

 

  (8)          The liquidator shall preserve the books and papers of the company and of the liquidator for a period of 5 years from the dissolution of the company but thereafter may destroy such books and papers unless the Commission shall otherwise direct in which event he shall not destroy the same until the Commission consent in writing.

 

  (9)          If a liquidator should fail to comply with any of the provisions of this section, he shall be guilty of an offence and liable to a fine not exceeding 230 for each default.

 

 

Provisions applicable to a creditors' voluntary winding up

 

 

471.         The provisions following, that is to say sections 472 to 478 of this Decree shall apply in relation to a creditors' voluntary winding up.

 

472.    (1)         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 meetings of the company.

 

  (2)          The company shall cause notice of the meeting of the creditors to be published once in the Gazette and once at least in two newspapers printed in Nigeria and circulating in the district where the registered office or principal place of business of the company is situate.

 

  (3)          The directors of the company shall -

 

(a)             cause a full statement of the position of the company's affairs together with a list of the creditors of the company and the estimated amount of their claims to be laid before the meeting of the creditors to be held as aforesaid; and

 

(b)             appoint one of their number to preside at the said meeting.

 

  (4)          It shall be the duty of the director so appointed to attend the meeting and preside thereat.

 

  (5)          If the meeting of the company at which the resolution for voluntary winding up is to be proposed is adjourned and the resolution is passed at an adjourned meeting, any resolution passed at the meeting of the creditors held in pursuance of subsection (1) of this section shall have effect as if it had been passed immediately after the passing of the resolution for winding up the company.

 

  (6)          If default is made by -

 

(a)             the company in complying with subsection (1) or (2) of this section;

 

(b)             the directors of the company in complying with subsection (3) of this section;

 

(c)             any director of the company appointed to preside, in complying with subsection (4) of this section;

 

the company, directors or director, as the case may be, shall be guilty of an offence and liable to a fine of 250 and in the case of default by the company, every officer of the company who is in default shall be liable to the like penalty.

 

473.    (1)         The creditors and the company at their respective meetings mentioned in section 472 of this Decree may 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 if any, nominated by the company shall be liquidator:

 

Provided that in the case of different persons being nominated, any director, member or creditor of the company may, within 7 days after the date on which the nomination was made by the creditors, apply to the court for an order directing that the persons nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors, or appointing some other person to be liquidator instead of the person appointed by the creditors.

 

  (2)          On the appointment of a liquidator, all the powers of the directors shall cease, except so far as the committee of inspection, or if there is no such committee, the creditors, sanction the continuance thereof.

 

474.    (1)         The creditors at the meeting to be held in pursuance of section 472 of this Decree or at any subsequent meeting may, if they think fit, appoint a committee of inspection consisting of not more than 5 persons, and if such a committee is appointed the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee not exceeding 5 in number:

 

Provided that the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company shall not be members of the committee of inspection, and if the creditors so resolve, the persons mentioned in the resolution shall not, unless the court otherwise directs, be qualified to act as members of the committee, and on any application to the court under this provision the court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.

 

  (2)          Subject to the provisions of this section and to general rules made under this Decree, the provisions of section 434 of this Decree (except subsection (1) of this section shall apply with respect to a committee of inspection appointed under this section as they apply with respect to a committee of inspection appointed in a winding up by the court.

 

475.         The committee of inspection, or if there is no such committee, the creditors, may fix the remuneration to be paid to the liquidator or liquidators.

 

476.         If a vacancy occurs, by death, resignation or otherwise, in the office of a liquidator, other than a liquidator appointed by, or by the direction of the court, the creditors may fill the vacancy.

 

477.    (1)         In the event of the winding up continuing for more than one year, the liquidator shall summon a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months, from the end of the year or such longer period as the Commission may allow, and shall lay before the meetings an account of his acts and dealings and of the conduct of the winding up during the proceeding year.

 

  (2)          If the liquidator fails to comply with the provisions of this section, he shall be guilty of an offence and liable to a fine of 50.

 

478.    (1)         As soon as the affairs of the company are fully wound up, the liquidator shall prepare an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon he shall call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving any explanation thereof.

 

  (2)          Each such meeting shall be called by notice published in the Gazette and in some newspapers printed ion Nigeria and circulating in the locality where the meeting is being called, specifying the time, place and object thereof, and published one month at least before the meeting.

 

  (3)          Within 7 days after the date of the meeting, or if the meetings are not held on the same date, after the date of the later meeting, the liquidator shall send to the Commission a copy of the account, and shall make a return to it of the holding of the meetings and of their dates, and if the copy is not sent or the return is not made in accordance with this subsection the liquidator shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues:

 

Provided that, if a quorum is not present at either such meetings the liquidator shall, in lieu of the return hereinbefore mentioned make a return that the meeting was duly summoned and that no quorum was present; and upon such a return being made the provisions of this subsection as to the making of the return shall, in respect of that meeting, be deemed to have been complied with.

 

  (4)          The Commission on receiving the account and in respect of each such meeting, either of the returns mentioned above, shall forthwith register them, and on the expiration of three months from the registration thereof the company shall be deemed to be dissolved:

 

Provided that the court may, on the application of the liquidator or of any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.

 

  (5)          It shall be the duty of the person on whose application an order of the court under this section is made, within 7 days after the making of the order, to deliver to the Commission an office copy of the order for registration, and if that persons fails so to do he shall be guilty of an offence and liable to a fine of 25 for every day during which the default continues.

 

  (6)          If the liquidator fails to call a general meeting of the company or a meeting of the creditors as required by this section, he shall be guilty of an offence and liable to a fine of 250.

 

 

Provisions applicable to every voluntary winding- up

 

 

479.         The provisions following, that is to say, sections 480 to 485 of this Decree, shall apply to every voluntary winding up, whether a members' or a creditors' winding up.

 

480.         Subject to the provisions of this Decree as to preferential payments, the property of a company shall on its winding up, be applied in satisfaction of its liabilities pari passu and, subject to such application shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company.

 

481.    (1)         The liquidator may -

 

(a)             in the case of a members' voluntary winding up, with the sanction of special resolution of the company, and, in the case of a creditors' voluntary winding up, with the sanction of the court or (the committee of inspection or if there is no such committee) a meeting of the creditors, exercise any of the powers given by paragraphs (d), (e) and (f) of section 425 (1) of this Decree to a liquidator in a winding up by the court;

 

(b)             without sanction, exercise any of the other powers given by this Decree to the liquidator in a winding up by the court;

 

(c)             exercise the power of the court under this Decree of settling a list of contributories, and the list of contributories shall be prima facie evidence of the liability of the persons named therein to be contributories;

 

(d)             exercise the court's power of making calls;

 

(e)             summon general meetings of the company for the purpose of obtaining the sanction of the company by special resolution or for any other purpose he may think fit.

 

  (2)          The liquidator shall pay the debts of the company and shall adjust the rights of the contributories among themselves.

 

  (3)          Where several liquidators are appointed, any power given by this Decree may be exercised by such one or more of them as may be determined by any number not less than two.

 

482.         If in any voluntary winding up there is no liquidator acting, the Court may appoint a liquidator and in any case the court may, on cause shown, remove a liquidator and appoint another liquidator.

 

483.    (1)         The liquidator or any contributory or creditor may apply to the court to determine any question arising in the winding up of a company, to exercise, as respects the enforcing of calls or any other matter, all or any of the powers which the court might exercise if the company were being wound up by the court.

 

  (2)          If the court is satisfied that the determination of the question or the required exercise of power will be just and beneficial, it may give effect wholly or partially to the application on such terms and conditions as it thinks fit, or make such other order as the case may require.

 

  (3)          A copy of an order made under this section staying the proceedings in the winding up shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Commission which shall make a minute of the order in its books relating to the company.

 

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

 

485.         The winding up of a company shall not bar the right of any creditor or contributory to have it wound up by the court; but where the applicant for winding up is a contributory, an order shall not be made unless the court is satisfied that the rights of contributories shall be prejudiced by the members' or creditors' voluntary winding up, as the case may be.

 

 

Chapter  4

 Winding-up Subject to Supervision of Court

 

 

486.         If a company passes a resolution for voluntary winding up, the court may on petition order that the voluntary winding up shall continue but subject to such supervision of the court, and with such liberty for creditors, contributories, or others to apply to the court, and generally on such terms and conditions, as the court thinks just.

 

487.         A petition for the continuance of a voluntary winding up subject to the supervision of the court shall, for the purpose of giving jurisdiction to the Court over actions, be deemed to be a petition for winding up by the Court.

 

488.         A winding up subject to the supervision of the court shall, for the purposes of sections 413 and 414 of this Decree, be deemed to be a winding up by the court.

 

489.    (1)         Where an order is made for a winding up subject to supervision, the court may by the same or any subsequent order appoint an additional liquidator.

 

  (2)          A liquidator appointed by the court under this section shall have the same powers, be subject to the same obligations, and in all respects stand in the same position, as if he had been duly appointed in accordance with the provisions of this Decree with respect to the appointment of liquidators in a voluntary winding up.

 

  (3)          The court may remove any liquidator so appointed by the court or any liquidator continued under the supervision order, and may fill any vacancy occasioned by the removal, or by death or resignation.

 

490.    (1)         Where an order is made for a winding up subject to supervision, the liquidator may, subject to any restrictions imposed by the court, exercise all his powers, without the sanction or intervention of the court, in the same manner as if the company were being wound up voluntarily;

 

Provided that the powers specified in paragraphs (d), (e) and (f) of section 425(l) of this Decree shall not be exercised by the liquidator except with the sanction of the court or, in a case where before the order the winding up was a creditors' voluntary winding up, with the sanction of the court or the committee of inspection, or (if there is no such committee) a meeting of the creditors.

 

  (2)          A winding up subject to the supervision of the Court shall not amount to a winding up by the court for the purpose of the provisions of this Decree as specified in Schedule 12 to this Decree (dealing with provisions which do not apply in the case of winding up subject to the supervision of the court) but, subject to this, an order for a winding up subject to supervision shall for all purposes be an order for winding up by the court:

 

Provided that where the order for winding up subject to supervision of the Committee was made in relation to a creditors' voluntary winding up in which a Committee of inspection had been appointed, the order shall be deemed to be an order for winding up by the court for the purposes of section 434 of this Decree, (except subjection (1) thereof) save in so far as the operation of that section is excluded in a voluntary winding up by general rules made under this Decree.

 

 

Chapter  5

Provisions Applicable to every Mode of Winding-Up

 

 

491.    (1)         The liquidator shall, within 14 days after his appointment publish in the Gazette and in 2 daily newspapers and deliver to the Commission for registration a notice of his appointment in such form as the Commission may from time to time approve.

 

  (2)          If the liquidator fails to comply with the requirements of this section he shall be guilty of an offence and liable to a fine of 25 for every day during which default continues.

 

 

Proof and Ranking of Claims

 

 

492.         In every winding up (subject, in the case of insolvent companies to the application in accordance with the provisions of this Decree of the law of bankruptcy), all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claim as may be subject to any contingency or sound only in damages, or for some other reasons do not bear a certain value.

 

493.         In the winding up of an insolvent company registered in Nigeria the same rules shall prevail and be observed with regard to the respective rights of secured and unsecured creditors and to debts provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of bankruptcy in Nigeria with respect to the estates of persons adjudged bankrupt, and all persons who in any such case would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up and make such claims against the company as they respectively are entitled to by virtue of this section.

 

494.    (1)         In a winding up there shall be paid in priority to all other debts -

 

(a)             all local rates and charges due from the company at the relevant date, and having become due and payable within 12 months next before that date, and all Pay-As-You-Earn tax deductions, assessed taxes, land tax, property or income tax assessed on or due from the company up to the annual day of assessment next before the relevant date, and in the case of Pay-As-You-Earn tax deductions, not exceeding deductions made in respect of one year of assessment and, ion any other case, not exceeding in the whole one year's assessment;

 

(b)             deductions under the National Provident Fund Act 1961;

 

(c)             all wages or salary of any clerk or servant in respect of services rendered to the company;

 

(d)             all wages of any workman or labourer whether payable for time or for piece work, in respect of services rendered to the company;

 

(e)             all accrued holiday remuneration becoming payable to any clerk, servant, workman or labourer (or in the case of his death to any other person in his rights) on the termination of his employment before or by the effect of the winding up order or resolution;

 

(f)             unless the company is being wound up voluntarily merely for the purpose of reconstruction or of amalgamation with another company or unless the company has at the commencement of the winding up under such a contract with insurers as is mentioned in section 26 of the Workmen's Compensation Decree 1988, rights capable of being transferred to and vested in the workman, all amounts due in respect of any compensation or liability for compensation under the Decree aforesaid, accrued before the relevant date.

 

  (2)          Where any compensation under the Workmen's Compensation Decree 1987 is a weekly payment, the amount due in respect thereof shall, for the purpose of paragraph (e) of subsection (1) of this section, be taken to be the amount of the lump sum for which the weekly payment could, if redeemable, be redeemed if the employer made an application for that purpose under the aforesaid Decree.

 

  (3)          Where any payment on account of wages or salary has been made to any clerk, servant, workman or labourer in the employment of a company out of the money advanced by some persons for that purpose, that person shall in a winding up have a right of priority in respect of the money so advanced and paid up to the amount by which the sum in respect of which that clerk, servant, workman or labourer would have been entitled to priority in the winding up has been diminished by reason of the payment having been made.

 

  (4)          The foregoing debts shall-

 

(a)             rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions; and

 

(b)             so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures under any floating charge created by the company and be paid accordingly out of any property comprised in or subject to that charge.

 

  (5)          Subject to the retention of such sums as may be necessary for the costs and expenses of the winding up, the foregoing debts shall be discharged forthwith so far as the assets are sufficient to meet them.

 

  (6)          In this section "the relevant date" means -

 

(a)             in the case of a company ordered to be wound up compulsorily which had not previously commenced to be wound up voluntarily, the date of the winding up order; and

 

(b)             in any other case, the date of the commencement of the winding up.

 

 

Effect of Winding up on Antecedent and other Transactions

 

 

495.    (1)         Any conveyance, mortgage delivery of goods, payment, execution or other act relating to property which would, if made or done by or against individual, be deemed in his bankruptcy a fraudulent preference, shall, if made or done by or against a company, be deemed, in the event of its being wound up, a fraudulent preference of its creditors, and be invalid accordingly.

 

  (2)          Any conveyance or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.

 

  (3)          For the purposes of this section, the presentation of a petition for winding up in the case of a winding up by or subject to the supervision of the court, and a resolution for winding up in the case of a voluntary winding up, shall be deemed to correspond with the act of bankruptcy in the case of an individual.

 

496.    (1)         Where anything made or done after the commencement of this Decree is void under section 495 of this Decree as a fraudulent preference of a person interested in property mortgaged or charged to secure the company's debt, the person preferred shall, without prejudice to any liabilities or rights arising apart from this provision, be subject to the same liabilities, and have the same rights, as if he had undertaken to be personally liable as surety for the debt, to the extent of the charge on the property or have value of his interest, which ever is the less and the value of the said person's interest shall be determined as at the date of the transaction constituting the fraudulent preference, and shall be determined as if the interest were free of all incumbrances other than those to which the charge for the company's debt was the subject.

 

  (2)          Where for the purposes of this section, application is made to the court with respect to any payment on the ground that the payment was fraudulent preference of a surety or guarantor, the court shall have jurisdiction to determine any questions with respect to the payment arising between the person to whom the payment was made and the surety or guarantor and to grant relief in respect thereof, notwithstanding that it is not necessary so to do for the purposes of the winding up, and for that purpose may give leave to bring in the surety or guarantor as a third party as in the case of an action for the recovery of the sum paid.

 

  (3)          Subsection (2) of this section shall apply, with the necessary modifications, in relation to transactions other than the payment of money, as it applies in relation to payments.

 

497.         Where a company is being wound up subject to the supervision of the court, any attachment, sequestration or execution put in force against the estate or effects of the company after the commencement of the winding up shall be void.

 

498.         Where a company is being wound up, a floating charge on the undertaking or property of the company created within 3 months of the commencement of the winding up shall, unless it is proved that the company immediately after the creation of the charge was solvent, be invalid, except to the amount of any cash paid to the company at the time of or subsequently to the creation of, and in consideration for, the charge, together with interest on that amount at the current bank rate.

 

499.    (1)         Where any part of the property of a company which is being wound up consists of land of any tenure burdened with onerous covenants, of shares or stock in companies, of unprofitable contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act or to the payment of any sum of money, the liquidator of the company notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, may with the leave of the court and subject to the provisions of this section, by writing signed by him, at any time within 12 months after the commencement of the winding up or such extended period as may be allowed by the court, disclaim the property:

 

Provided that, where any such property has not come to the knowledge of the liquidator within one month after the commencement of the winding up, the power under this section of disclaiming the property may be exercised at any time within 12 months after he has become aware thereof or such extended period as may be allowed by the court.

 

  (2)          A disclaimer, under this section shall operate to determine, as from the date of disclaimer, the rights, interest and liabilities of the company, and the property of the company, in or in respect of the property disclaimed, but shall not, except so far as is necessary for the purpose of releasing the company and the property of the company from liability, affect the rights or liabilities of any other person.

 

  (3)          The court, before or on granting leave to disclaim, may require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such other order in the matter as the Court thinks just.

 

  (4)          The liquidator shall not be entitled to disclaim any property under this section in any case where an application in writing has been made to him by any persons interested in the property requiring him to decide whether or not he will disclaim and the liquidator has not, within a period of 28 days after the receipt of the application or such further period as may be allowed by the court, given notice to the applicant that he intends to apply to the court for leave to disclaim, and, in the case of a contract, if the liquidator, after such an application does not within that period or further period disclaim the contract, the company shall be deemed to have adopted it.

 

  (5)          The court may, on the application of any person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract on such terms as to payment by or to either party, of damages for the non-performance of the contract, or otherwise as the court thinks just and any damages payable under the order to any such person may be proved by him as a debt in the winding up.

 

  (6)          The court may, on an application by any person who claims any interest in any property disclaimed under this section, or is under any liability not discharged by this Decree in respect of any disclaimed property and on hearing any such persons as it thinks fit, make an order for the vesting of the property in or the delivery of the property to any persons entitled thereto, or to whom it may seem just that the property should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the court thinks just and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose:

 

Provided that, where the property disclaimed is of a leasehold nature the court shall not make vesting order in favour of any person claiming under the company, whether as an under-lessee or as a mortgagee by demise, a mortgage by way of legal charge or mortgage, as the case may be, except upon the terms of making that person -

 

 

(a)             subject to the same liabilities and obligations as those to which the company was subject under the lease in respect of the property at the commencement of the winding up; or

 

(b)             if the court thinks fit, subject only to the same liabilities and obligations as if the lease had been assigned to that person at that date, and in either event if the case so requires, as if the lease had comprised only the property comprised in the vesting order, and any mortgagee or underleasee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property, and if there is no person claiming under the company who is willing to accept an order upon such terms, the court shall have power to vest the estate and interest of the company in the property in any person liable either personally or in a representative character, and either alone or jointly with the company, to perform the lessee's covenants in the lease, freed and discharged from all estates, incumbrances and interests created therein by the company.

 

  (7)          Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the company to the amount of the injury, and may accordingly prove the amount as a debt in the winding up.

 

500.    (1)         Where a creditor issues execution against any goods or land of a company or attaches any debt due to the company, and the company is subsequently wound up, the creditor shall not be entitled to retain the benefit of the execution or attachment against the liquidator in the winding up of the company, unless he has completed the execution or attachment before the commencement of the winding up:

 

Provided that -

 

(a)             where any creditor has had notice of a meeting having been called at which a resolution for voluntary winding up is to be proposed, the date on which the creditor so had notice shall, for the purposes of the foregoing provision, be substituted for the date of the commencement of the winding up;

 

(b)             if a person purchases in good faith under a sale by the sheriff any goods of a company on which an execution has been levied, he shall acquire a good title to them against the liquidator;

 

(c)             the rights conferred by this subsection on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.

 

  (2)          For the purposes of this section, an execution against goods shall be taken to be completed by seizure and sale, and an attachment of a debt shall be deemed to be completed by receipt of the debt, and an execution against land shall be deemed to be completed by seizure and, in the case of an equitable interest, by the appointment of a receiver.

 

501.    (1)         Subject to the provisions of subsection (3) of this section, where any goods of a company are taken in execution and before the sale thereof or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the sheriff that a provisional liquidator has been appointed or that a winding up order has been made or that a resolution for voluntary winding up has been passed, the sheriff shall, on being so required deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator, but the costs of the execution shall be a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part thereof, for the purpose of satisfying that charge.

 

  (2)          Subject to the provisions of subsection (3) of this section, where under an execution in respect of a judgment for a sum exceeding 100 the goods of a company are sold or money is paid in order to avoid sale, the sheriff shall deduct the costs of the execution from the proceeds of the sale or the money paid, and retain the balance for 14 days; and if within that time notice is served on him of a petition for the winding up of the company having been presented or of a meeting having been called at which there is to be proposed a resolution for the voluntary winding up of the company and an order is made or a resolution is passed, as the case may be, for the winding up of the company, the sheriff shall pay the balance to the liquidator, who shall be entitled to retain it as against the execution creditor.

 

  (3)          The rights conferred by this section on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.

 

  (4)          In this section and section 500 of this Decree -

 

(a)             "goods" includes chattels personal; and

 

(b)             "sheriff" includes any officer charged with the execution of a writ or other process.

 

 

Offences antecedent to or in course of winding-up

 

 

502.    (1)         If any person, being a past or present officer of a company which at the time of the commission of the alleged offence is being wound up, whether by or under the supervision of the court or voluntarily, or is subsequently ordered to be wound up by the court or subsequently passes a resolution for voluntary winding up -

 

(a)             does not to the best of his knowledge and belief fully and truly discover or deliver to the liquidator all the property, landed and personal, of the company, and how and to whom for what consideration and when the company disposed of any part thereof, except such part as has been disposed of in the ordinary way of the business of the company; or

 

(b)             does not deliver up to the liquidator, or as he directs, all such part of the real and personal property of the company as is in his custody or under his control, and which he is required by law to deliver up; or

 

(c)             does not deliver up to the liquidator; or as he directs, all books and papers in his custody or under his control belonging to the company and which he is required by law to deliver up; or

 

(d)             within 12 months next before the commencement of the winding up or at any time thereafter conceals any part of the property of the company to the value of 100 or upwards, or conceals any debt due to or from the company; or

 

(e)             within 12 months next before the commencement of the winding up or at the any time thereafter fraudulently removes any part of the property of the company to the value of 100 or upwards; or

 

(f)             makes any material omission in any statement relating to the affairs of the company; or

 

(g)             knowing or believing that a false debt has been proved by any person under the winding up, fails for the period of one month to inform the liquidator thereof; or

 

(h)             after the commencement of the winding up, prevents the production of any book or paper affecting or relating to the property or affairs of the company; or

 

(i)             within 12 months next before the commencement of the winding up or at any time thereafter -

 

(i)             conceals, destroys, mutilates or falsifies, or is privy to the concealment, destruction, mutilation or falsification of the book or paper affecting or relating to the property or affairs of the company; or

 

(ii)             makes or is privy to the making of any false entry in any book or paper affecting or relating to the property or affairs of the company; or

 

(iii)             fraudulently parts with, alters or makes any omission, in, or is privy to the fraudulently parting with, altering or making any omission in any document affecting or relating to the property or affairs of the company, or

 

(iv)             at any meeting of the creditors of the company, attempts to account for any part of the property of the company by fictitious losses or expenses; or

 

(v)             made the false representation or other fraud, obtained any property for or on behalf of the company on credit which the company does not subsequently pay for; or

 

(vi)             under the false pretence that the company is carrying on its business, obtains the credit, for or on behalf of the company any property which the company does not subsequently pay for; or

 

(vii)             pawns, pledges or disposes of any property of the company which has been obtained on credit and has not been paid for, unless such pawning, pledging, or disposing is in the ordinary way of the business of the company; or

 

(j)             is guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to the affairs of the company or to the winding up,

 

he shall be guilty of an offence and shall, in the case of the offences mentioned respectively in paragraphs (m), (n) and (o) of this subsection, be liable on conviction, to imprisonment for a term of 12 months, and in the case of any other offence under this subsection, shall be liable on conviction to imprisonment for a term of 2 years:

 

Provided that it shall be a good defence to a charge under any of paragraphs (a), (g), (c), (d), (f), (i), (vi) and (vii) of this subsection, if the accused proves that he had no intent to defraud, and to a charge under any of paragraphs (n), (f) and (j), if he proves he had no intention to conceal the state of affairs of the company or to defeat the law.

 

  (2)          Where any person pawns, pledges or disposes of any property in circumstances which amount to an offence under sub-paragraph (vii) of paragraph (i) of subsection (1) of this section, every person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged or disposed of in such circumstances as aforesaid shall be guilty of an offence, and on conviction thereof liable to be punished in the same way as if he had received the property knowing it to have been obtained in circumstance amounting to an offence.

 

  (3)           For the purposes of this section, "officer" includes any person in accordance with whose directions or instructions the directors of a company have been accustomed to act.

 

503.         If any officer or contributory of any company being wound up destroys, mutilates, alters or falsifies any books, papers or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the company with intent to defraud or deceive any person, he shall be guilty of an offence and liable on conviction to imprisonment for a term of 2 years or a fine of 2,500.

 

504.         If any person, being at the time of the commission of the alleged offence an officer of a company which is subsequently ordered to be wound up by the court or subsequently passes a resolution for voluntary winding up -

 

(a)             has by false pretences or by means of any other fraud induced any person to give credit to the company; or

 

(b)             with intent to defraud creditors of the company, has made or caused to be made any gift or transfer of or charge on, or has caused or connived at the levying of any execution against, the property of the company; or

 

(c)             with intent to defraud creditors of the company, has concealed or removed any part of the property of the company since, or within 2 months before, the date of any unsatisfied judgment or order for payment of money obtained against the company,

 

he shall be guilty of an offence and liable on conviction to imprisonment for a term of 2 years.

 

505.    (1)         If where a company is wound up it is shown that proper books of account were not kept by the company throughout the period of 2 years immediately proceeding the commencement of the winding up or the period between the incorporation of this company and the commencement of the winding up whichever is the shorter, every officer of the company who is in default shall, unless he shows that he acted honestly and that in the circumstances in which the business of the company was carried on the default was excusable, be guilty of an offence and be liable on conviction in the court to a fine of 250.

 

  (2)          For the purposes of this section, proper books of account shall be deemed not to have been kept in the case of any company if there have not been kept such books of accounts as are necessary to exhibit and explain the transactions and financial position of the trade or business of the company including books containing entries from day to day in sufficient detail of all cash received and cash paid; and, where the trade or business has involved dealing in goods, statements of the annual stock takings and (except in case of good sold by way of ordinary retail trade) of all goods sold and purchased, showing the goods and the buyers and sellers thereof in sufficient details to enable those goods and those buyers and sellers to be identified.

 

506.    (1)         If, in the course of the winding up of a company, it appears that any business of the company has been carried on in a reckless manner or with intent to defraud creditors of the company or creditors of any other person for any fraudulent purpose, the court, on the application of the official receiver, or the liquidator or any creditor or contributory of the company, may, if it thinks proper so to do, declare that any persons who were knowingly parties to the carrying on of the business in manner aforesaid shall be personally responsible, without any limitation of liability for all or any of the debts or other liabilities of the company as the court may direct.

 

  (2)          Where the court makes a declaration as to responsibility for debts or liabilities under subsection (1) of this section, it may give any direction it thinks proper for the purpose of giving effect to that declaration, and in particular the court may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the company to him, or on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in any mortgage or charge or any assets of the company held by or vested in him, or any company or person on his behalf, or any person claiming as assignee from or through the person liable or any company or person acting on his behalf, and may from time to time make any further order necessary for enforcing any charge imposed under this subsection.

 

  (3)          Where any business of a company is carried on with such intent or for such purpose as is mentioned in subsection (1) of this section (other than recklessly) every person who was knowingly a party to the carrying on of the business in manner aforesaid, shall be guilty of an offence, and liable on conviction to a fine of 2,500 or to imprisonment for a term of 2 years, or to both.

 

  (4)          In its operation this section shall have effect, so however that -

 

(a)             a declaration may be made notwithstanding that the person concerned may be criminally liable in respect of matters which are grounds for the declaration and a declaration, if made, shall be deemed to be a final judgment of the court;

 

(b)             the official receiver or the liquidator, as the case may be, on the hearing of an application to the court, may himself give evidence or call witness;

 

(c)             there shall be included in the expression "assignee" any person to whom or in whose favour by the direction of the person liable the debt, obligation, mortgage, or charge was created, issued or transferred, or the interest created, other than any person being an assignee for valuable consideration given in good faith and without notice of any of the matters on the ground of which the declaration is made;

 

(d)             "valuable consideration" shall not include consideration by way of marriage.

 

507.    (1)         If, in the course of winding up a company, it appears that any person who has taken part in the formation or promotion of the company, or any past or present director, manager or liquidator, or any officer of the company, has misapplied or retained or become liable or accountable for any money or property of the company, or been guilty of any misfeasance or breach of duty in relation to the company which would involve civil liability at the suit of the company, the court may, on the application of the official receiver, or of the liquidator, or of any creditor or contributory, examine into the conduct of the promoter, director, liquidator or officer, and compel him to repay or restore the money or property or any part thereof respectively with interest at such rates as the court thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust as the court thinks just.

 

  (2)          The provisions of this section shall extend to any receiver of the property of a company, and shall in any case have effect notwithstanding that the offence is one for which the offender may be criminally liable.

 

  (3)          Where an order for payment of money is made under this section, the order shall be deemed to be a final judgment of the court.

 

508.    (1)         If it appears to the court, in the course of winding up by, or subject to the supervision of, the Court that any past or present officer, or any member, of the member has been guilty of any offence in relation to the company for which he is criminally liable, the court may, either on the application of any person interested in the winding up or of its own motion direct the liquidator to refer the matter to the Attorney-General of the Federation.

 

  (2)          If it appears to the liquidator in the course of a voluntary winding up that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, he shall forthwith report the matter to the Attorney-General of the Federation and shall furnish him such information and give to him such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquidator and relating to the matter in question, as he may require.

 

  (3)          Where any report is made under subsection (2) of this section to the Attorney-General of the Federation he may, if he thinks fit, apply to the court for an order conferring on him or any person designated by him for the purpose with respect to the company concerned, all such powers of investigating the affairs of the company as are provided by this Decree in the case of a winding up by the court.

 

  (4)          If it appears to the court in the course of a voluntary winding up that any past or present officer, or any member, of the company has been guilty as aforesaid, and that no report with respect to the matter has been made by the liquidator to the Attorney-General of the Federation under subsection (2) of this section, the court may on the application of any person interested in the winding up or of its own motion, direct the liquidator to make such a report, and on a report being made accordingly, the provisions of this section shall have effect as though the report had been made in pursuance of the provisions of subsection (2) of this section.

 

  (5)          If, where any matter is reported or referred to the Attorney-General of the Federation under this section, he considers that the case is one in which a prosecution ought to be instituted, he shall institute proceedings accordingly, and it shall be the duty of the liquidator and of every more officer and agent of the company past and present (other than the defendant in the proceedings) to give him all assistance in connection with the prosecution which he is reasonably able to give and it is hereby declared for the purposes of this subsection, that the expression "agent" in relation to a company includes any banker or solicitor of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company.

 

  (6)          If any person fails or neglects to give assistance in the manner required by subsection (3) of this section, the court may, on the application of the Attorney-General of the Federation direct that person to comply with the requirements of the said subsection, and where any such application is made with respect to a liquidator, the court, may, unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him so to do, direct that the costs of the application shall be borne by the liquidator personally.

 

 

Supplementary Provisions as to Winding Up

 

 

509.     (1)         The following persons shall not be competent to be appointed or to act as liquidator of a company, whether in a winding up by, or under the supervision of the court, or in a voluntary up -

 

(a)             an infant ;

 

(b)             any one found by the court to be of unsound mind;

 

(c)             a body corporate;

 

(d)             an undischarged bankrupt;

 

(e)             any director of the company under liquidation;

 

(f)             any person convicted of any offence involving fraud, dishonesty, official corruption or moral turpitude and in respect of whom there is a subsisting order under section 254 of this Decree.

 

  (2)          Any appointment made in contravention of the provisions of subsection (1) of this section shall be void and if any of the persons named in paragraphs (c), (d) (e), and (f) of that subsection shall act as a liquidator of the company he shall be guilty of an offence and liable to a fine not exceeding 2,500 ion the case of a body corporate or, in the case of an individual, to imprisonment for a term not exceeding 6 months or to a fine not exceeding 500 or to both such imprisonment and fine.

 

510.         Any person who gives or agrees or offers to give to any member or creditor of a company any valuable consideration with a view to securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the company's liquidator, shall be guilty of an offence liable to a fine of 250.

 

511.    (1)         If a liquidator makes default in filing, delivering or making any return, account or other document, or in giving any notice which he is by law required to file, deliver, make or give, and fails to make good the default within 14 days after the service on him of a notice requiring him to do so, the court may, on an application made to the court by any contributory or creditor of the company or by the Commission, make an order directing the liquidator to make good the default within such time as is specified in the order.

 

  (2)          Any order under this section may provided that the costs of any expenses incidental to the application shall be borne by the liquidator and nothing in this section shall be taken to prejudice the operation of any enactment imposing penalties on a liquidator in respect of any such default.

 

512.    (1)         Where a company is being wound up, whether by or under the supervision of the court or voluntarily, 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 contain a statement that the company is being wound up.

 

  (2)          If default is made in complying with the provisions of this section, the company and any of the following persons who knowingly and wilfully authorises or permits the default, namely, any officer of the company, any liquidator of the company and any receiver or manager, shall be guilty of an offence and liable to a fine of 100.

 

513.    (1)         In the case of a winding up by the court, or a creditors voluntary winding up -

 

(a)             every assurance relating to any property of the company, or to any mortgage, charge or other encumbrance thereon or any right or interest in any property, in any event forming part of the assets of the company and which, after the execution of the assurance, either at law or in equity is, or remains part of the assets of the company; and

 

(b)             every power of attorney, proxy paper, writ, order, certificate, affidavit, bond or other instrument or writing relating solely to the property of any company which is being so wound up, or to any proceeding under any such winding up, shall be exempted from duties chargeable under any law, enactment relating to stamp duties.

 

  (2)          In this section, "assurance" includes any deed, conveyance, instrument, discharge, assignment or surrender.

 

514.         Where a company is being wound up, all books and papers of the company and of the liquidators shall, as between the contributories of the company, be prima facie evidence of the truth of all matters purporting to be therein recorded.

 

515.    (1)         Where a company is being wound up and is about to be dissolved, the books and papers of the company and of the liquidators may be disposed of as follows, that is to say -

 

(a)             in the case of a winding up by or subject to the supervision of the court, in such way as the court directs;

 

(b)             in the case of a members' voluntary winding up, in such way as the company by special resolution directs and, in the case of a creditors' voluntary winding up, in such way as the committee of inspection or, if there is no such committee, as the creditors of the company, may direct.

 

  (2)          After five years from the dissolution of the company no responsibility shall rest on the company, the liquidators, or any person to whom the custody of the books and papers has been committed, by reason of any book or paper not being forthcoming to any person claiming to be interested therein.

 

  (3)          Provision may be made by general rules for enabling the Commission to prevent, for such period (not exceeding 5 years from the dissolution of the company) as it may think proper, the destruction of the books and papers of a company which has been wound up, and for enabling any creditor or contributory of the company to make representations to it and to appeal to the court from any direction which may be given by it in the matter.

 

  (4)          If any person acts in contravention of any general rules made for the purposes of this section or of any direction of the Commission thereunder, he shall be guilty of an offence and liable to a fine of 1,000.

 

516.    (1)         If where a company is being wound up, the winding up is not concluded within one year after its commencement, the liquidator shall, at such intervals as may be prescribed, until the winding up is concluded, send to the Commission a statement in the prescribed form and containing the prescribed particulars with respect to the proceedings in and position of the liquidation.

 

  (2)          Any person stating himself in writing to be a creditor or contributory of the company shall be entitled, by himself or by his agent at all reasonable times, on payment of the prescribed fee, to inspect the statement, and to receive a copy thereof or extract therefrom; but any person untruthfully so stating himself to be creditor or contributory shall be guilty of contempt of court, and shall be punishable accordingly on the application of the liquidator or of the official receiver.

 

  (3)          If a liquidator fails to comply with the requirements of this section, he shall be guilty of an offence and liable to a fine of 50 for each day during which the default continues.

 

  (4)          If it appears from any such statement or otherwise that a liquidator has in his custody or under his control any money representing unclaimed or undistributed assets of the company which have remained unclaimed or undistributed for 6 months after the date of their receipt, the liquidator shall forthwith pay the same to the companies liquidation account mentioned in section 257 of this Decree and shall be entitled to a certificate of receipt in the prescribed form for the money so paid, which shall be an effectual discharge to him.

 

  (5)          For the purposes of ascertaining and getting in any money payable into the companies liquidation account in pursuance of this section, the following powers may be exercised by the authorities named, that is to say -

 

(a)             the Commission may at any time order any such liquidator to submit to it an account verified by affidavit of the sums received and paid by him under or in pursuance of the liquidation, and may direct and enforce an audit of the account and if the liquidator fails to submit the account within such reasonable time as the Commission directs, he shall be guilty of contempt of court and may, on the application of the Commission to the court made for the purpose, be punished accordingly; and

 

(b)             the Court may, if default is made in submitting the account referred to in paragraph (a) of this section -

 

(i)             by warrant addressed to any police officer, cause the liquidator to be arrested, and all books, papers and money or goods, relating to the liquidation in his possession to be seized and him and them to be safely kept until such time as the court may order;

 

(ii)             at any time by order addressed to the Postmaster-General of the Nigerian Postal Service Department require that, for a period of not more than 3 months, letters addressed to the liquidator and sent through the post, be in course of post, redirected, sent or delivered to or at any place or places mentioned in the order;

 

(iii)             summon the liquidator or his wife, or any person known or suspected to have in his possession any books, or papers relating to the liquidation, and any money or goods belonging to the liquidator or representing any unclaimed or undistributed assets of the company as aforesaid, or summon any person whom the court deems capable of giving information respecting any such books, papers, money, goods or other assets, and require any person summoned under this paragraph to produce documents in his custody or under his control relating to the liquidator's dealings with the property of the company;

 

(iv)             where any person on examination before it admits that he is indebted to the company, by order made on the application of the official receiver or liquidator direct payment to the official receiver or liquidator as the case may be, of the amount admitted, or any part thereof, either in full of discharge of the whole amount in question or not at such time and in such manner as the court thinks fit, with or without costs of the examination;

 

(v)             examine on oath, either the word of mouth or written interrogatories any person so brought before it concerning the liquidator and his dealings with the property of the company;

 

(vi)             if any person on examination before the court admits that he has in his possession any money properly payable into the company's liquidation account in pursuance of this section, order him to pay any such money forthwith into that account.

 

  (6)          Any person claiming to be entitled to money paid into the company's liquidation account in pursuance of this section may apply to the Commission for payment, and the Commission, if the liquidator certifies the claim may make an order for payment accordingly.

 

  (7)          An appeal shall lie to the Court by any person claiming to be dissatisfied with the decision of the Commission in respect of any claim made under this section.

 

517.         Where a resolution is passed at an adjourned meeting of any creditors or contributories of a company, the resolution shall, for all purposes, be treated as having been passed on the date on which it was ion fact passed, and shall not be deemed to have been passed on the date on which it was in fact passed, and shall not be deemed to have been passed on any earlier date.

 

518.    (1)         On the winding up of a company (whether by the court or voluntarily), the liquidator may, subject to the following provisions of this section, make any payment which the company has, before the commencement of the winding up, decided to make under section 649 of this Decree.

 

  (2)          The power which a company may exercise by virtue only of section 649 of this Decree may be exercised by the liquidator after the winding up has commenced if, after the company's liabilities have been fully satisfied and provision has been made for the costs of the winding up, the exercise of that power has been sanctioned by such resolution of the company as would be required of the company itself by subsection (3) of section 649 of this Decree before that commencement, as if paragraph (b) of that subsection were omitted and any other requirement applicable to its exercise by the company had been met.

 

  (3)          Any payment which may be made by a company under this section may be made out of the company's assets are available to the members on the winding up.

 

  (4)          On a winding up by the court, the exercise by the liquidator of his powers under this section shall be subject to the court's control and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of the power.

 

  (5)          Subsections (1) and (2) of this section shall have effect notwithstanding any rule or law or section 480 of this Decree.

 

 

Supplementary Powers of Court

 

 

519.    (1)         The court may, as to all matters relating to the winding up of a company, have regard to the wishes of the creditors or contributories of the company, as proved to it by any sufficient evidence, and may, if it thinks fit, for the purposes of ascertaining those wishes direct meetings of the creditors or contributories to be called, held and conducted in such manner as the court directs and may appoint a person to act as chairman of any such meeting and to report the result thereof to the court.

 

  (2)          In the case of creditors, regard shall be had to the value of each creditors' debt.

 

  (3)          In the case of contributories, regard shall be had to the number of votes conferred on each contributory by this Decree or the articles.

 

520.         In all proceedings under this Part of this Decree, all court, Judges, and persons judicially acting, and all officers, judicial or ministerial, of any court or employed in enforcing the process of any court, shall take judicial notice, of the signature of any officer of court and also of the official seal or stamp of a court appended to or impressed on any document made, issued or signed under the provisions of this Part of this Decree, or on any official copy of any such document.

 

521.    (1)         Documents purporting to be orders or certificates made or issued by the Attorney-General of the Federation or the Commission for the purposes of this Decree and to be signed by the Attorney-General of the Federation or the Accountant-General of the Federation, or under the seal of the Commission or signed by any person authorised in that behalf by them or, it, and in proper case to be sealed where necessary, shall be received in evidence and deemed to be such orders, or certificates without further proof unless the contrary is shown.

 

  (2)          A certificate signed by the Attorney-General of the Federation or the Accountant-General of the Federation or under the seal of the Commission that any order made, certificate issued, or act done, is the order, certificate or act of the Attorney-General of the Federation, Accountant-General of the Federation or the Commission as the case may be, shall be conclusive of the fact so certified.

 

522.    (1)         Where a company is in course of being wound up, all magistrates shall be commissioners for the purpose of taking evidence under this Decree and the court may refer the whole or any part of the examination of any witnesses under this Decree to any person hereby appointed commissioner.

 

  (2)          Every commissioner shall, in addition to any powers which he might lawfully exercise as a magistrate, have in the matter so referred to him all the same powers as the court of summoning and examining witnesses, of requiring the production or delivery of documents, of punishing defaults by witnesses and of allowing costs and expenses to witnesses.

 

  (3)          The examination so taken shall be returned or reported to the court in such manner as that court directs.

 

523.         An affidavit required to be sworn under the provisions or for the purposes of this Part of this Decree may be sworn in Nigeria or elsewhere in accordance with the provisions of the Oaths Act 1963 or under any other enactment or law providing for the administration of oaths and all courts, Judges, Commissioners, and persons acting judicially shall take judicial notice of the seal or stamp or signatures (as the case may be) of any court, Judge, person, consul, or vice-consul, attached, appended, or subscribed to any such affidavit, or to any other document to be used for the purposes of this Part of this Decree.

 

 

Provisions as to Dissolution

 

 

524.    (1)         Where a company has been dissolved, the court may at any time within 2 years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the court to be interested, make an order, upon such terms as the court may think fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.

 

  (2)          It shall be the duty of the person on whose application the order was made, within seven days after the making of the order, or such further time as the Court may allow, to deliver to the Commission for registration an office copy of the order, and if that person fails so to do he shall be liable to a fine of 25 for every day during which the default continues.

 

525.    (1)         Where the Commission has reasonable cause to believe that a company is not carrying on business or in operation, it may send to the company by post a letter inquiring whether the company is carrying on business or in operation.

 

  (2)          If the Commission does not within one month of sending the letter receive any answer thereto, it shall within 14 days after the expiration of the month send to the company by post a registered letter referring to the first letter, and stating that no answer thereto has been received, and that if an answer is not received to the second letter within one month from the date thereof, notice shall be published in the Gazette with a view to striking the name of the company off the register.

 

  (3)          If the Commission receives an answer to the effect that the company is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, it may publish in the Gazette, and send to the company by post, a notice that at the expiration of 3 months from the date of that notice the name of the company mentioned therein shall, unless cause is shown to the contrary, be struck off the register and the company shall be dissolved.

 

  (4)          If, in any case where a company is being wound up, the Commission has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company are fully wound up, and the returns required to be made by the liquidator have not been made for a period of 6 consecutive months, the Commission shall publish in the Gazette and send to the company or the liquidator, if any, a like notice is provided in subsection (3) of this section.

 

  (5)          At the expiration of the time mentioned in the notice the Commission may, unless cause to the contrary is previously shown by the company, strike its name off the greater, and shall publish notice thereof in the Gazette and on the publication in the Gazette of notice as aforesaid the company shall be dissolved:

 

Provided that -

 

(a)             The liability, if any, of every director, managing officer and member of the company shall continue and may be enforced as if the company had not been dissolved; and

 

(b)             nothing in this subsection shall affect the power of the court to wind up a company the name of which has been struck off the register.

 

  (6)          Any company or member or creditor aggrieved by the striking off the register of the company under this section may apply to the court at any time before the expiration of 20 years from the publication of the notice under subsection (5) of this section, for an order restoring the company to the register; and if the court is satisfied that, at the time of the striking off, the company was carrying on business or in operation, or that otherwise it is just to restore it to the register, the court may order the name of the company to be restored to the register; and an order under this subsection may include any directions the court thinks fit, and provision may be made therein for placing the company and all other persons in the same position, as nearly as may be, as if the name of the company had not been struck off the register; and upon delivery of an office copy to the Commission for registration, the order shall have effect according to its tenor, and may be registered accordingly.

 

  (7)          Any notice to a liquidator to be sent under this section may be addressed to the liquidator at his last known place of business, and any letter or notice to be sent under this section to a company may be addressed to the company at its registered or head office.

 

526.         Where a company is dissolved, all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution including leasehold property but not (including property held by the company on trust for any other person) shall, subject and without prejudice to any order which may at any time be made by the court under section 524 or 525 of this Decree, be deemed to be vested in the State without further assurance, as bona vacantia.

 

 

Central Accounts

 

 

527.    (1)         There shall continue to be an account called the Companies Liquidation Account, kept on behalf of the Commission by the Accountant-General of the Federation, into which shall be paid all moneys received by the Commission in respect of proceedings under this Decree in connection with the winding up of companies.

 

  (2)          All payments out of money standing to the credit of the Commission in the companies liquidation account shall be made by the Accountant-General in the prescribed manner.

 

528.    (1)         If the cash balance standing to the credit of the companies liquidation account is in excess of the amount which in the opinion of the Commission is required for the time being to answer demands in respect of companies' estates, the Commission shall notify the excess to the Accountant-General of the Federation and the Accountant-General of the Federation may invest the excess or any part thereof, in Government securities, to be placed to the credit of such account as he may deem fit in the circumstances.

 

  (2)          If any part of the money so invested is, in the opinion of the Commission, required to answer any demands in respect of companies' estates, the Commission shall notify to the Accountant-General of the Federation the amount so required, and the Accountant-General of the federation shall thereupon repay to the Commission such sum as may be required to the credit of the companies liquidation account, and for that purpose may direct the sale of such part of the securities as may be necessary.

 

  (3)          The dividends on investments under this section shall be paid to such account as the Accountant-General of the Federation may direct, and regard shall be had to the amount thus derived in fixing the fees payable in respect of proceedings in the winding up of companies.

 

529.    (1)         An account shall be kept by the Commission of the receipts and payments in the winding up of each company, and, when the cash balance standing to the credit of the account of any company is in excess of for the time being to answer demands in respect of that company's estate, the Commission shall, on the request of the committee, invest the amount not so required in Government securities, to be placed to the credit of the said account for the benefit of the company.

 

  (2)          If any part of the money so invested is, in the opinion of the committee of inspection, required to answer any demands in respect of the estate of the company, the Commissioner shall, on the request of that committee raise such sum as may be required by the sale of such part of the said securities as may be necessary.

 

  (3)          The dividends on investments under this section shall be paid to the credit of the company.

 

  (4)          Where the balance at the credit of any company's account in the hands of the commission exceeds 10,000 and the liquidator gives notice to the commission that the excess is not required for the purposes of the liquidation, the company shall be entitled to interest on the excess at the current bank rate.

 

 

Returns by Officers of Courts

 

 

530.         The officers of the courts acting in the winding up of companies shall make to the Commission such returns of the business of their respective courts and offices, at such times, and in such manner and form as may be prescribed, and from those returns the Commission shall cause books to be prepared which shall be opened for public information and searches.

 

 

Accounts to be prepared annually

 

 

531.    (1)         The Commission and every officer by whom fees are taken under this Decree in relation to the winding up of companies shall make returns and give information to the Accountant-General of the Federation in such form as he may require; and the accounts of the Commission relating to the winding up of companies shall be audited as soon as may be after the end of each year in the manner prescribed by the Audit Act.

 

  (2)          The Accountant-General of the Federation shall, before the end of each year in which the audit is made, prepare for submission to the National Council of Ministers an account of the winding up of companies as audited by the Director of Audit of the Federation, showing in respect of such winding up, the receipts and expenditure during the previous year, and any other matters which the National Council of Ministers or the Minister, as the case may be, may require.

 

 

Chapter 6. 

Winding up of Unregistered Companies

 

 

532.         Subject to the provisions of this Part of this Decree, an unregistered company may be wound up under this Decree and all the provisions of this Decree, with respect to winding up shall apply to an unregistered company, with the following exceptions -

 

(a)             the principal place of business of an unregistered company shall for all the purposes of the winding up be deemed to be the registered office of the company;

 

(b)             an unregistered company shall not be wound up under this Decree voluntarily or subject to supervision; 

 

(c)            an unregistered company may be wound up if -

 

(i)             the company is dissolved, or has ceased to carry on business or is carrying on business only for the purpose of winding up its affairs;

 

(ii)             the company is unable to pay its debts;

 

(iii)             the court is of opinion that it is just and equitable that the company should be wound up;

 

(d)             an unregistered company shall, for purposes of this Decree be deemed to be unable to pay its debts if -

 

(i)             a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding 100 then due, has served on the company, by leaving at its principal place of business, or by delivering to the secretary or some director, manager, or principal officer of the company, or by otherwise serving in such manner as the court may approve or direct, a demand under his hand requiring the company to pay the sum so due, and the company has for 21 days after the service of the demand neglected to pay the sum, or to secure or compound for it to the satisfaction of the creditor;

 

(ii)             any action or other proceedings has been instituted against any member for any debt or demand due from the company, or from him in his capacity as a member, and notice in writing of the institution of the action or proceeding having been served on the company by leaving it at its principal place of business, or by delivering it tot he secretary, or some director, manager, or principal officer of the company, or by otherwise serving the notice in such manner as the court may approve or direct, the company has not within 28 days after service of the notice secured, or compounded for the debt or demand or procured the action or proceeding to be stayed, or within that period has not indemnified the defendant to his reasonable satisfaction against the action or proceeding, and against all costs, damages, and expenses to be incurred by him by reason of the same;

 

(iii)             execution or other process issued on a judgment, decree, or order obtained in any court in favour of a creditor against the company, or any member thereof as such, or any person authorised to be sued as nominal defendant on behalf of the company, is returned unsatisfied;

 

(iv)             it is otherwise proved to the satisfaction of the Court that the company is unable to pay its debts.

 

533.    (1)         In the event of an unregistered company being wound up every person shall be deemed to be a contributory who is liable to pay or contribute to the payment of any debt or liability of the company, or to pay or contribute tot he payment of any sum for the adjustment of the rights of the members among themselves, or to pay or contribute to the payment of the costs and expenses of winding up the company, and every contributory shall be liable to contribute to the assets of the company all sums due from him in respect of any such liability as aforesaid.

 

  (2)          In the event of the death, bankruptcy, or insolvency of any contributory, the provisions of this Decree with respect to the personal representatives, heirs, and devisees of deceased contributories, and the trustees of bankrupt or insolvent contributories as the case may be shall apply.

 

534.         The provisions of this Decree with respect to staying and restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order shall, in the case of an unregistered company, where the application to stay or restrain is by a creditor, extend to actions and proceedings against any contributory of the company.

 

535.         Where an order has been made for winding up an unregistered company, no action or proceeding shall be proceeded with or commenced against any contributory of the company in respect of any debt of the company except by leave of the court, and subject to such terms as the court may impose.

 

536.         The provisions of this Part of this Decree with respect to unregistered companies shall be in addition to and not in restriction of any provisions herein before in this Decree contained with respect to winding up companies by the court, and the court or liquidator may exercise any powers to do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies formed and registered under this Decree; but an unregistered company shall not, except in the event of its being wound up, be deemed to be a company under this Decree, and then only to the extent provided by this Part of this Decree.

 

 

 

Part XVI 

Arrangement and Compromise

 

 

537.         In this Part of this Decree, the expression "arrangement" means any change in the rights or liabilities of members, debenture holders or creditors of a company or any class of them or in the regulation of a company, other than a change effected under any other provision of this Decree or by the unanimous agreement of all parties affected thereby.

 

538.    (1)         With a view to effecting any arrangement, a company may by special resolution resolve that the company be put into members' voluntary winding up and that the liquidator be authorised to sell the whole or part of its undertaking or assets to another body corporate, whether a company within the meaning of this Decree or not (in this section called "the transferee company") in consideration or part consideration of fully paid shares, and to distribute the same in specie among the members of the company in accordance with their rights in the liquidation.

 

  (2)          Any sale or distribution in pursuance of a special resolution under this section shall be binding on the company and all members thereof and each member shall be deemed t have agreed with the transferee company to accept the fully paid shares, debentures, policies, cash or other like interests to which he is entitled under such distribution:

 

Provided that if -

 

(a)             If, within one year from the date of the passing of any special resolution as is referred to in subsection (1) of this section, an order is made under sections 310 to 312 of this Decree dealing with relief on the grounds of unfairly prejudicial and oppressive conduct or for the winding up of the company under a creditors' voluntary winding up, the arrangement for the sale and distribution shall not be valid unless sanctioned by the court;

 

(b)             any member of the company, by writing addressed to the liquidator and left at the registered office or head office of the company, within 30 days after the passing of the resolution, dissents therefrom in respect of any of the shares held by him, the liquidator shall either abstain from carrying the resolution into effect or shall purchase such shares at a price to be determined in the manner provided by subsection (4) of this section.

 

  (3)          Any member who fails to signify his dissent in accordance with subsection (2) of this section shall be deemed to have accepted the resolution;

 

  (4)          If the liquidator elects to purchase the shares of any member who has expressed his dissent in accordance with subsection (2) of this section, the price payable therefor shall be determined by agreement in the case of a private company in which aliens do not participate, and in the case of a public company or a pirate company in which aliens participate, by the Securities and Exchange Commission:

 

Provided that in the case of a private company in which no aliens participate-

 

(a)             such price shall be determined by estimating what the member concerned would have received had the whole of the undertaking of the company been sold as a going concern for cash to a willing buyer and the proceeds, less the cost of winding up, been divided amongst the members in accordance with their rights;

 

(b)             the purchase money shall be paid by the company before the company is dissolved and be raised by the liquidator or, in default of any direction in the special resolution, in such manner as he may think fit as part of the expenses of the winding up.

 

  (5)          Nothing contained in this section shall authorise any variation or abrogation of the rights of any creditor of the company.

 

  (6)          If any company, otherwise than under the foregoing provisions of this section, sells resolves to sell the whole or part of its undertaking or assets to another body corporate in consideration or part consideration of any shares, debentures, policies or other like interest in that body corporate and resolves to distribute the same in specie among members of the company may by notice in writing addressed to the company and left at the registered office or head office of the company within 30 days after the passing of the resolution authorising such distribution, require the company either to abstain from carrying the resolution into effect or to purchase any of his shares at a price to be determined in the manner provided by subsection (4) of this section.

 

  (7)          Nothing contained in subsection (6) of this section shall authorise any company to purchase its own shares or make any distributions to its shareholders except in accordance with the provisions of this Decree.

 

539.    (1)         Where a compromise or arrangement is proposed between a company and its creditors or any class of them, the court may, on the application, in a summary way, of the company or any of its creditors or members or, in the case of a company being wound up, of he liquidator, order a meeting of the creditors or class of creditors, or of the members of the company, or class of members, as the case may be, to be summoned in such a manner as the court directs.

 

  (2)          If a majority representing not less than three-quarters in value of the shares of members or class of members, or of the interest of creditors or class of creditors, as the case may be, being present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement may be referred by the court to the Securities and Exchange Commission which shall appoint one or more inspectors to investigate the fairness of the said compromise or arrangement and to make a written report thereon to the court within a time specified by the court.

 

  (3)          If the court is satisfied as to the fairness of the compromise or arrangement, it shall sanction the same and the compromise or arrangement shall be binding on all the creditors or the class of creditors or on the member or the class of members as the case of a company in the course of being wound up, on the liquidator and contributories of the company.

 

  (4)          An order made under subsection (3) of this section shall have no effect until a certified true copy of the order has been delivered by the company to the Commission for registration and a copy of every such order shall be annexed to every copy of the memorandum of the company issued after the order been made.

 

  (5)          If a company makes default in complying with subsection (4) of this section, the company and every officer of the company who is in default shall be liable to a fine of 5 for each copy in respect of which default is made.

 

  (6)          In this section and section 450 of this Decree, "company" means any company liable to be wound up under this Decree.

 

540.    (1)         Where a meeting of creditor or any class of creditors or of members or any class of members is summoned under section 539 of this Decree, shall -

 

(a)             with every notice summoning the meeting which is sent to a credit member, be sent also a statement explaining the effect of the compromise or arrangement and in particular stating any material interests of the directors of the company, whether as directors or as members as creditors of the company or otherwise and the effect thereon of the compromise or arrangement in so far as it is different from the effect on the like interest of other persons; and

 

(b)             in every notice summoning the meeting which is given by advertisement, be included such a statement as aforesaid, or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement as aforesaid.

 

  (2)          Where the compromise or arrangement affects the rights of debenture holders of the company, the statement shall give the like explanation as respects the trustees of any deed for securing the issue of the debenture as it is required to give as respects the company's directors.

 

  (3)          Where a notice given by advertisement includes a notification that copies of a statement explaining the effects of the compromise or arrangement proposed can be obtained by creditors or members entitled to attend the meeting, every such creditor or member shall, on making application in the manner indicated by the notice, be furnished by the company free of charge with a copy of the statement.

 

  (4)          Where a company makes default in complying with any requirement of this section, the company and every officer of the company who is in default shall be liable to a fine of 1,500 and for the purpose of this subsection any liquidator of the company and any trustee of a deed for securing the issue of debentures of the company shall be deemed to be an officer of the company:

 

Provided that a person shall not be liable under this subsection, if that person shows that the default was due to refusal of any other person, being a director or trustee for debenture holders, to supply the necessary particulars as to his interests.

 

  (5)          It shall be the duty of any director of the company and of any trustee for debenture holders of the company to give notice to the company of such matters relating to himself as may be necessary for the purpose of this section, and any person who makes default in complying with this subsection shall be liable to a fine of 100.

 

 

 

Part XVII

Dealings in Companies Securities

 

The entire part (Section 541   623) has been repealed by section 263 (1)(d) of the Investments and Securities Decree No 45 of 1999

 

 

 

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