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MRL3701 Assignment 2 Due 13 April 2024, Exams of Marketing Business-to-business (B2B)

University of Connecticut (UConn) - StamfordMarketing Business-to-business (B2B)

MRL3701 Assignment 2 Due 13 April 2024 WINDING UP MEANS - ans -essentially the procedure by which a company's assets are sold, its debts are paid, and any money left over is divided amongst the shareholders according to their rights. WINDING UP OF COMPANIES IS REGULATED BY THE FOLLOWING LEGISLATIVE PROVISIONS - ans -1. Section 79 - 81 of the Companies Act 71. Winding up of solvent companies 2. Chapter 14 of the Companies Act. 3. Various provision of the Insolvency Act. MODES OF WINDING UP AND ALTERNATIVES TO WINDING UP - ans -Company may be wound up in either of the two ways: 1. By the court 2. voluntarily

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MRL3701 Assignment 2 Due 13 April 2024
WINDING UP MEANS - ans -essentially the procedure by which a company's assets
are sold, its debts are paid, and any money left over is divided amongst the
shareholders according to their rights.
WINDING UP OF COMPANIES IS REGULATED BY THE FOLLOWING LEGISLATIVE
PROVISIONS - ans -1. Section 79 - 81 of the Companies Act 71. Winding up of solvent
companies
2. Chapter 14 of the Companies Act.
3. Various provision of the Insolvency Act.
MODES OF WINDING UP AND ALTERNATIVES TO WINDING UP - ans -Company
may be wound up in either of the two ways:
1. By the court
2. voluntarily
WINDING UP BY THE COURT - ans -Sometimes called compulsory winding up is
initiated by an application to court. Application is usually brought by a creditor in the
case of an insolvent company and a shareholder in the case of a solvent company
VOLUNTARY WINDING UP - ans -Initiated by a special resolution of the shareholders.
The special resolution has to state whether the winding up is to be conducted by the
creditors or by the shareholders, and a voluntary winding up by the company in the case
of a solvent company.
JURISDICTION OF COURT - ans -under S12(1) of the 1973 Act the court which had
jurisdiction in regard to winding up was the High Court having jurisdiction over the area
in which the company had its registered office or main place of business.
WHEN COMPANY MAY BE WOUND UP BY COURT - ans -1. Special Resolution
2. Failure to commence of continue with business
3. loss of capital
4. inability to pay debts
5.dissolution of external company
6. just and equitable
7.Conversion of voluntary winding up into winding up by court
8. no reasonable prospect of business rescue succeeding
9. termination of business rescue proceedings
10. Deadlock my management or voting
11. Fraud, illegality or misapplication of company assets
12. failure to comply with compliance notice.
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MRL3701 Assignment 2 Due 13 April 2024

WINDING UP MEANS - ans - essentially the procedure by which a company's assets are sold, its debts are paid, and any money left over is divided amongst the shareholders according to their rights. WINDING UP OF COMPANIES IS REGULATED BY THE FOLLOWING LEGISLATIVE PROVISIONS - ans - 1. Section 79 - 81 of the Companies Act 71. Winding up of solvent companies

  1. Chapter 14 of the Companies Act.
  2. Various provision of the Insolvency Act. MODES OF WINDING UP AND ALTERNATIVES TO WINDING UP - ans - Company may be wound up in either of the two ways:
  3. By the court
  4. voluntarily WINDING UP BY THE COURT - ans - Sometimes called compulsory winding up is initiated by an application to court. Application is usually brought by a creditor in the case of an insolvent company and a shareholder in the case of a solvent company VOLUNTARY WINDING UP - ans - Initiated by a special resolution of the shareholders. The special resolution has to state whether the winding up is to be conducted by the creditors or by the shareholders, and a voluntary winding up by the company in the case of a solvent company. JURISDICTION OF COURT - ans - under S12(1) of the 1973 Act the court which had jurisdiction in regard to winding up was the High Court having jurisdiction over the area in which the company had its registered office or main place of business. WHEN COMPANY MAY BE WOUND UP BY COURT - ans - 1. Special Resolution
  5. Failure to commence of continue with business
  6. loss of capital
  7. inability to pay debts 5.dissolution of external company
  8. just and equitable 7.Conversion of voluntary winding up into winding up by court
  9. no reasonable prospect of business rescue succeeding
  10. termination of business rescue proceedings
  11. Deadlock my management or voting
  12. Fraud, illegality or misapplication of company assets
  13. failure to comply with compliance notice.

FAILURE TO COMMENCE OR CONTINUE WITH BUSINESS - ans - Court may wind up company if it has not commenced its business within a year from its incorporation or if it has suspended it business for a whole year LOSS OF CAPITAL - ans - If 75% of its issued share capital has been lost or become useless for its business. INABILITY TO PAY DEBTS - ans - Unable to pay debt as described in S345. Cannot be relied upon if the company is solvent despite being unable to its debts. S345 - COMPANY DEEMED TO BE UNABLE TO PAY DEBTS IN THE FOLLOWING CASES - ans - 1. Creditor to whom company is indebted for at least R100 has left a demand for payment at company's registered office and the company has neglected for three weeks thereafter to pay, secure, compromise the claim to satisfaction of creditor.

  1. A warrant of execution issued on a judgement against the company has been returned by the sheriff with an endorsement that he did not find disposable property sufficient to satisfy the judgement, or that the disposable property he found did not, upon sale, satisfy the process.
  2. It is proved to the satisfaction of the court that the company is unable to pay its debts. Court must take into account the contingent and prospective liabilities of the company. DISSOLUTION OF EXTERNAL COMPANY - ans - If external company has been dissolved in the country in which it was incorporated or has ceased to carry on business, or is carrying on business only for the purpose of wining up its affairs. Relates only to insolvent external companies. JUST AND EQUITABLE - ans - That it is just and equitable that the company should be wound up. Courts have held that it is just and equitable to wind up a company in the following instances.
  3. Where main object for which the company was formed is not possible of being attained.
  4. where company lacked infrastructure of its own and which was unable to work because of deadlock between its shareholders.
  5. where company's objects are illegal, or the company was formed to defraud the persons invited to subscribe for its shares.
  6. Where there is justifiable lack of confidence in the conduct and management of the company's affairs.
  1. company, its directors, prescribed officers or other persons in control of it are acting or have acted in a manner that is fraudulent or otherwise illegal; the Commission or panel has issued a compliance notice in respect of that conduct and the company has failed to comply with the notice. 2.within the previous 5 years, enforcement procedures in terms of the 2008 Act or The CC Act were taken against the company, its directors or prescribed officers or other person in control of it for substantially the same conduct, resulting in an administrative fine, or conviction for an offence. PARTIES WHO MAY APPLY FOR WINDING UP OF INSOLVENT COMPANY - ans - 1. The company
  2. One or more creditors
  3. one or more of its members
  4. any or all of the above
  5. the master
  6. a provisional or final judicial manager THE COMPANY ITSELF MAY BRING THE APPLICATION S346 (1)(a) - ans - Court held that the directors could validly resolve to apply as the word company does not necessarily mean the company in general meeting and the concept of managing the business of a company could include deciding that i should apply or its winding up. The 2008 Act provides: Directors are to manage the company's business and affairs and further states that the board may exercise all the powers and perform all the functions of the company except where the act or the company's memorandum provides otherwise. Submitted that requiring only a board decision is the preferable approach ONE OR MORE CREDITORS - ans - including contingent or prospective creditors. Creditor's claims need not equal or exceed any particular amount as it must in an application for compulsory sequestration. A contingent or prospective creditor is one whit a claim against the company which will only become enforceable in the future. Does not include loan of a preferent shareholder. ONE OR MORE OF ITS MEMBERS - ans - Or by person appointed as executor, trustee, liquidator, curator, or guardian in respect of a member who is decease, insolvent or under a disability.

Membe rmay not apply unless he has been registered as such in the reigster of members for at least six months prior to the date of the application or unless the shares he holds have eveloped upon him through the death of a former holder. Member may not apply on the grounds mentioned in s23.2.2(i) (vi) and (vii) above MEMBERS OF COMPANY HAVE VARIOUS WAYS OF INITIATING THE WINDING UP OF THE COMPANY - ans - 1. the members may resolve by special resolution to proceed with a members voluntary winding up of the company

  1. the members may resolve by special resolution to proceed with a creditors voluntary winding up of the company
  2. members may resolve by special resolution that the company should apply to court for a winding up order. Application may be founded on any of the grounds stated in 2 344, including fact that company is unable to pay its debts.
  3. one or more members may apply to court for a winding up order. Application may only be brought on some of the grounds stated in s344. Cannot be founded on the inability of the company to pay its debts. Application for winding up order on this ground can only be brought by the company itself (acting pursuant to a special, or perhaps a directors resolution) on one or more creditors of the company, the Master or a provisional or final judicial manager ANY OR ALL OF THE ABOVE PARTIES - ans - Application may be brought jointly by some or all of the parties mentioned above company, creditors and members THE MASTER - ans - May apply to convert a voluntary winding up into a winding up by the court. Only instance where Master may apply for a winding up of a company. Reason why is usually to make available the procedure for examination and enquiry under ss417 and 418. Most probable ground for winding up on which the Master will base his application is the inability of the company to pay its debts A PROVISIONAL OR FINAL JUDICIAL MANAGER - ans - May bring application where the provisional order of judicial management is discharged. this provision does not preclude a creditor from applying for the winding up of a company under judicial management.

NOTIFICATION OF CERTAIN INTERESTED PARTIES - ans - 1. Every registered trade union that represents any of the company employees

  1. the employees themselves by affixing a copy of the notice to any notice board accessible by the applicant and the employees inside the company premises 3.SARS
  2. company, unless the application is made by the company, or unless the court, in its discretion, dispenses with the furnishing of a copy where the court is satisfied that it would be in the interests of the company or of the creditors to dispense with it. Applicant must before before or at hearing, file an affidavit by person who furnished a copy of the application, stating how the above requirements were met. POWERS OF COURT - ans - Court may not grant a winding up order on the grounds listed in s 81(1)(e) or s81(1)(f) if before the conclusion of the court proceedings the director or directors implication in that conduct have resigned or have been removed and the remaining directors were not materially implicated, of if one or more shareholders have applied for an order of delinquency against the director or director responsible for the misconduct and the court is satisfied that their removal would bring an end to the misconduct. Court may grant or dismiss any application for winding up, or adjourn the hearing thereof, conditionally or unconditionally, or may any interim order or any other order it may deem just. Act does not oblige court to make a provisional order and it may, if it deems it appropriate make a final order immediately, for instance where the issues have been fully ventilated and nothing has been suggested or put forward to indicate that further relevant facts would be forthcoming if a rule nisi were issued. Courts power to grant an application for winding up is discretionary, irrespective of the ground on which it is sought. Were court is face with the choice between business rescue and winding up the former must be preferred. Winding up is more appropriate than business rescue when dispositions made by the company may need to be set aside or where the company is involved in legal disputes, particularly pertaining to contracts such as lease of immovable property,that could simply be terminated by a liquidator, where there is a deadlock between the shareholders, or where there is a lack of up to date financial information about the company.

Court may not refuse a winding up order merely because the company has no assets or because its assets have been mortgaged to their full value. Where the company disputes allegations of f VOLUNTARY WINDING UP - ans - An insolvent company may be wound up voluntarily if it has adopted a special resolution to that effect and that resolution has been registered by the Commission in accordance with the formalities laid down in s Special resolution to wind up company must state whether the winding up is a members' voluntary winding up or a creditors' voluntary winding up. Solvent company may be wound up voluntarily if it has adopted a special resolution to this effect and filed it with the Commission. MEMBERS' VOLUNTARY WINDING UP AND VOLUNTARY WINDING UP COMPANY

  • ans - Can take place only if the company is able to pay its debts in full. before process can proceed
  1. security must be furnished to the satisfaction of the Maser for payment of the debts of the company within 12 months from the beginning of the winding up, or
  2. the Master must dispense with such security. May do this only upon receiving an affidavit by the directors of the company that it has no debts and a certificate by the auditor of the company that to the best of his knowledge and belief, and according to the records of the company it has no debts MEMBERS VOLUNTARY WINDING UP OR VOLUNTARY WINDING UP OF THE COMPANY MAY BE RESORTED TO FOR THE FOLLOWING REASONS - ans - 1. purpose for which company was formed may have been fulfilled
  3. members responsible for running the company may no longer be on amicable terms Provision for voluntary winding up by special resolution of shareholders cannot be excluded from a company's articles of association and a court will not interfere with the exercise by the requisite majority of shareholders of the right to resolve that the company be voluntarily wound up. CREDITORS' VOLUNTARY WINDING UP - ans - May be resorted to where the company is unable to pay its debts. Can be of a solvent or an insolvent company. Solvent company might wish to resort to this type of winding up where it has debts but is unable or unwilling to furnish security for the full payment of its debts within 12 months.
  1. the company's property is deemed to be in the custody and under the control of the Master until a provisional liquidator has been appointed and has assumed office. Company thus retains the dominium of its property.
  2. the company may not continue with its business except in so far as may be necessary for its beneficial winding up. SUBSEQUENT UNAUTHORISED DISPOSITIONS VOID - ans - After winding up of a company has commenced a. any transfer of share of the company without the liquidators permission is void b. if the company is unable to pay its debts, every disposition of its property not sanctioned by the court is void No set-off can take place unless mutuality of the respective claims existed at the time of the winding up. Court's discretion applies only to dispositions after the deemed commencement of winding up but before a winding up order has been made. STAY OF PROCEEDINGS - ans - One winding up order is made or a special resolution for voluntary winding-up is registered or filed, all civil proceedings by or against the company are suspended until the appointment of a liquidator. Any attachment or execution put in force against the assets of the company is void. An attachment is put in force within the meaning of these words if in pursuance of a writ of execution the sheriff of the court takes possession of the property. If sale in execution took place before commencement of the wining up but has not been completed the sheriff may not give transfer to the buyer. After appointment of the liquidator, civil proceedings against the company may continue or commence provided the litigant concerned, within the four weeks of the liquidator's appointment,gives him at least three weeks notice in writing before continuing or commencing the proceedings. If notice of continuance of the proceedings is not given the proceedings are considered to have been abandoned unless the court directs otherwise. NOTICE OF WINDING UP - ans - Master must on receipt of winding up order give notice of wining up in the Gazette.

Registrar of Court mus transmit a copy of the winding up order to certain sheriffs and Registrars of Deeds COPY OF WINDING UP ORDER MUST ALSO BE SERVED ON - ans - 1. any registered trade union that represents the company's employees

  1. the company's employees themselves by affixing a copy of the application to a notice board accessible to them inside the debtor's premises.
  2. SARS
  3. company unless it made the application. To serve winding up order, sheriff must establish whether a registered trade union represents the company's employees and whether the employees have access to a notice board inside the company premises. INSOLVENT COMPANY WHICH HAS PASSED A RESOLUTION FOR ITS VOLUNTARY WINDING UP - ans - Must:
  4. within 28 days after registration of the resolution, give notice of voluntary wining up in the Gazette and lodge a certified copy of the resolution with the Master together with the following a. in the case of a members voluntary winding up, a certified copy of any resolution passed by the company nominating a liquidator b. in the case of a creditors' voluntary winding up, two certified copies of a statement setting out the affairs of the company. CREDITORS MEETINGS - ans - At least two meetings must be held First must be called as soon as possible after the final winding up order has been made by the court or the special resolution for a creditors' voluntary winding up has been registered. Purpose of first meeting is to allow creditors to consider the company's statement of affairs, prov claims against the company, and nominate a liquidator. Further meetings of creditors must be authorised by the court. COMPANY UNABLE TO PAY ITS DEBTS - ans - directors and officers are obliged to attend the first and second meetings of creditors. MEMBERS MEETINGS WINDING UP BY COURT OR CREDITORS' VOLUNTARY WINDING UP - ans - Meeting of shareholders or members must be held.

a. an insolvent b. a minor or any other person under legal disability c. a person declared to be incapable of being appointed as a liquidator for dishonesty or abuse of his position d. a person who has been removed from an office of trust by the court, or who has been disqualified from being a director e. a body corporate f. a person who has, at any time, been convicted of theft, fraud, forgery, uttering a forged instrument, or perjury, and has been sentenced to imprisonment without the option of a fine or to a fine exceeding R g. a person who has, by misrepresentation or reward, induced or attempted to induce any person to vote for or nominate him as liquidator or have him appointed as liquidator. h. a person who does not reside in the the RSA. i. a person who has acted as director, officer, or auditor of that company at any time within the 12 months before the winding up j. an agent authorized to vote for or on behalf of a creditor at a meeting of creditors who acts or purports to act under such authority REMOVAL OF LIQUIDATOR FROM OFFICE. - ans - MASTER may remove liquidator if:

  1. the liquidator was not qualified for nomination or appointment, or has become disqualified, or if his nomination or appointment was for any other reason illegal.
  2. the liquidator has not performed his duties satisfactorily
  3. the liquidator's estate has become insolvent or he has become mentally or physically incapable of acting as liquidator
  4. the majority in number and value of the creditors or, in the case of a members voluntary winding up, the majority of the members, has requested the Master in writing to remove the liquidator.
  5. in the opinion of the master the liquidator is no longer suitable to be the liquidator of that company. If master does not remove the liquidator the court may in any of the above circumstances or for any other good cause, remove the liquidator on application by the Master or any other interested person. IMPEACABLE TRANSACTIONS - ans - In terms of S340(1) if a company is wound up and unable to pay its debts, every disposition of its property may be set aside, if the disposition, had it been made by an individual, could be set aside if he became insolvent. Provision of the law of insolvency will apply mutatis mutandis to the disposition.