| Winding-up
The winding-up or liquidation of a company is
governed by the provisions of the Companies Ordinance 1981 (as amended). In TCI
liquidations may be accomplished either voluntarily, by resolution of the shareholders or
compulsorily, by order of the court. A third but less satisfactory alternative (from the
perspective of potential ongoing liability relating to an active company) is the routine
striking off the Register of defunct companies either by request or for failure to file
annual returns.
Voluntary winding-up
A company may be wound-up voluntarily:
- When the period fixed for the duration of the company by its Articles
of Association expires;
- The occurrence of an event specified in the Articles of Association
as being the time when dissolution will take place and when an ordinary resolution to that
effect has been passed.
- Upon the triggering of a specified event and without the need for an
ordinary resolution.
Voluntary winding-ups usually take place upon the passing of a special resolution of
the shareholders or where the company cannot continue its business by reason of its
liabilities upon the passing of an ordinary resolution of the shareholders.
Once the winding-up has commenced, the company must cease to carry
on its business except as necessary for the winding-up. The liquidation is carried out by
one or more liquidators appointed by the company in general meeting or, in the case of an
automatic winding-up, appointed by the Articles of Association and upon such appointment
the directors powers normally cease.
The commencement of the winding-up
is required to be gazetted. Upon the
completion of the winding-up the liquidator calls a general meeting at which accounts
are presented to the shareholders. A notice relating to this
meeting must be published in the TCI legal Gazette at least one month before the meeting.
The liquidator makes a return of the meeting to the Registrar of Companies and three
months after the registration of such return, the company will be deemed to be dissolved.
Where a creditor believes that his rights are prejudiced by a
voluntary winding-up he may petition the Supreme Court of the Turks & Caicos Islands
and if the courts see fit it may order that such winding-up continue under its
supervision.
Winding-up by the Court
A company may be wound-up by the court in certain circumstances.
The most common of which are that the company is unable to pay its debts or that the court
is of the opinion that it is just an equitable that the company should be wound-up.
Winding-up is commenced by petition presented by the company, by a contributory or by a
creditor and the company is deemed to be in liquidation from the time of the presentation
of the petition. The company will be dissolved from a date of an order of the Supreme
Court to that effect and this order will be made when the liquidator appointed by the
court reports that the liquidation is complete.
Striking off defunct companies
Where the Registrar of Companies has reason to believe that a
company is not in operation or is not carrying on business, he may strike the company off
the register and the company will thereupon be dissolved. However, a creditor or any
member aggrieved by the striking off may apply to the courts to have the company
reinstated. A fee equal to the relevant incorporation fee for the company is payable upon
reinstatement plus all unpaid annual fees. If such a company has assets at the time of
striking off, those assets vest in the Governor of the Turks & Caicos Islands.
Finbar F. Dempsey & Company handles voluntary
liquidations where companies are not insolvent. Our attorneys will also provide
advice and assistance in insolvency and where a creditors winding up has been initiated
but typically direct clients to established accountancy firms in the islands to act as
liquidators in such circumstances.
Should you be considering liquidating an ordinary or
exempted TCI company, please do not hesitate to contact us for guidance. |
