Tuesday, 22 April 2014

12.18.7 (Distinction Between Members' Voluntary Winding up and Creditor's Voluntary Winding up)

1. Members' voluntary winding up can be resorted to by solvent companies and thus requires the filing of a 'declaration of solvency' by the directors of the company with the Registrar; Creditors' winding up, on the other hand, is resorted to by insolvent companies.

2. In members' voluntary winding up there is no need to have creditor's meeting.But in the case of creditors' voluntary winding up, a meeting of the creditors must be called immediately after the meeting of the members.

3. Liquidator, in the case of members' winding up is appointed by the members. But in the case of creditors' voluntary winding up, if the members and creditors nominate two different persons as liquidators, creditors' nominee shall become the liquidator.


4. In the case of creditor's voluntary winding up, if the creditors so wish a 'Committee of Inspection' may be appointed, In the case of members' voluntary winding up, there is no provision for any such committee.

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