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CS Professional · Insolvency and Bankruptcy - Law and Practice · Voluntary Liquidation of Companies

Gomti Components Ltd owes debts. Its members passed the special resolution for voluntary liquidation on 5 August, and creditors representing two-thirds in value approved it on 9 August. From which date are the voluntary liquidation proceedings deemed to have commenced, and by when must the Registrar and the Board be notified?

Proceedings are deemed to commence on 5 August, the date of the members' resolution, and notification to the Registrar and the Board is due by 16 August. Commencement relates back to the resolution, while notice is due within seven days of the subsequent creditor approval.

  1. ACommenced on 9 August; notification by 16 August, being seven days of creditor approval
  2. BCommenced on 5 August; notification by 16 August, being seven days of creditor approvalCorrect
  3. CCommenced on 5 August; notification by 12 August, being seven days of the members' resolution
  4. DCommenced on 9 August; notification by 12 August, being seven days of the members' resolution

Explanation

Section 59(5) deems proceedings to commence from the date of the members' resolution (5 August), subject to creditor approval. Section 59(4) requires notice to the Registrar and the Board within seven days of the resolution or the subsequent creditor approval, as the case may be. Since creditor approval followed on 9 August, the deadline is 16 August. Counting from 5 August is wrong when approval was needed.

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