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CS Professional · Corporate Restructuring, Valuation and Insolvency · Voluntary Liquidation

Meridian Textiles Ltd, a company with no default, has its directors make a declaration under section 59 of the IBC on 1 March. The company owes no debt to any person. By which date must the members pass the resolution for voluntary liquidation?

The members must pass the resolution within four weeks of the directors' declaration. For a declaration on 1 March, that is 29 March. The seven-day limit applies to creditor approval and to notifying the Registrar and the Board, not to the members' resolution.

  1. AWithin four weeks of the declaration, i.e. by 29 MarchCorrect
  2. BWithin seven days of the declaration, i.e. by 8 March
  3. CWithin fourteen days of the declaration, i.e. by 15 March
  4. DWithin thirty days of the declaration, i.e. by 31 March

Explanation

Section 59(3)(c) requires the members' resolution within four weeks of the declaration. Four weeks from 1 March is 29 March. The seven-day period relates to creditor approval and notification, not to the members' resolution.

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