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CS Executive · Company Law and Practice · Legal Status and Types of Registered Companies

On winding up of Kalyan Trust Limited, a section 8 company, assets remain after all debts and liabilities are paid. Under section 8(9), what may be done with the remaining assets?

Remaining assets of a wound-up section 8 company may be transferred to another section 8 company with similar objects, subject to Tribunal conditions, or sold with proceeds credited to the Insolvency and Bankruptcy Fund. They cannot be shared among members, since dividends are prohibited.

  1. ADistribute them among the members in proportion to holdings
  2. BTransfer them to another section 8 company with similar objects, or sell and credit proceeds to the Insolvency and Bankruptcy FundCorrect
  3. CTransfer them to the directors as remuneration arrears
  4. DVest them in the Registrar for general distribution

Explanation

Section 8(9) allows remaining assets to be transferred to another section 8 company with similar objects, subject to Tribunal conditions, or sold with the proceeds credited to the Insolvency and Bankruptcy Fund. Distribution to members would contradict the prohibition on dividends.

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