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CS Professional · Compliance Management, Audit and Due Diligence · Compliance Framework

Sundaram Textiles Ltd is being wound up voluntarily. Its accounts officer sends a business letter to a supplier on the company's letterhead showing the company's name, but the letter carries no reference to the winding up. Which statement best describes the position under Section 344?

The letter breaches Section 344. Where a company is being wound up, voluntarily or by the Tribunal, every invoice, order for goods or business letter bearing its name, issued by or on behalf of the company, must state that the company is being wound up.

  1. ANo breach, because the statement is required only on invoices and not on business letters
  2. BNo breach, because the requirement applies only where the winding up is by the Tribunal
  3. CBreach, because every business letter bearing the company's name must state that the company is being wound up, whether winding up is voluntary or by the TribunalCorrect
  4. DBreach, but only if the letter is issued by the Company Liquidator personally

Explanation

Section 344(1) applies where a company is being wound up, whether by the Tribunal or voluntarily. It covers every invoice, order for goods or business letter bearing the company's name, issued by or on behalf of the company. The letter therefore breaches the section. Limiting it to Tribunal winding up or to the liquidator is wrong.

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