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

The articles of Orion Hotels Ltd fix its duration at 25 years, which has expired. The company has no debts and its directors have given the declaration. Which resolution of members suffices under Section 59 to liquidate it voluntarily?

An ordinary resolution of members in general meeting, requiring liquidation and appointing an insolvency professional as liquidator, suffices. Section 59(3)(c)(ii) allows this where the period of duration fixed by the articles has expired. A special resolution is needed only in the general case.

  1. AAn ordinary resolution in general meeting requiring liquidation and appointing an insolvency professional as liquidatorCorrect
  2. BA special resolution in general meeting, since only that route is allowed
  3. CAn ordinary resolution, but only after approval of the Adjudicating Authority
  4. DA resolution of the board of directors appointing a liquidator

Explanation

Section 59(3)(c)(ii) permits a resolution (not a special resolution) of members in general meeting where the articles' fixed period of duration has expired, and it must also appoint an insolvency professional as liquidator. No Adjudicating Authority approval is needed at this stage, and a board resolution is not enough. The creditor proviso does not arise as there is no debt.

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