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

The directors of Kaveri Textiles Ltd, which has never defaulted on any debt, make a declaration verified by an affidavit that they have inquired into its affairs and that it can pay its debts in full from asset sale proceeds. Within what period of that declaration must the members pass the special resolution for voluntary liquidation and appoint an insolvency professional as liquidator?

The members must pass the special resolution within four weeks of the directors' declaration. The resolution requires voluntary liquidation and appoints an insolvency professional as liquidator. Seven days applies to creditor approval and notification, not to the members' resolution.

  1. AWithin four weeksCorrect
  2. BWithin seven days
  3. CWithin fourteen days
  4. DWithin ninety days

Explanation

Section 59(3)(c) requires the special resolution appointing the insolvency professional as liquidator within four weeks of the directors' declaration. Seven days is the period for notifying the Registrar and the Board, or for creditor approval, so it is not the period for the members' resolution.

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