{"id":1115,"date":"2023-11-18T17:54:50","date_gmt":"2023-11-18T17:54:50","guid":{"rendered":"https:\/\/www.adeolaoyinlade.com\/?p=1115"},"modified":"2023-11-18T17:54:53","modified_gmt":"2023-11-18T17:54:53","slug":"procedure-for-winding-up-a-company-in-nigeria","status":"publish","type":"post","link":"https:\/\/www.adeolaoyinlade.com\/en\/procedure-for-winding-up-a-company-in-nigeria\/","title":{"rendered":"PROCEDURE FOR WINDING UP A COMPANY IN NIGERIA"},"content":{"rendered":"\n

Winding up of a company is the process by which the existence of a registered company comes to an end in accordance with statutory provisions. It is a process that allows members or shareholders of a company to appoint a liquidator to formally close down the company. Sections of the companies and Allied Matters Act, (CAMA) 2020 provide for winding up of a company. Under the Act, there are three modes of company winding up; by the court, voluntarily and subject to the supervision of the court. The Insolvency Regulation 2022 also govern the winding up of a company in Nigeria.<\/p>\n\n\n\n

    \n
  1. <\/strong>WINDING UP BY THE COURT<\/strong><\/li>\n<\/ol>\n\n\n\n

    This is known as compulsory winding up of a company by the order of court. Where an application is brought before the court by way of a petition by any person entitled to present a winding up petition (usually; the company, creditor, contributory, trustee or personal representative, official receiver, the Commission), the court may order that a company be wound-up. The Federal High Court has exclusive jurisdiction of matters arising from the operations of companies incorporated under the Act.<\/p>\n\n\n\n

    Grounds when the court may order that a company be wound-up:<\/p>\n\n\n\n

      \n
    1. The company has by special resolution resolved that the company be wound up by the court<\/li>\n\n\n\n
    2. Default is made in delivering the statutory report to the Corporate Affairs Commission (CAC) or in holding the statutory meeting<\/li>\n\n\n\n
    3. The number of members is reduced below two<\/li>\n\n\n\n
    4. The company is unable to pay its debts<\/li>\n\n\n\n
    5. The court is of the opinion that it is just and equitable that the company should be wound-up.<\/li>\n<\/ol>\n\n\n\n
        \n
      • <\/strong>VOLUNTARY WINDING UP<\/strong><\/li>\n<\/ul>\n\n\n\n

        This is the winding up of a company by itself through its shareholders or members. A company can voluntarily be wound up in two ways;<\/p>\n\n\n\n

          \n
        1. Members voluntary winding up<\/li>\n\n\n\n
        2. Creditors voluntary winding up<\/li>\n<\/ol>\n\n\n\n
            \n
          1. <\/strong>Members voluntary winding up<\/strong><\/li>\n<\/ol>\n\n\n\n

            This is where a company is solvent, that is, still has more assets than liabilities to meet up with its obligations like paying off its debts, and its members or shareholders decide to wind up the company so that it can be dissolved. This may be on the ground that the company has satisfied its objectives or if the company is for a fixed duration or on the happening of an event. The remaining funds from its assets will then be distributed to the members.<\/p>\n\n\n\n

              \n
            • <\/strong>Creditors voluntary winding up<\/strong><\/li>\n<\/ul>\n\n\n\n

              This is where the company is insolvent, that is, does not have assets enough to pay off its debts as at when due to its creditors. The directors and shareholders of the company on their own decide to voluntarily wind up the company to protect its creditors and minimize their loss. The creditors are involved in the process of the winding up. The directors are in control of the winding up and also appoint a liquidator who then makes statement reports and present to the creditors. The liquidator\u2019s duties are first to the creditors and not to the directors.<\/p>\n\n\n\n

                \n
              • <\/strong>WINDING UP SUBJECT TO SUPERVISION OF COURT<\/strong><\/li>\n<\/ul>\n\n\n\n

                This operates as a voluntary winding up following a special resolution by the company that the voluntary winding up be supervised by the court. On application to the court by way of petition the court may order that the voluntary winding up shall continue subject to the supervision of court. All procedures for voluntary winding up shall apply but with the supervision of the court and the court shall then be at liberty to appoint or remove liquidator on such terms as the court thinks just.<\/p>\n\n\n\n

                CONCLUSION<\/strong><\/p>\n\n\n\n

                The process of winding up a company has effects and consequences on the structure of the company. Once the process is started the company ceases to carry on business until it is finally dissolved. The company may be struck out of the register by the Commission if it becomes defunct under section 692 of CAMA 2020.<\/p>\n\n\n\n

                By Adeola Oyinlade & Co<\/em><\/strong><\/p>\n\n\n\n

                Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.<\/em><\/strong><\/p>\n\n\n\n

                Adeola Oyinlade & Co provides help and offer advisory to both local and foreign clients in winding up of a company in Nigeria.<\/em><\/strong><\/p>\n\n\n\n

                Need help? Kindly contact us using the details below:<\/em><\/strong><\/p>\n\n\n\n

                Email: info@adeolaoyinlade.com<\/em><\/strong><\/p>\n\n\n\n

                Mobile: +234 803 826 7683 \/ +234 802 686 0247<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

                Winding up of a company is the process by which the existence of a registered company comes to an end in accordance with statutory provisions. It is a process that allows members or shareholders of a company to appoint a liquidator to formally close down the company. Sections of the companies and Allied Matters Act, […]<\/p>\n","protected":false},"author":2,"featured_media":1119,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-1115","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"yoast_head":"\nPROCEDURE FOR WINDING UP A COMPANY IN NIGERIA - Adeola Oyinlade & Co<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.adeolaoyinlade.com\/en\/procedure-for-winding-up-a-company-in-nigeria\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PROCEDURE FOR WINDING UP A COMPANY IN NIGERIA - Adeola Oyinlade & Co\" \/>\n<meta property=\"og:description\" content=\"Winding up of a company is the process by which the existence of a registered company comes to an end in accordance with statutory provisions. 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