Question
Explain five ways through which a public limited company may be dissolved.
Answer
- A resolution by the shareholders (to dissolve the company)/where there is a (unanimous) decision by the shareholders (to wind up the company) during an Annual General Meeting (A.G.M)
- Change in the country’s law that renders the activities of the company illegal/unlawful (when the laws of a country) which bars certain activities that the company may have been involved in.
- Due to inability to repay financial debts, creditors may go to court/insolvency if that debts are not paid.
- Amalgamation/mergers/if it combines with another and a new one replaces the ones combining which creates a new entity.
- Take overs/acquisitions/absorption/if taken over by another company/by the government/acquisition of majority of shares hence redirection of its activities/loss of identity/change of status - Realization of sustained/continuous losses to the extent of not being able to meet its recurrent expenditures.
- Court order/infringing a law/granted a complain raised by a shareholder.
- Completion/fulfillment of task/activity/objective (for which it was formed) hence making its continued existence unnecessary/unavailable.
- Failure to commence/start business within one year (of registration or incorporation) thus infringing the companies act.
- Change in the country’s law that renders the activities of the company illegal/unlawful (when the laws of a country) which bars certain activities that the company may have been involved in.
- Due to inability to repay financial debts, creditors may go to court/insolvency if that debts are not paid.
- Amalgamation/mergers/if it combines with another and a new one replaces the ones combining which creates a new entity.
- Take overs/acquisitions/absorption/if taken over by another company/by the government/acquisition of majority of shares hence redirection of its activities/loss of identity/change of status - Realization of sustained/continuous losses to the extent of not being able to meet its recurrent expenditures.
- Court order/infringing a law/granted a complain raised by a shareholder.
- Completion/fulfillment of task/activity/objective (for which it was formed) hence making its continued existence unnecessary/unavailable.
- Failure to commence/start business within one year (of registration or incorporation) thus infringing the companies act.
Related Topics