Discuss: Circumstances in which a company may be compulsorily wound by the court.

Section 218 of the Act confers upon the High court, jurisdiction to wind up companies registered in Kenya. Winding up by the court is by petition.

– The petitioner must establish his case for a winding up order to be granted.
– A winding up petition must be based on certain grounds and Section 219 of the Act sets out the circumstances in which a company may be wound up by the courts.

These are the grounds under compulsory winding up.

Under Section 219 of the Act, a company may be wound up by the Court if:

1. Members have by special resolution resolved that the company be wound up by the court.

2. Failure to hold the statutory meeting by the company pursuant to Section 130(1).

3. The company has failed to deliver the statutory report to the registrar for registration.

4. The company has failed to commence business within a year of incorporation.

5. The company has suspended its business for a whole year.

6. The number of members has fallen below the statutory minimum.

7. The company is unable to pay its debts i.e. insolvent.

8. The court is of the opinion that it is just and equitable that the company be wound up.

9. Winding up proceedings have been commenced outside Kenya in respect of a company incorporate outside Kenya but carrying on business in Kenya.

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