• Voluntary winding up is the winding up of a company by members or creditors without judicial intervention. It is recognized by sec 272 (1) of the Act.
• A voluntary winding up may be members or creditors.
• Under section 271 (1) of the Act, a company may be wound up voluntarily in the following circumstances.
1) Lapse of time:
If the duration if any prescribed by the articles has expired and members have resolved to have the company wound up voluntarily.
2) Occurrence of an event:
If an event contemplated by t he articles has occurred and members have resolved that the company be wound up voluntarily.
3) Special resolution:
If members by special resolution resolve that eh company be wound up voluntarily. Under section 273 of the Act, a voluntary winding up commences at eh time of passing the resolution for winding up. Under section 271 (2) of the Act, a resolution to winding up a company voluntarily is referred to as a resolution for voluntary winding up and within 14 days of its passage, notice must be given in the Kenya Gazette and in some newspaper circulating in Kenya.
Members Voluntary Winding Up
This is the winding up of a solvent company at the option of the members. It is managed by shareholders who appoint a liquidator answerable to them. No meetings of creditors are held and there is no committee of inspectors.
It is characterized by declaration of solvency. Pursuant to section 276 (1) of the Companies Act.
Conduct of a Members Voluntary Winding up;
Members in general meeting pass the resolution for voluntary winding up and must appoint one or more liquidators to wind up the affairs and distribute the assets of the company.
Under sec 281 (1) if at any time the liquidator is of the opinion that the company cannot pay its debts in full, within the stipulated duration he must;
1) Notify the registrar of companies
2) Convene a meeting of the creditors an lay before it a statement of the assets and liabilities of the company failing which the liquidator is liable to a fine not exceeding Sh.1,000.
• Under section 282 (1) of the Act, if winding up continues for more than 1 year, the liquidator must convene a general meeting of the members and must do so after every other year and lay before it an account of his acts and dealings and of the conduct of the winding up during the proceeding year.
• Under section 283 (1), when the affairs of the company are fully wound up, the liquidator must prepare a winding up account shown how it has been conducted and the property of the company disposed off.
• He must then, by a 30 day notice in the Kenya Gazette and in some newspaper circulating in Kenya, summon a general meeting of the members and lay before it account giving any explanations necessary.
• Within 14 days of the meeting, the liquidator must deliver a copy of the account to the registrar and on expiration of 3 months, from the date of registration, the company is deemed dissolved. However, the dissolution of a company may be deferred by the court on the application of the liquidator or other interested party.
• The court order must be delivered to the registrar within 7 days of its making. If the liquidator fails to convene the last general meeting of the company, he is liable to a fine not exceeding Ksh.1,000.