Members’ voluntary winding-up
We recently assisted one of our clients in the winding-up of two of their solvent companies as part of a restructuring process, and we thought that it would be worthwhile sharing our experience with the rest of our clients by identifying some of the key features involved in such a procedure.
The process in winding-up a company voluntarily, involves both the office of the Master of the High Court (“the Master“) as well as the Companies and Intellectual Property Commission (“the CIPC“). Before the procedure can commence with the CIPC, the company to be wound-up must set security with the Master for the payment of the company’s debts or if the company has no debts, to obtain the consent of the Master to dispense with the need of furnishing security. The Master will require the following documents before the consent to dispense with security can be given –
- a sworn statement by a director of the company authorised by the board, stating that the company has no debt; and
- an auditor’s certificate stating that, to the best of its knowledge and belief, the company appears to have no debt.
Once the consent of the Master has been obtained, the process is then initiated with the CIPC where the following documents will need to be furnished –
- CoR 40.1: Notice of Special Resolution to Wind-up a Solvent Company;
- written resolutions of the shareholders of the company authorising the winding-up of the company and the appointment of the liquidator;
- Master’s consent to dispense with security; and
- originally certified identity document of the authorising director.
The service turn-around time for the CIPC to change the status of the company to “in liquidation” can take anything between 2 to 4 weeks. Once the certificate of confirmation has been issued by the CIPC, the next step would be to approach the Master in order to appoint the liquidator. The Master will require the certificate of confirmation together with the following documents –
- proof of publication in the Government Gazette, of the notice to wind-up the company voluntarily and to appoint the liquidator; and
- affidavit of non-interest deposed by the liquidator.
Once the liquidator is appointed, the powers of the directors will cease to exist and the liquidator will generally be given a free hand to wind-up the affairs of the company.