- 1 Marks
Question
Which of the following is NOT a ground for winding up of a company?
A. Fraudulent trading
B. Resolution by members to wind up
C. Reduction of membership below minimum number
D. Court Order
E. Possibility of abuse of limited liability system
Answer
E. Possibility of abuse of limited liability system
Explanation:
The possibility of abuse of limited liability is not a valid ground for winding up a company. Winding up usually occurs due to reasons such as insolvency, a court order, fraudulent activities, or reduction of membership below the statutory minimum.
- Tags: Grounds for Winding Up, Insolvency, Winding-up
- Level: Level 1
- Topic: Company Law
- Series: MAY 2014
- Uploader: Theophilus