BL – Nov 2012 – L1 – SB – Q6C – Company Law

State three reasons why a company may be wound-up voluntarily.

Question

There are different ways by which a company may be wound-up. State THREE reasons why a company may be wound-up voluntarily.

Answer

The company has reached the end of its specified period of existence as stated in its memorandum of association.
The company has achieved its objectives and no longer needs to operate.
The company is unable to pay its debts, and its shareholders decide to wind up the company voluntarily instead of facing insolvency proceedings.