Winding up petition on just and equitable grounds
| Author | Mark Watson-Gandy |
| Pages | 109-125 |
OBJECTIVE
A petition to wind up a company can be presented if you can show that it is just and equitable to wind up the company under section 122(1)(g) of the Insolvency Act 1986.
Circumstances in which it might be just and equitable to wind up the company include:
ƒ where the affairs of the company are deadlocked;
ƒ where the principal objects of the company can no longer be achieved;
ƒ where the petitioner is excluded or expelled from the management of the company where the company was formed on the basis of an agreement that the petitioner would participate in the management of the company
or other oppressive conduct to the shareholders in their capacity as members;
ƒ where there has been a proven lack of probity on the part of those running the company in the conduct of its affairs.
A petition may only be presented by the company, its directors, a creditor (including a contingent or prospective creditor), a contributory,
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PETITION
Form Comp 6 (contributory’s petition). The petition needs to be in the statutory form. It must contain:
ƒ the name of the court;
ƒ the full name and address of the petitioner;
ƒ the full name of the company;
ƒ if the company is incorporated in England and Wales:
– the company’s registered number;
ƒ if the company is incorporated outside the United Kingdom:
– the country in which it is incorporated;
– the company’s registered number in that country;
– its overseas registered company number under Part 34 of the Companies
Act 2006;
ƒ if the company is unincorporated in England and Wales:
– the company’s postal address;
ƒ the registered office of the company;
ƒ the date when the company was incorporated;
ƒ which Companies Act it was incorporated under;
ƒ the number of issued shares of the company and the manner in which the shares are divided up;
ƒ the aggregate nominal value of those shares;
ƒ the amount of capital paid up or credited as paid up;
ƒ the number of shares issued to the petitioner;
ƒ the nature of the business of the company (if known);
ƒ a statement that the company is an Article 1.2 undertaking;
ƒ a statement:
– of whether these proceedings will be main, territorial or secondary proceedings; and
– that the reasons for so stating are given in a witness statement;
ƒ the facts upon which demonstrate that the petitioner has locus to present the petition, e.g. that the petitioner holds shares in the company and that they either were originally allotted to him, or have been held by him, and
Regulations 2017.
registered in his name, for at least 6 months during the 18 months before the commencement of the winding up, or have devolved on him through the death of a former holder;
ƒ that there will be a surplus of assets or some form of tangible interest on winding up or that winding up will minimise some disadvantage he is suffering as a shareholder;
ƒ that the conduct of the respondents has caused the petitioner to lose all trust and confidence in the management of the respondents;
ƒ the grounds upon which a winding up order is sought;
ƒ particulars of the facts which the petitioner relies on to show that it is just and equitable that the company be wound up;
ƒ whether the petitioner consents to an order under section 127 of the
Insolvency Act 1986;
ƒ a statement that ‘in the circumstances, it is just and equitable that the company should be wound up’;
ƒ a statement that ‘the petitioner therefore applies for an order that the company may be wound up by the court under the Act or that such other order as may be made as the court thinks fit’;
ƒ the name and address of every person the petitioner intends to serve; ƒ the contact details of the petitioner’s solicitors. This must include:
– their address;
– their telephone number or electronic address;
ƒ a blank box in which the court inserts details of the venue for hearing the petition;
ƒ the nature of the document, i.e. that it is a petition;
ƒ that it is made under s 122 of the Insolvency Act 1986; ƒ the date of the document;
ƒ the name and address of the person delivering the document;
ƒ the capacity in which that person is acting;
ƒ authentication by the person delivering the document.
The respondent should be the company and, where the petition is presented against a private limited company, all the shareholders. Where a petition is presented against a public company, it is acceptable practice to make only the alleged wrongdoers respondents and defer joining other shareholders until later.
Whilst the company is a necessary respondent to the petition, it is wrong for the company’s money to be spent on disputes between shareholders, and the court
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will, in an appropriate case, grant an injunction to prevent the company spending money on the litigation or dispensing with the need for its being represented.
The petition needs to be presented at or posted to the Chambers of the Registrar of the Companies Court, Royal Courts of Justice, 7 Rolls Buildings, Fetter Lane London EC4A 1NL or at a Chancery District Registry or at a county court with insolvency jurisdiction for the area in which the company has its registered office.
The county court has jurisdiction to wind up a company where the company’s paid up or credited as paid up capital does not exceed £120,000 and the county court is in the district in which the company’s registered office is situated.
EVIDENCE
The petition does not need to be verified by a witness statement at the time when it is lodged. Directions as to evidence will be given at the first hearing. Evidence will be required at this stage, however, if no or a modified form of the section 127 order is sought.
COURT FEES
The court fee is £280,
SERVICE
A sealed copy of the petition should be served on each respondent and at the company’s registered office at least 14 days before the return date. Service is by delivery to a director, officer or employee or other person who acknowledges himself authorised to accept service on behalf of the company or, in the absence
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