Describe the circumstance under which a company may be wound up on the ground that it is „just and equitable‟ to do so.
ANSWER
Under the Companies Act, “a company may be wound up the court, if the court is of the opinion that it is just and equitable, that the company should be wound up.” Companies have been wound up on this ground in the following circumstances:
• Fraudulent or illegal purpose : Inte Thomas Edward Brinsmead & Sons Ltd
• Failure of the substratum: , Inre German Date Coffee, Inre Baku Consolidated Oil Fields, Inre Amalgamated Syndicate.
• Loss of confidence in the management: Loch v John Blackwood
• Expulsion or exclusion from management: Inre Westbourne Galleries Ltd, Inre Lundie Brothers Ltd
• The company is „a bubble‟: Inre London and County Coal Ltd
• Oppression of Minority
• Deadlock in management and membership: Inre Yenidje Tobacco Ltd, Inre Modern Retreading Ltd